Liberty Global, Inc. provides broadband communication services, video, voice and broadband Internet access services, with operations in approximately 16 countries. The company operates primarily in Europe, Japan and Chile. The company, through its indirect wholly owned subsidiaries UPC Holding BV (UPC Holding) and Liberty Global Switzerland, Inc. (LG Switzerland), provides broadband communications services in 10 European countries (excluding Belgium).
LG Switzerland holds the company’s 100% ownership interest in Cablecom Holdings AG (Cablecom), a broadband communications operator in Switzerland. The broadband communications operations of UPC Holding and LG Switzerland are collectively known as the UPC Broadband Division. The company, through its indirect controlling ownership interest in Jupiter Telecommunications Co., Ltd. (J:COM), provides broadband communications services in Japan. The company, through its indirect 80% owned subsidiary VTR Global Com, S.A. (VTR), provides broadband communications services in Chile.
The company also has combined direct-to-home satellite operations in Australia; combined broadband communications operations in Puerto Rico, Brazil and Peru; non-controlling interests in broadband communications companies in Europe and Japan; combined interests in certain programming businesses in Europe and Argentina; and non-controlling interests in certain programming businesses in Europe, Japan, Australia and the Americas.
The company’s combined programming interests in Europe are primarily held through its indirect wholly owned subsidiary Chellomedia BV (Chellomedia), which also provides interactive digital services and owns or manages investments in various businesses in Europe. Certain of Chellomedia’s subsidiaries and affiliates provide programming and other services to its UPC Broadband Division and some of its other broadband operations.
Services
Broadband Distribution
The company offers various broadband distribution services over its cable television systems, including video, broadband Internet access and telephony. In select markets, it also offers video services through direct-to-home satellite (DTH), or through multi-point microwave distribution systems (MMDS). In select markets, the company also offers mobile telephony services using third party networks. The company’s analog video service offerings include basic programming and expanded basic programming in some markets. The company’s digital video service offerings include basic programming, premium services and pay-per-view programming, including near-video-on-demand, or NVoD, and video-on-demand, or VoD, in some markets. It offers broadband Internet access services in its markets. The company’s residential subscribers can access the Internet through cable modems connected to their personal computers.
The company offers telephony services in Austria, Chile, Czech Republic, Hungary, Ireland, Japan, The Netherlands, Poland, Puerto Rico, Romania, Slovak Republic, and Switzerland, primarily over its broadband networks. In Austria, Chile, Hungary, Ireland, Japan and The Netherlands, the company provides circuit switched telephony services and voice-over-Internet-protocol, or VoIP telephony services. Telephony services in the remaining countries are provided using VoIP technology. In select markets, the company also offers mobile telephony services using third party networks.
The company operates its broadband distribution businesses in Europe primary through the UPC Broadband Division of Liberty Global Europe, Inc. (LG Europe); in Japan primary through J:COM, a subsidiary of LGI/Sumisho Super Media LLC (Super Media); in The Americas primary through VTR and Liberty Cablevision of Puerto Rico, Ltd. (Liberty Puerto Rico); and in Australia primary through Austar. Each of LG Europe, Super Media, VTR, Liberty Puerto Rico and Austar is a consolidated subsidiary.
Programming Services
The company owns programming networks that provide video programming channels to multi-channel distribution systems owned by it and by third parties. The company also represents programming networks owned by others. The company’s programming networks distributes their services through various distribution technologies, primary cable television and DTH.
The company operates its programming businesses in Europe primary through its subsidiary Chellomedia; in Japan primary through its affiliate Jupiter TV Co., Ltd. (Jupiter TV); in the Americas primary through its subsidiary Pramer S.C.A. and a joint venture interest in MGM Networks Latin America, LLC; and in Australia primary through its joint venture interest in XYZ Networks Pty, Ltd. (XYZ Networks).
Operations
Europe — LG Europe
The company’s European operations are conducted through its wholly owned subsidiary, LG Europe, which provides services in 10 countries in Europe (excluding Belgium). LG Europe’s operations are organized into two primary divisions: UPC Broadband and Chellomedia. Through its UPC Broadband Division, LG Europe provides video, broadband Internet access, telephony and mobile services over its networks and operates the cable network in each of Austria, Czech Republic, Hungary, Ireland, Poland, Romania, Slovak Republic, Slovenia and Switzerland. LG Europe’s broadband Internet access service is provided over the UPC Broadband Division network infrastructure generally under the brand name chello.
