Next GenerationNetworks

11 April 2008Sheraton Shanghai

Daniel LoHead of Next

Generation NetworkDevelopment

Sharing HKBNSharing HKBN’’s experience ofs experience ofdeveloping a futuredeveloping a future--proof NGNproof NGNarchitecturearchitecture

DisclaimerDisclaimerThis presentation contains forward-looking statements and information that involve risks, uncertaintiesand assumptions. Forward-looking statements are all statements that concern plans, objectives, goals,strategies, future events or performance and underlying assumptions and other statements that areother than statements of historical fact, including, but not limited to, those that are identified by the useof words such as "anticipates,'' "believes,'' "estimates,'' "expects,'' "intends,'' "plans,'' "predicts,''"projects'' and similar expressions.

Risks and uncertainties that could affect us include, without limitation: changes in technology; changesin the regulatory environment in which we operate, or changes in the rules and polices that governmentregulators apply to our businesses; increased competition in the local or internationaltelecommunications, Internet access or pay-TV markets; the benefits we expect to receive from ourcontinuing capital expenditure on our network; our ability to both maintain growth and successfullyintroduce new products and services; and the continued development and stability of the technologicalinfrastructure we use to provide our telecommunications and Internet services.

Should one or more of such risks and uncertainties materialize, or should any underlying assumptionprove incorrect, actual outcomes may vary materially from those indicated in the applicable forward-looking statements. Any forward-looking statement or information contained in this presentation speaksonly as of the date the statement was made.

We are not required to update any such statement or information to either reflect events orcircumstances that occur after the date the statement or information is made or to account forunanticipated events.

Profit from DifferentiationProfit from Differentiation

Operating StructureOperating Structure

City Telecom (HK) Limited

Listed Parent Company (CTEL)

Hong Kong Broadband Ltd

Main operating entity for FixedTelecoms Network Services

SGNB Singapore BroadbandNetwork Pte Limited

Bidder for Singapore License

100% 100%

Triple Play Services on NGN PlatformTriple Play Services on NGN Platform

FixedFixed

TelephonyTelephony

BroadbandBroadband

AccessAccessIPTVIPTV

22ndnd Global Highest in FTTH /Global Highest in FTTH /FTTB PenetrationFTTB Penetration

Ultra Condensed PopulationUltra Condensed Population

Population Density (Population / km2)Hong Kong = 6,407 (World rank #3)

UK = 246 (World rank #48)

People’s Republic of China = 137 (World rank #75)

Shanghai = 2,657

Hong Kong Shanghai

8

““Reverse Digital GapReverse Digital Gap””

“In Hong Kong, HKBN has created a “Reverse Digital Gap”whereby the

mass residential market on HKBN’s network coverage now enjoys superior

value and choice (25Mbps - 1000Mbps) for broadband services”

ProfitProfit…….It.It’’s all about Bandwidths all about Bandwidth

NGN InNGN In--building Blockwiringbuilding Blockwiring

LAN Switches within100m of end users

<100 meters ofCategory 5e Copper

Wiring

Fiber-To-The-Building

LAN Switches within100m of end users

<100 meters ofCategory 5e Copper

Wiring

Fiber-To-The-Building

Municipal FTTx NetworksMunicipal FTTx Networks

111

C o re In te rne t B ackboneN etw ork

In te rne t C ore

O N S 1 5454C isc o IP +O ptica l N e tw o rk

N * 10 G D W D M /R O A D M

N * 10G E/G E

IP M ulticastV id eo S ervers

1 0 M

1 00M

1000M

S TBS TB

TD MTD M E 1 C ircu it E m u lationE 1 C ircu it E m u lation

B ro ad b an dB ro ad b an d

V o IPV o IP

IP T VIP T V

N * 10G E /G E

N * 10G E/G E

N * 10G E/G E

FibreOptics ofReseller

Trench Route (100 m)

Trunk Route

FibreOptics ofHKBN

Trench Route (35m)

