New Frontiers

Modern Times Group MTG ABNasdaq OMX Stockholm : MTGA, MTGB 1

2010 Capital Markets Day

Irina Gofman, CEO MTG Russia & CIS

Ulrik Bengtsson, CEO Pay-TV Emerging Markets

New Frontiers


Non-stop Development

Year 2003

Countries 7Channels 2DTH platforms

2004 2005 2006 2007 2008 2009 2010

11 15 22 23 24 25 253 5 6 7 8 10 12Baltic Ukraine Russia


Strong Financial Performance

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

-100

100

300

500

700

900

1100

Y 04 Y 05 Y 06 Y 07 Y 08 Y 09

mln

SE

K

Total Pay TV Revenue, EBIT and margin

Revenue EBIT EBIT Margin

• All times high sales in

2009, close to 900 million

SEK

• Growing EBIT margins at

20%

• Hard prove for the

successful business

model based on

incremental growth and

scale

Source: MTG company data


Our markets are still far from saturation

Source: Screen Digest, RTL, MTG company data

• Roomy growth potential across most of the markets

Digital TV HH as % of total TV HHPay TV Penetration vs Pay TV HH

• Low Digital TV penetration gives another dimension for multi-channel Pay TV

development

17%

54%

29%

59%68%

32%

46%42%

29%23%

46%

25%

4%0

2,000

4,000

6,000

8,000

10,000

Russia

Pola

nd

Ukra

ine

Rom

ania

Hu

ngary

Cze

ch

Bulg

aria

Slo

vakia

Serb

ia

Cro

atia

Slo

venia

Macedonia

B&

H

Pay TV HH % Pay TV penetration

0%

20%

40%

60%

80%

100%

UK

Fra

nce

Ge

rma

ny

Ro

ma

nia

Bu

lga

ria

Po

lan

d

Hu

ng

ary

Ukra

ine

Ru

ssi

a

Terres tria l S atellite C able IP TV


Pay TV in East is structurally different from West

• Build volume first and fast

• Adjust business models from Scandi experience

• Pre-paid business model for DTH businesses

• MiniPay as a stand alone business in some CEE countries

Structure

Platforms

Packages

Pricing

• Larger Geographical Footprint, multi-channel free viewing environment

• Growth in Pay TV & Digital-TV Penetration

• Small variety of packaging

• Free viewing packages

• High price sensitivity • Sometimes price in the

hardware vs content

• Smaller Geographical Footprint, multi-channel pay viewing environment

• Stable Pay TV & Digital-TV Penetration

• Premium-, basic-, larger & smaller packages

• ARPU stable with high base consumer spending on Pay TV

Eastern Europe Western Europe


Pay TV East – Rules of Engagement

Geographical Expansion

Localization

Revenue Maximization

Diversifyingrevenue streams

• Expanding Existing Viasat Brands into the new territories

• Creating localized content brands: TV1000 East, Russian Kino

• Bundling and packaging to maximize revenues and promote Viasat Brand to end customers

• Serving B2B and B2C segments (DTH) and introducing advertising in the selected markets

Channel Business is the

MTG Trojan Horse to the DTH


Channel Business in Eastern Europe


Pay TV Channel Business at a Glance

• ~ 44 million subscriptions sold in 2009, but higher potential is still ahead

Revenue, EBITChannels Subscriptions (mln)

and ARPU

• Revenues at all time high in 2009 • Channel business is the major EBIT driver

for Pay TV East so far

0

20

40

60

80

100

120

140

04 05 06 07 08 09

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

Subs (m illions ) ARPU (SEK)

Ad

dre

ssab

le m

ark

et

-100,000

0

100,000

200,000

300,000

400,000

500,000

Y 04 Y 05 Y 06 Y 07 Y 08 Y 09

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

Revenue (TSEK) EBIT (TSEK) EBIT magin (%)Source: MTG company data


Presence across all major Eastern European Countries

• Poland is the ARPU leader, but the majority of the revenues are still coming from Russia

Subscriptions Revenue

• Russia, Romania and Bulgaria are the highest volume drivers

7%

5%

4%

9%

6%

5%

3%3%

1%5%

52%

RussiaPolandBulgariaSerbiaRomaniaUkraineHungaryCzech RepSlovakiaSloveniaOther

13%

6%

6%

5%

5%

4%

3%3%

2%6%

47%

RussiaPolandBulgariaSerbiaRomaniaUkraineHungaryCzech RepSlovakiaSloveniaOther

Attractive incremental margins due to the multi territory footprint

Source: MTG company data


Russian Example: Consolidation and New Platforms Growth

0

10

20

30

40

2002 2003 2004 2005 2006 2007 2008 2009 2010

DTH

Cable

Pay

cable

IPTV

• Cable has still the highest penetration

• First consolidation stage is over, now focus is on the network modernization

• Satellite TV entered the boom phase through mostly free viewing (Tricolor TV)