The Netherlands
The subscribers in UPC Broadband Division’s operations in The Netherlands (UPC Netherlands) are located in six regional clusters, including the major cities of Amsterdam and Rotterdam. For its analog customers, UPC Netherlands offers 25 to 40 video channels, depending on a customer’s location, and 39 radio channels.
In October 2005, UPC Netherlands initiated a program to migrate over time its analog video cable customers to digital video service, (digital-for-all or D4A program). In the D4A program, UPC Netherlands provides the customer with a digital interactive television box and, for a promotional period following acceptance of the box, the digital entry level service.
The digital entry level service includes approximately 40 video channels and approximately 70 radio channels, an electronic program guide, interactive services and the functionality for NVoD service. Digital video customers may also subscribe to premium channels, such as Film 1 and Sport 1 NL, alone or in combination, for additional monthly charges.
UPC Netherlands offers six tiers of chello branded broadband Internet access service with download speeds ranging from 384 Kbps to 20 Mbps. UPC Netherlands offers a self-install option for its digital cable services and its broadband Internet access services, allowing subscribers to install the technology themselves.
UPC Netherlands offers mobile service to consumers in The Netherlands. The product is a pre-paid mobile offering. UPC Netherlands is operating as a mobile virtual network operator reselling leased network capacity. In addition, through Priority Telecom BV (Priority Telecom), UPC Netherlands offers a range of voice, broadband Internet access, private data networks and customized network services to business customers primarily in its core metropolitan networks.
Switzerland
UPC Broadband Division’s operations in Switzerland are operated by Cablecom. Cablecom provides video cable service to Swiss cable television households. Cablecom offers its digital cable subscribers a digital entry package consisting of 50 video channels and 30 radio channels and a range of additional pay television programming in various foreign language program packages. The third television product is NVoD services, which is available to all of Cablecom’s digital cable customers. Cablecom’s digital cable service is sold directly to the end user as an add-on to its analog cable services.
Cablecom offers nine tiers of broadband Internet access service with download speeds ranging from 300 Kbps to six Mbps. In January 2007, Cablecom launched a broadband Internet access product with a download speed of 10 Mbps. In addition, Cablecom offers dial-up Internet services on a limited basis.
Telephony services are available from Cablecom to 70% of its homes passed. Cablecom offers a flat rate telephone plan in Switzerland, known as Unlimited24. In addition, Cablecom offers digital telephony services through VoIP.
Cablecom offers data services to the Swiss business market. Cablecom provides broadband Internet access, multi-site data connectivity, virtual private network, security, messaging and hosting and other value added services to business customers on a retail basis.
Cablecom provides full or partial analog television signal delivery services, network maintenance services and engineering and construction services to its partner networks. Cablecom also offers digital television, broadband Internet and fixed line telephony service directly to the analog cable subscribers of those partner networks that enter into service operating contracts with Cablecom. Cablecom has the direct customer billing relations with the subscribers who take these services on the partner networks. Cablecom offers television, Internet, fixed line telephony and mobile telephony — also known as quadruple-play.
Austria
In March 2006, the company’s subsidiary, UPC Austria GmbH, acquired all the outstanding shares of INODE Telekommunikationsdienstleistungs GmbH (INODE).
UPC Broadband Division’s operations in Austria (excluding the Austrian portion of Cablecom’s network), (UPC Austria), are located in regional clusters encompassing the capital city of Vienna, two other regional capitals and two smaller cities. Each of the cities in which UPC Austria operates owns, directly or indirectly, 5% of the local operating company of UPC Austria. UPC Austria’s cable network is almost entirely upgraded to two-way capability and 97% of its cable homes passed is served by a network with a bandwidth of approximately 860 MHz.
UPC Austria provides a single offering to its analog cable subscribers that consists of 38 channels, primary in the German language. UPC Austria’s digital platform offers approximately 100 basic and premium television channels, plus NVoD, interactive services, television-based e-mail and an electronic program guide. UPC Austria’s premium content includes first run movies and specific ethnic offerings, including Serb and Turkish channels.
UPC Austria offers five tiers of chello branded broadband Internet access service with download speeds ranging from 600 Kbps to 16 Mbps and a student package. UPC Austria’s broadband Internet access is available in all of the cities in its operating area.
UPC Austria offers basic dial tone service, as well as value-added services. UPC Austria also offers a bundle of fixed line and mobile telephony in a co-branding arrangement with the telephony operator One GmbH. In March 2006, UPC Austria began offering its telephony services through VoIP.
