Austar on the Way to Break Even

[Sydney, AUSTRALIA] Austar United Communications’
results for the first half of 2000 show a 48 percent revenue growth and a 25 percent
improvement in earnings (EBITDA) compared to the same six month period in 1999.
EBITDA for the company still represented a loss of $15.4 million (US $9.6

Austar’s core pay-TV businesses performed “consistently” while early signs from the
deployment of data services were encouraging, according to the company, with 80
percent of Austar’s new Internet customers in Australia also taking up pay-TV
subscriptions. Austar said the Internet services were helping to reduce churn in both
Australia and New Zealand, with Austar Entertainment churn reaching an all time
low of 2.6 percent.

“One of the most pleasing aspects of this result is the fact that our
three core businesses, AUSTAR Entertainment, XYZ and the residential [New
Zealand] business in Telstra Saturn continue to perform very well,” said John Porter,
chief executive of Austar United.

AUSTAR Entertainment subscribers grew by 16,500 for the quarter resulting in
revenue growth of 36 percent and an improvement in EBITDA of 95 percent
compared to the same six month period in 1999.

XYZ grew subscribers by 54,000 for the quarter to over 1 million.
This saw its operating profit increase to over $12 million for the six
month period.

“XYZ’s position will continue to improve as advertising revenues grow
and new services are added,” Porter claimed.

Austar and its broadband partner chello now provide Internet services to 400,000
homes, next on the horizon are interactive television services and a mobile telephony
business using Telstra’s CDMA network.

During the quarter Austar acquired OntheNet in the Gold Coast and Ultranet in
Townsville. It was recently forced to extend its takeover bid for eisa Limited and
agreed to take a stake in TVSN Limited. Austar also reached an agreement with
LookSmart to provide utilities for its Internet services.

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