Mobile Dig Dispay Fix line Broadband Pay TV

% HH Penetration Russian Consumer Spend (USD billion)

Wild East Boom New Reality

• Pay-TV was the fastest growing segment in 2009 despite the telecom market stagnation

• Mkt growth will be driven by penetration and operators’ ARPU increase

Source: IKS Consulting 2009, Json&Partners, April 2010, MTG company data


Russian Example: MTG on Top

• TV1000 East and TV1000 Russian Kino are the most watched Pay TV movie channels in Russia according to TNS Gallup

• Viasat is the leading Channel Group in Russia in penetration and revenues

• High EBIT margin

• Russian Pay TV revenue CAGR 2004-09 was 31% (US$)

• Viasat Pay TV Revenue CAGR 2004-09 was 76% (US$)

Top

ChannelsGroup

Top

Channels

Out-

performing Russian Pay TV

Market

Sept. Sept.

20082008

May May

20042004

Oct. Oct.

20052005

Nov. Nov.

20032003

March March

20032003

Nov. Nov.

20062006

Summer Summer

20102010


DTH Business in Eastern Europe


STAR High market share in fast-growing marketSTAR High market share in fast-growing market

CASH COW High market share in mature marketCASH COW High market share in mature market

QUESTION Low market share in fast-growing marketMARK

QUESTION Low market share in fast-growing marketMARK

DOG Low market share In mature marketDOG Low market share In mature market

High Relative market share Low

Lo

wM

ark

et

gro

wth

rate

H

igh

DTH Scandi

1997DTH Scandi

1992

Model shows MTG’s DTH development from 1992 untill today. Dotted arrows indicate direction of MTG’s development in the coming years.

DTH Ukraine

2008

DTH Baltic

2004

DTH Baltic

2008

DTH Russia

2010

DTH Scandi

2008

Virtual IP

2010

DTH IntroductionDTH has been very profitable for us in Scandinavia and given us leverage to move into the virtual operator business. We anticipate the same journey in our Emerging Markets


0

50

100

150

200

250

300

350

Y 04 Y 05 Y 06 Y 07 Y 08 Y 09 Y 10

Su

bscrib

ers

(000')

Subscribers

Premium DTH subscribers Basic DTH subscribers

2010 subscribers are Q1 values

-13500

-3500

6500

16500

26500

36500

46500

-150000

-50000

50000

150000

250000

350000

450000

550000

Y 04 Y 05 Y 06 Y 07 Y 08 Y 09

EB

IT

Reve

nu

e

Revenue and EBIT (000' SEK)

Revenue EBIT

DTH at a glanceSteady subscriber growth accelerated on back of Raduga acquisition. EBIT growth despite investments in Ukraine.


77%

48%

4%

12%

12%

19%

7%18%

0%

20%

40%

60%

80%

100%

Q1 09 Q2 09 Q3 09 Q4 09 Q1 10

Market share total Baltic development in non cabled universe

Analogue Terrestrial DTT IPTV Viasat

DTH BalticViasat has gained significant market share in the last year. We are the largest pay TV platform in both Lithuania and Latvia. In Estonia we are part of the IPTV growth due to our

Elion agreement.

0%

20%

40%

60%

80%

100%

Est Lat Lit

Average market share in non-cable universe

Viasat

IPTV

DTT (pay)

DTT (free)

Terrestrial (analogue)


Baltic Gold package around 45 channels

Monthly fee: 305 EEK (24 USD)

Entrance fee: 505 EEK (40 USD)

DTH Baltic - positioningDuring the last 2-3 years Viasat has developed into a true premium player with the launch of Viasat Sport Baltic, Viasat Golf, Viasat Hockey, TV1000 premium and TV1000 action.

� Price leadership – higher TV ARPU than any competitor

� Content leadership – controlling the regions only premium sport

and movie channels

� 13 own produced channels

� Premium position with HD and PVR products in the markets

� Full box subsidy.


0

50,000

100,000

150,000

200,000

250,000

2005 2006 2007 2008 2009 2010

Total Subscriber Base

1000

1500

2000

2500

3000

3500

Y 06 Y 07 Y 08 Y 09

Total ARPU (EEK)

DTH Baltic – subscriber baseAfter continuous growth since 2004 we faced a decline in the recession 2009, primarily due

to bad payments. However, the situation has now stabilized and we are back to growth


� Viasat have acquired a significant share of Ukraine’s Pay TV market and are already larger than NTV+ that have been on the market for 10 years

� Also Viasat brand awareness are already exceeding that of NTV+

94%

95%

96%

97%

98%

99%

100%

Q2'2009 Q3'2009 Q4'2009 Q1'2010

Market shares in DTH segment (non terrestrial or cable)

Free satellite TV NTV + other

Tricolor Poverhnost' TV Viasat

42%4%8%2%

45%

Average market share Pay DTH

NTV + other

Tricolor Poverhnost' TV

Viasat

DTH Ukraine – market development and markets shares DTH market has historically consisted of 2 million FTA satellite installations. However, this base

is declining and are providing one of the best sources of growth for Viasat.