UPC Austria, through INODE and Priority Telecom, offers a range of voice, data, lease line and asymmetric digital subscriber lines, or ADSL, services to business customers throughout Austria with a primary focus on cities, including Vienna, Graz, Klagenfurt, Villach, St. Polten, Dombirn, Leibnitz, Leoben, Salzburg, Linz and Insbruck.
Ireland
UPC Broadband Division’s operations in Ireland, (UPC Ireland), include the networks of NTL Communications (Ireland) Limited, NTL Irish Networks Limited and certain related assets (collectively, NTL Ireland) and the networks of Chorus Communications, Ltd (Chorus). UPC Ireland operations are located in five regional clusters, including the cities of Dublin and Cork. UPC Ireland’s cable network is 36% upgraded to two-way capability, and 36% of its cable homes passed are served by a network with a bandwidth of approximately 550 MHz. UPC Ireland makes digital services available to its MMDS customers. The UPC Ireland MMDS customers on the NTL Ireland networks receive digital service and the UPC Ireland MMDS customers on the Chorus networks can receive either analog or digital services.
UPC Ireland offers an analog cable package with approximately 24 channels and a digital cable package with approximately 140 channels. For the MMDS customers on the NTL Ireland networks, UPC Ireland offers a basic package of 19 digital channels. For the MMDS customers on the Chorus networks, UPC Ireland offers an analog cable package of approximately 19 channels and a digital cable package of approximately 66 channels. The program offerings for each type of service include domestic, foreign, sport and premium movie channels. In addition, digital customers can receive event channels, such as seasonal sport and real life entertainment events. UPC Ireland also distributes up to seven Irish channels. To complement its digital offering, UPC Ireland also offers its digital subscribers 16 channels of premium service.
UPC Ireland offers four tiers of chello branded broadband Internet access service with download speeds ranging from one Mbps to six Mbps. UPC Ireland offers VoIP multi-feature telephony services. It offers basic dial tone service as well as value-added services.
Hungary
The cable networks of UPC Broadband Division’s operations in Hungary (UPC Hungary), are 93% upgraded to two-way capability, and 61% of its cable homes passed are served by a network with a bandwidth of approximately 750 MHz. UPC Hungary offers approximately three tiers of analog cable programming services (between six and 54 channels) and three premium channels. Programming consists of the national Hungarian terrestrial broadcast channels and selected European satellite and local programming that consist of proprietary and third party channels.
UPC Hungary offers four tiers of chello branded broadband Internet access service with download speeds ranging from 512 Kbps to 6 Mbps. UPC Hungary provides these broadband Internet services to 193,300 subscribers in 22 cities, including Budapest. It also had 15,700 ADSL subscribers as of December 31, 2006, on its twisted copper pair network located in the southeast part of Pest County.
UPC Hungary offers traditional circuit switched telephony services over a twisted copper pair network in the southeast part of Pest County. UPC Hungary offers VoIP telephony services over its cable network in Budapest.
Other Central and Eastern Europe
UPC Broadband Division also operates networks in Czech Republic (UPC Czech), Poland (UPC Poland), Romania (UPC Romania), Slovak Republic (UPC Slovakia), and Slovenia (UPC Slovenia).
Czech Republic: UPC Czech’s operations include Karneval and are located in approximately 100 cities and towns in the Czech Republic, including Pilsen, Prague, Brno, Ostrava and Northern Bohemia. UPC Czech offers two tiers of analog cable programming services with approximately 40 channels, and two premium channels in the network operated by Karneval and four premium channels in the rest of the UPC Czech network.
Karneval also offers its subscribers digital programming services with 41 channels consisting of three core services and nine tiers, including six premium services. UPC Czech (excluding Karneval) offers seven tiers of chello branded broadband Internet access service with download speeds ranging from 512 Kbps to 12 Mbps, and Karneval offers five tiers of broadband Internet access with download speeds ranging from one Mbps to seven Mbps. In September 2006, Karneval also launched VoIP multi-feature telephony services.
Poland: UPC Poland’s operations are located in regional clusters encompassing eight of the 10 major cities in Poland, including Warsaw and Katowice. UPC Poland offers analog cable subscribers three packages of cable television service. It includes four to 12 channels and the intermediate package includes 12 to 29 channels. For the higher tier, the full package includes the broadcast package, plus up to 63 additional channels with such themes as sports, children, science/educational, news, film and music. UPC Poland offers two premium television services, the HBO Poland package and Canal+ Multiplex, and a Polish-language premium package of three movie, sport and general entertainment channels. UPC Poland offers five tiers of chello branded broadband Internet access service in portions of its network with download speeds ranging from 512 Kbps to 12 Mbps. UPC Poland makes VoIP multi-feature telephony services. UPC Poland offers basic dial tone service as well as value-added services.
