BREAKTHROUGH AGREEMENT IN SUBSCRIPTION TELEVISION

FOXTEL and Optus today announced a breakthrough agreement in subscription television for Optus to resell FOXTEL subscription television channels on the Optus Television cable network once all necessary conditions are satisfied.

Under the agreement, FOXTEL will assume Optus' financial obligations under its movie and other content arrangements. Subject to the consent of content providers, FOXTEL will also supply some Optus content over the FOXTEL platforms.

The FOXTEL service to be delivered on Optus will commence on 1 November 2002. In addition, from 1 April 2002, FOXTEL has agreed to supply two quality sports programming channels to Optus.

Optus' right to resell the FOXTEL services continues until 2010.

Once the arrangement takes effect, customers on both the FOXTEL and Optus platforms will have access to Australia's best subscription television content.

Concurrently, Optus will lease to FOXTEL a substantial volume of capacity on the Optus C1 satellite, which is scheduled to launch in late 2002.

Both parties said that the arrangements would re-energise the Australian subscription television sector, and give more Australians access to competitive attractive programming choices.

Optus Chief Executive, Chris Anderson, said the agreements would significantly strengthen Optus' bundled telephony and subscription television offering. "It will lead to the reconfiguration of an industry that is subscale for the benefit of the Australian consumer."

"Optus will benefit from more appealing subscription television content - particularly movies and sport - to bundle with our telephony and internet products. We will now be able to provide even more vigorous competition in local telephony and broadband services."

"Subscription television costs have long been an economic burden for Optus - in many ways hindering its development in the roll-out of local telephony and other new services. The implementation of this deal will remove that burden and give us a much stronger foundation for growth," Mr Anderson said.

FOXTEL's Chief Executive, Kim Williams, said: "We are delighted to be able to expand distribution of our FOXTEL channels through Optus. These arrangements will give more Australians more choices about how to receive FOXTEL and will lead to greater competition in subscription television and telephony."

The Binding Conditional Agreement is subject to a number of matters including the ACCC not intervening in the transaction and consents from various content providers. The new content and satellite lease arrangements will come into effect if all necessary conditions are satisfied.

Details of packaging and pricing of the service and other matters will be announced in due course if the necessary conditions are satisfied.

For more information:
Stephen Woodhill
Optus
Phone: +61 2 9342 7850

Mark Furness
FOXTEL
Phone: +61 2 9200 1453