Source GFK and internal analysis

0.0%

1.0%

2.0%

3.0%

4.0%

0%

20%

40%

60%

80%

Viasat NTV+ Poverhnost' TV

Awareness and intention to connect

AidedSpontaneous


Ukraine Prestige Package around 70 channels

Monthly fee: 168 UAH (21 USD)

Entrance fee: 599 UAH (75 USD)

� Positioned with low entry barrier for customer but relatively high

monthly fee

� Only supplier in the market offering customer service

� Partial box subsidy model


� First premium sport channel launched in September in

cooperation with TRK Ukraine

� DTH exclusive movie and sport content

� MPEG 4 gives us beneficial cost structure

� Still not full fledged Premium position

DTH Ukraine – positioning Strong offering but market still not ready for full fledged premium positioning.


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

J 08 M 08 M 08 J 08 S 08 N 08 J 09 M 09 M 09 J 09 S 09 N 09 J 10 M 10


DTH Ukraine – subscriber base Our customer base have grown steadily even throughout the Ukrainian crisis.

800

900

1,000

1,100

1,200

1,300

1,400

Y 09 Y 10

Total ARPU (UAH)


Total HH 54 mln Mostly Cable Mostly Non cable

City HH 37 mln

Cities High Rise Apt Blocks

24 mln

Cities Low Rise apt blocks

13 mln

Small settlements 17 mln

Recreational (dachas), second homes

10 mln

Addressable 24 mln 40 mln

Current Pay TV 12 mln 5 mln

To capture * 8-10 mln 10 mln

*Adjusted to disposable income, adoption rate, ARPU increase of the current networks and

current competition in DTH

DTH Russia – market potential Russia represents a large untapped DTH market which should be growing when disposable incomes increase.


Raduga TV Package around 55 channels

Monthly fee: 300 RUB (9,7 USD)

Entrance fee: 5900 RUB (190 USD)

� Prepaid model

� Card sales model with no proprietary boxes

� No box subsidy

� Positioned with high entry barrier for customer

but low monthly fee

� Positioned right in-between high end NTV+ and

extremely low end Tricolor


DTH Russia – positioning Raduga is positioned neatly right in-between the existing two big players. This caters to a lower ARPU segment than NTV+ and our Ukrainian platform, but also a higher volume segment


0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

feb 2009

mar 2009

apr 2009

may 2009

jun 2009

jul 2009

aug 2009

sep 2009

oct 2009

nov 2009

dec 2009

jan 2010

feb 2010

mar 2010

apr 2010


DTH Russia – Subscriber base This positioning is providing a significant growth potential and since feb. 2009 base has grown to over 85 000 subscribers


Description Relevance

Structurally lower

content cost

� Given the economy of scale in our own channels our platforms can access this content at a very low price, this is particularly true for the expensive premium content

1

Cross promotion

� Lower marketing costs due to cross promotion access at our FTA and pay TV channels. Highest relevance where we have FTA channels

2

Market knowledge

� We have good understanding of the market we enter with DTH because we have had local presence for years.

3

Market Leverage

� The more channels we have in a market the more leverage we create which is a value that can be used to strengthen the platform either by giving it exclusive content or by entering virtual operator agreements

4

Very relevant

Not relevant

Synergies between our minipay and DTH businesses There are proven synergies between our channel minipay business and our DTH platforms, our Scandinavian experiences has given us the blueprint on how to use them


Summary

Mini pay

Next

� Russia still represent our single greatest growth potential

� Growth will come primarily through volume growth

� Main driver in volume growth will be through selective new channel launches

� Ensure success in our Russian and Ukrainian DTH business

� Look for selective opportunities to extend current DTH businesses into new territories

� We are currently evaluating the opportunity for both mini pay and DTH in Africa

DTH

� Baltic countries are still expected to provide growth for Viasat

� We have two additional new platforms both of which represents a great future potential

� A multi-platform strategy focused on 3rd party networks (large digitised cable and IPTV operations) still represents a more or less untapped market for Viasat in our Emerging Markets.


2010 Capital Markets Day

Irina Gofman, CEO MTG Russia & CIS

Ulrik Bengtsson, CEO Pay-TV Emerging Markets

New Frontiers

New Frontiers

Education

pay tv stable

tv hhdigital tv hh

tv penetrationsource

satellite tv

tv channel business

tv penetration vs

total tv hh10

oflow digital tv penetration