Romania: UPC Romania’s operations are located in nine of the 12 major cities in Romania, including Bucharest, Timisoara, Cluj and Conotanta. UPC Romania offers analog cable service with 32 to 44 channels in all of its cities, which include Romanian terrestrial broadcast channels, European satellite programming and regional local programming. In the main cities, it also offers four extra basic packages of five to 12 channels each and Premium Pay TV (HBO Romania, Telesport and Adult). UPC Romania offers three tiers of broadband Internet access service branded UPC and Astral Online, with download speeds ranging from 512 Kbps to 1.5 Mbps. UPC Romania offers basic dial tone service as well as value-added services. In addition, UPC Romania, through Astral Telecom SA, offers a range of voice, leased line and broadband data products to its business customers and its small office at home, or SOHO, customers.
Slovak Republic: UPC Slovakia offers analog cable service in 30 cities and towns in the Slovak Republic, including the four cities of Bratislava, Kosice, Banska Bystrica and Zilina. UPC Slovakia offers two tiers of analog cable service and three premium services. UPC Slovakia’s major tier, the basic package, includes 12 to 42 channels that generally offer all Slovak Republic terrestrial, cable and local channels, selected European satellite programming and other third-party programming. For an additional monthly charge, UPC Slovakia offers three premium services — HBO Slovakia package, the channel Private Gold and the UPC Komfort package consisting of six thematic third-party channels. In Bratislava, UPC Slovakia offers five tiers of chello branded broadband Internet access service with download speeds ranging from one Mbps to 10 Mbps.
Slovenia: UPC Slovenia systems mainly serve Ljubljana, the capital city. UPC Slovenia’s major tier, the analog basic package, includes on average 60 video and 30 radio channels and generally offers all Slovenian terrestrial, cable and local channels, selected European satellite programming and other third-party programming. UPC Slovenia offers one premium movie service. UPC Slovenia offers six tiers of broadband Internet access service with download speeds ranging from 128 Kbps to 24 Mbps.
UPC Direct: The company’s DTH satellite business, known as UPC Direct, provides DTH services to customers in UPC Czech, UPC Hungary and UPC Slovakia. UPC Direct provides DTH services to UPC Czech’s video subscribers, UPC Hungary’s video subscribers and UPC Slovakia’s video subscribers. Through another subsidiary, UPC Broadband Division also provides DTH services to UPC Romania’s video subscribers.
Chellomedia and Other
LG Europe’s Chellomedia Division provides interactive digital products and services, produces and markets thematic channels, operates a digital media center and manages the company’s investments in various businesses in Europe.
Interactive Services: Chellomedia’s Interactive Services group develops and delivers Internet and interactive television based entertainment and related technology services. On the Internet, this group publishes web portals for UPC Broadband Division and other broadband subscribers in UPC Broadband Division’s territories. This involves aggregating content, including video entertainment, and commercializing these services through advertising and on subscriptions or transactions. Interactive television services are also integrated with UPC Broadband Division’s digital television products and include the provision and commercialization of entertainment oriented applications and other services to programmers, advertisers and other parties. Activities in interactive television include the aggregation and publishing of interactive entertainment services on UPC Broadband Division’s digital television products, the delivery of interactive advertising capabilities and the provision of software applications, such as electronic program guides.
Programming: Chellomedia’s programming operations include:
Chellomedia On Demand (Transactional Television): Chellomedia On Demand aggregates NVoD entertainment content into transactional television offers for UPC Broadband Division and other distributors throughout Europe. The main product category for NVoD services is feature movies. As of February 28, 2007, NVoD services are offered through UPC Broadband Division in The Netherlands, Austria and Switzerland and through non-affiliates in Norway.
Global Thematics: Chellomedia produces and markets various distributed multi-territory thematic channels. These channels target the following genres: extreme sports and lifestyles (Extreme), horror films (Horror), real life stories (RealityTV), women’s information and entertainment (Club and Romantica), art house basic movies (Europa Europa), science fiction and fantasy (Fantasy), and prime time movies (Thriller). In addition, Chellomedia has a channel representation business, which represents both wholly owned and third party channels across Europe.
Chellomedia Benelux: Chellomedia owns and manages a premium sports channel (Sport 1 NL) and a premium movie channel (Film 1) in The Netherlands. Sport 1 NL has pay television rights for various sports, and it is primarily football oriented. For Film 1, Chellomedia has pay television output deals with key Hollywood studios.
The channels originate from Chellomedia’s digital media center, or DMC, located in Amsterdam. The DMC is a production facility that services UPC Broadband Division and third-party clients with channel origination, post-production and satellite and fiber transmission. The DMC delivers customized programming by integrating different video elements, languages (either in dubbed or sub-titled form) and special effects and then transmits the final product to various customers in various countries through affiliated and unaffiliated cable systems and DTH platforms.
Chellomedia Iberia: Through its subsidiaries IPS C.V. and Multicanal S.L. (collectively IPS), Chellomedia owns and manages a suite of seven thematic channels carried on major pay television platforms in Spain and Portugal. IPS has five wholly owned thematic channels (Canal Hollywood, Odisea, Sol Musica, Canal Panda and Canal Cocina) and two joint venture channels with A&E Television Networks (Canal de Historia and The Biography Channel).
Chellomedia Central & Eastern Europe: Chellomedia has a controlling 80% interest in a joint venture with an unrelated third party that owns and manages a sports channel (Sport 1 CEE). Sport 1 CEE is distributed through UPC Direct to UPC Broadband Division’s operations in Hungary, Czech Republic, Slovak Republic and Romania and to other broadband operators. In addition, Chellomedia owns and operates Sport 2, a multiplex channel, which is distributed in Hungary.
Investments: Chellomedia is an investor in equity ventures for the development of country-specific Pan European programming, including The MGM Channel Central Europe, Xtra Music, Fox Kids Poland, Minimax (Central European children’s channel) and Donatus (Dutch weather channel). Chellomedia also owns or manages LG Europe’s minority interests in other European businesses. These include a 50% interest in Melita Cable PLC, the cable television and broadband network in Malta; a 25% interest in Telewizyjna Korporacja Partycypacyjna S.A., a DTH platform in Poland; and the company’s investment in Telenet.
Telenet Ownership: Telenet provides broadband cable services in Belgium. As of December 31, 2006, the company indirectly owned 28.8% of Telenet’s then outstanding ordinary shares. The Investcos hold in the aggregate 12.1% of the Telenet common stock.
Belgian Cable Holdings, a Delaware partnership and an indirect wholly owned subsidiary of LGI Ventures, owns a majority common equity interest and a 100% preferred interest in Belgian Cable Investors. Belgian Cable Holdings holds 89.5% of the common equity interests and 100% of the preferred interests in Belgian Cable Investors.
Telenet Operations: Telenet offers video cable, broadband Internet and fixed and mobile telephony service in Belgium, primarily to residential customers in the cities of Flanders and Brussels. Telenet also offers a range of voice, data and Internet services to business customers throughout Belgium under the brand Telenet Solutions.
Asia/Pacific
The company operates in Japan and Australia. Its Japanese operations are conducted primarily through Super Media and its subsidiary J:COM, and through Jupiter TV. As of December 31, 2006, the company owned a 58.7% controlling interest in Super Media, Super Media owned a 62.5% controlling ownership interest in J:COM, and owned a 50% ownership interest in affiliate Jupiter TV. Its Australia operations are conducted primarily through Austar in which the company owned a 53.4% controlling ownership interest as of December 31, 2006.
Jupiter Telecommunications Co., Ltd.
J:COM is a major broadband provider of bundled entertainment, data and communication services in Japan. J:COM operates its broadband networks through 24 managed local cable companies. J:COM owns a 45% equity interest in its one managed franchise. J:COM’s services include video, broadband Internet and telephony.
J:COM’s managed franchises are clustered around three metropolitan areas of Japan, consisting of the Kanto region (which includes Tokyo), the Kansai region (which includes Osaka and Kobe) and the Kyushu region (which includes Fukuoka and Kita-Kyushu). In addition, J:COM owns and manages a local franchise in the Sapporo area of Japan that is not part of a cluster.
Each managed franchise consists of headend facilities receiving television programming from satellites, traditional terrestrial television broadcasters and other sources, and a distribution network composed of a combination of fiber-optic and coaxial cable, which transmits signals between the headend facility and the customer locations.
J:COM offers analog and digital cable services in all of its managed franchises. J:COM analog television service consists of approximately 46 channels of cable programming and analog terrestrial broadcasting and broadcast satellite channels, not including premium services. A typical channel line-up includes major channels in the Japanese market, such as Movie Plus, a top foreign movie channel, the Jupiter Shop Channel, a home-shopping network, J Sports 1, J Sports 2 and Sports ESPN, three major sports channels, the Discovery Channel, the Golf Network, the Disney Channel and Animal Planet, in addition to retransmission of analog terrestrial and satellite television broadcasts. As of December 31, 2006, J:COM’s digital television service included approximately 62 channels of cable programming, digital terrestrial broadcasting, and broadcast satellite channels, not including audio and data channels and premium services. The channel line-up for the digital service includes 18 HD channels. J:COM provides its digital cable subscribers VoD and, pay-per-view functionality, allowing those subscribers to receive programming that is not available to J:COM’s analog cable subscribers.
In April 2006, J:COM introduced to its digital television customers a digital video recording service, which utilizes digital set top boxes equipped with an internal hard disk drive capable of recording approximately 20 hours of digital HD programming. J:COM also offers both its analog and digital subscribers optional subscriptions for an additional fee to premium channels, including movies, sports, horseracing and other special entertainment programming, either individually or in packages. J:COM offers package discounts to customers who subscribe to bundles of J:COM services. In addition to the services offered to its cable television subscribers, J:COM also provides terrestrial broadcast retransmission services to approximately four million additional households in its franchise areas.
J:COM offers broadband Internet access in all of its managed franchises through its wholly owned subsidiary, @NetHome Co., Ltd, and its subsidiary, Kansai Multimedia Services (KMS). These broadband Internet access services offer downstream speeds of mainly either 30 Mbps or 8 Mbps. As of December 31, 2006, J:COM held a 76.5% interest in KMS, which provides broadband Internet access in the Kansai region of Japan. J:COM offers the J:COM NET Hikari service for multiple dwelling units connected to J:COM’s network by optical fiber cables. J:COM NET Hikari offers downstream speeds of approximately 100 Mbps.
J:COM offers telephony services over its own network in all of its consolidated franchise areas. J:COM’s headend facilities contain equipment that routes calls from the local network to telephony switches (a majority of which J:COM owns), which in turn transmit voice signals and other information over the network. J:COM also utilizes VoIP technology in certain franchise areas. J:COM provides a single line to the majority of its telephony customers, most of whom are residential customers. J:COM offers additional premium services, including call-waiting, call-forwarding, caller identification and three-way calling, for a fee. In partnership with WILLCOM, Inc, a personal handphone system service provider in Japan, in March 2006 J:COM began offering a mobile phone service called J:COM MOBILE.
In addition to its 24 managed franchises, J:COM owns non-controlling equity interests of 5.5% and 20% in two cable franchises that are operated and managed by third-party franchise operators.
J:COM sources its programming through multiple suppliers, including Jupiter TV. J:COM and Jupiter TV each owns a 50% interest in Jupiter VoD Co., Ltd., a joint venture formed to obtain VoD programming content to offer VoD services to J:COM franchises. J:COM offers VoD services to its digital customers in a majority of its franchises.
The company’s interest in J:COM is held through Super Media, an entity that is owned 58.7% by it and 41.3% by Sumitomo Corporation (Sumitomo). Pursuant to the operating agreement of Super Media, the company and Sumitomo’s entire interest in J:COM is held through Super Media.
Jupiter TV Co., Ltd.
Jupiter TV, an equity affiliate, is a joint venture between Sumitomo and the company that primarily develops, manages and distributes pay television services in Japan on a platform-neutral basis through various distribution infrastructures, primary cable and DTH service providers, and alternative broadband service providers using fiber-to-the-home or FTTH, and ADSL platforms. As of December 31, 2006, Jupiter TV owned four channels through wholly or majority owned subsidiaries and had investments ranging from 10% to 50% in 14 additional channels. Jupiter TV’s majority owned channels are a home shopping network (Jupiter Shop Channel, in which Jupiter TV has a 70% interest and Home Shopping Network has a 30% interest), a movie channel (Movie Plus), a golf channel (Jupiter Golf Network), and a women’s entertainment channel (LaLa TV). Channels in which Jupiter TV holds investments include four sports channels owned by J Sports Broadcasting Corporation (J Sports Broadcasting), which is a 34% owned joint venture with Sony Broadcast Media Co., Ltd. (Sony), Fuji Television Network, Inc., SOFTBANK Broadmedia Corporation, Skyperfect Communications, Inc. and Itochu Corporation; Animal Planet Japan, a one-third owned joint venture with Discovery Networks and BBC Worldwide; Discovery Channel Japan and Discovery HD through a 50% owned joint venture with Discovery Networks; AXN Japan, a 35% owned joint venture with Sony; and Reality TV Japan, a 50% owned joint venture with Zonemedia Enterprises, Ltd., an indirect subsidiary of Chellomedia.
The majority of channels in which Jupiter TV holds an interest are marketed as basic television services to cable system operators, with distribution at December 31, 2006, ranging from 16.9 million homes for Jupiter Shop Channel to 870,000 homes for channels, such as Discovery HD.
Each of the channels in which Jupiter TV has an interest, except for Discovery HD, is also offered on SkyPerfecTV1, a digital satellite platform that delivers approximately 160 linear video channels (24 hours a day) a la carte and in an array of basic and premium packages, from two satellites operated by JSAT Corporation (JSAT). Each of the channels, except for Reality TV Japan and Discovery HD, is also offered on SkyPerfecTV2, another satellite platform in Japan, which delivers approximately 65 linear channels (24 hours a day).
In the case of distribution of Jupiter TV’s 33% owned channels on SkyPerfecTV1, these licenses and satellite capacity leases are held through its subsidiaries, Jupiter Satellite Broadcasting Corporation (JSBC) and Jupiter Satellite Broadcasting Corporation 2 (JSBC2), except for AXN Japan and the J Sports Broadcasting channels which hold their own licenses. The broadcast licenses and satellite capacity leases for those of Jupiter TV’s 33% owned channels that are delivered by SkyPerfecTV2 are held by four other companies that are majority owned by unaffiliated entities.
The majority of channels in which Jupiter TV holds an interest are marketed as basic television services to DTH subscribers, with distribution as of December 31, 2006 ranging from 3.5 million homes for Jupiter Shop Channel to 416,000 homes for Jupiter Golf Network, which is a premium channel on the SkyPerfecTV platforms.
The majority of channels in which Jupiter TV holds an interest are marketed as basic television services to alternative broadband subscribers, with distribution as of December 31, 2006, ranging from 166,000 homes for Jupiter Shop Channel to under 100,000 homes for most other channels.
Jupiter TV operates Jupiter VoD, a 50% owned joint venture with J:COM, which has access to 922,000 VoD-enabled digital cable subscribers as of December 31, 2006. Jupiter TV also operates Online TV, a 55% owned joint venture with SECOM Co., Ltd., Tohokushinsha Film Corporation and Nikkei Shinbun. Online TV is a content aggregation platform for broadband television services supplying channels, including the majority of channels in which Jupiter TV holds an interest, to various broadband Internet service providers. Sumitomo and the company each own a 50% interest in Jupiter TV.
Japan — Other
The company also owns an interest in Mediatti Communications, Inc. (Mediatti). Mediatti is a provider of cable television and broadband Internet access services in Japan with approximately 157,000 video customers and 90,000 broadband Internet customers. The company’s interest in Mediatti is held through Liberty Japan MC, LLC (Liberty Japan MC), a company of which, as of December 31, 2006, owned 95.2% and Sumitomo owned 4.8%. As of December 31, 2006, Liberty Japan MC owned a 45.6% voting interest in Mediatti.
Australia
As of December 31, 2006, the company owned a 53.4% controlling interest in Austar. Austar operates as a pay television service provider to regional and rural Australia and the capital cities of Hobart and Darwin. Austar also provides broadband Internet access and mobile telephony services to subscribers in these markets.
Austar’s pay television services are primarily provided through DTH satellite. FOXTEL Management Pty, Ltd. (FOXTEL), the other main provider of pay television services in Australia, has leased space on an Optus C1 satellite. Austar and FOXTEL have entered into an agreement pursuant to which Austar is able to use a portion of FOXTEL’s leased satellite space to provide its DTH services. FOXTEL manages the satellite platform on Austar’s behalf as part of such agreement.
Austar’s DTH service is available to 2.4 million households. Austar’s territory covers all of Tasmania and the Northern Territory and the regional areas outside of the capital cities in South Australia, Victoria, New South Wales and Queensland. FOXTEL’s service area is concentrated in metropolitan areas. Austar also operates a small digital cable network in Darwin.
Austar’s DTH service offers approximately 120 premier channels, NVoD and interactive services. Austar’s channel offerings include movies, sport, lifestyle programs, children’s programs, documentaries, drama and news. The NVoD service include 30 channels, dedicated to movies. The interactive services include Sports Active, Weather Active and SKY News Active, three games services and approximately 20 digital radio channels. For the base level service a subscriber receives 33 channels. In addition to residential subscribers, Austar also provides its television services to commercial premises, including hotel, retail and licensed venues.
Austar owns a 50% interest in XYZ Networks. XYZ Networks is the owner and/or distributor of 11 key programming channels: Discovery Channel, Nickelodeon, Nick Jr., arena, The LifeStyle Channel, LifeStyle Food, Channel [v], Club [v], MAX, CMC and The Weather Channel. These channels are distributed throughout Australia. Austar’s partner in XYZ Networks is FOXTEL. Through XYZ Networks and other agreements, Austar has various long-term key programming agreements for its regional territory.
Austar offers a dial-up Internet service, which is outsourced and available throughout Australia. In addition, Austar offers mobile telephony services through reseller agreements.
Austar owns significant holdings of 2.3 GHz and 3.5 GHz spectrum throughout its regional territory. This spectrum is suited for new Worldwide Interoperability for Microwave Access (WiMAX) based telecommunications services. In 2006, Austar launched WiMAX in two trial markets for broadband Internet services.
In addition to its interests in Austar, the company owns a 20% equity interest in Premium Movie Partnership (PMP), which supplies three premium movie-programming channels to both Austar and FOXTEL. PMP’s partners include Showtime, Twentieth Century Fox, Sony Pictures, Paramount Pictures and Universal Studios.
The Americas
The company’s operations in the Americas are conducted primarily through its 80% owned subsidiary VTR in Chile and wholly owned subsidiary Liberty Puerto Rico. It also has subsidiaries that are broadband providers operating in Brazil and Peru, as well as a joint venture interest in MGM Networks Latin America and a subsidiary in Argentina, both of which offer programming content to the Latin America market.
VTR: The company’s primary Latin American operation, VTR, is Chile’s major multi-channel television provider, and is a broadband Internet access provider, and provider of residential telephony services. VTR provides services in Santiago, Chile’s major city, the regional cities of Iquique, Antofagasta, Concepción, Viña del Mar, Valparaiso and Rancagua, and smaller cities across Chile.
VTR’s channel lineup consists of 22 to 83 channels segregated into two tiers of analog cable service: a basic service with 22 to 68 channels and a premium service with an additional three to 15 channels. VTR offers basic tier programming similar to the basic tier program lineup in the United States, includes premium channels such as HBO, Cinemax and Cinecanal on the basic tier. VTR obtains programming from the United States, Europe, Argentina and Mexico. VTR also offers a digital platform as a premium service with programming options of 42 video channels, 40 music channels, 10 pay-per-view channels and VoD.
VTR offers alternatives of always on, unlimited-use broadband Internet access to residences and SOHO offices under the brand name Banda Ancha in 25 communities within Santiago and 18 cities outside Santiago. VTR offers telephony service over its cable network to customers in 25 communities within Santiago and 18 cities outside Santiago through either switched circuits or VoIP, depending on location. VTR offers basic dial tone service as well as various value-added services. VTR primarily provides service to residential customers who require one or two telephony lines. It also provides service to SOHO customers. VTR offers telephony services through VoIP to its two-way homes passed.
Dispositions
In January 2006, the company sold 100% of its Norwegian broadband communications operator, UPC Norge AS, to an unrelated third party. In June 2006, the company sold 100% of its Swedish broadband communications operator, NBS Nordic Broadband Services AB, to a consortium of unrelated third parties. In July 2006, the company sold 100% of its French broadband communications operator, UPC France SA, to a consortium of unrelated third parties. In December 2006, the company sold UPC Belgium NV/SA (UPC Belgium), which owns and operates broadband communications systems in Belgium, to Telenet.
Competition
The company’s competitors include DTT service, Digitenne, KPN, Telekom Austria AG, Digi TV, Antenna Hungaria Rt., Magyar Telekom Rt., Japan Broadcasting Corporation, WOWOW, Inc., SkyPerfecTV, NTT, KDDI Corporation, Opticast, Inc., K- Opticom Corporation, Itochu Corporation’s I-Cast, Inc., Swisscom, Telkom Austria., Usen Corporation, Tokyo Electric Power Company Incorporated, K-Opticom Corporation, Softbank Corporation, Telefónica S.A, Entel S.A., Japan Telecom Co., Ltd., CTC, Telsur, GTD Chile S.A., Telefónica Móviles S.A., Smartcom PCS, and Entel PCS Telecomunicaciones S.A.
History
Liberty Global, Inc. was founded in 2004.