Trunk Route

Main Telecom andBroadcasting Equipment(TBE) Room

07

Comparison of FTTB andComparison of FTTB andFTTH Broadband AccessFTTH Broadband Access

08

Telecom Facilities ofTelecom Facilities ofResellers inside buildingResellers inside building

09

Unbundled InterconnectionUnbundled Interconnectionof Resellers and Incumbentof Resellers and Incumbent

Main Telecom andBroadcastingEquipment (TBE)Room

10

InterInter--buildingbuilding FibreFibre ConnectionConnection

Fibre Distribution Frame in TelecomFacility Room

Fibre Cable To Central Office

4/F

12/F

G/F Lift Lobby

Fibre box in typicalfloors

Drop-in fibre inconcealed conduit

11

InIn--building FTTH Connectionbuilding FTTH Connection

1 million households1 million householdswithin 32 monthswithin 32 months

0

200

400

600

800

1,000

1,200

Feb-00 Nov-00 Sep-01 Jul-02

1 million household within 32months from award of license

Catalyst6500

Catalyst6500

Over 650,000 SubscribersOver 650,000 Subscribers

1.4 million Households1.4 million Households

Catalyst2950/3500

Voice

Video

Internet Access

VideoContent

VideoSVR

V

PSTNSS7

Catalyst2950/3500

EverythingEverything--overover--NGNNGN PlatformPlatform

PSTNPSTNPSTN

HKBNIMS

Platform

HKBNHKBNIMSIMS

PlatformPlatform

TDM

Ethernet

Ethernet

Ethernet

Ethernet

or

VoIP Class 5 Switch

InternetInternetInternet

VoIP Gateway

MPEG-2 Encoder

Set Top Box

‘Plug and Pay’Service Access

Standard RJ45Ethernet Jack for25/100/200/1000

Mbps access

StandardRJ11 PhoneJack VoIP

access

Set-Top-BoxConverter forIP-TV access

10Mbps service for new customers terminated from September 2007

Unmatched Symmetric BandwidthUnmatched Symmetric BandwidthAdvantageAdvantage

Res. Bldg

House

Fibre Hub

OutdoorKiosk

TBE RoomUser

User

User

User

User

User

User

User

User

1x32Splitter

1x32splitter

Optical Line Terminal(OLT)

Optical LineTerminal (OLT)

To Switch

1.2Gbps

1.2Gbps

2.5Gbps

2.5Gbps

User

14

Enhancement of FTTH coverage in bothhigh-rise and low-dense buildings

GPON DeploymentGPON Deployment ––Future of FTTHFuture of FTTH

Fibre Ring

High Brand AwarenessHigh Brand Awareness

Network DifferentiationNetwork DifferentiationCampaignCampaign

25

World Leader inWorld Leader in ““Value for MoneyValue for Money””Broadband ServicesBroadband Services

26

- ARPU increased over 60% in 18 months, while the churn

rate reduced from 1.4% to 0.6%

€ 0

€ 5

€ 10

€ 15

€ 20

€ 25

Aug-05 Feb-06 Aug-06 Feb-07 Aug-07

BlendedAverage

Increasing BN ARPU &Increasing BN ARPU &Reducing ChurnReducing Churn

“High Bandwidth Enables NGN Development;NGN Enables Innovative Applications”

10 Second Movie Download10 Second Movie Download

29

Reverse AsymmetricReverse AsymmetricBandwidth DemandBandwidth Demand

Upstream traffic is 3 times of downstream traffic

Innovative applications rely on high upstream speed

*Weekly statistics from HKBN

facebook

QQ

Video Blogs (VBlogs)

High Definition Video

HandsetPhoto

Digital Camera

Increasing HighIncreasing HighBandwidth DemandBandwidth Demand

31

bbDrivebbDrive ––online backuponline backup

Backup your files

Share video/pictures with yourfriends

1Gbps symmetricbandwidthempowers you toaccess the files tobbDrive as easilyas your localdrive

bbTVbbTV -- Interactivity featuresInteractivity featuresInteractive Education Content

- like Times College (會考無難度), Kwik Maths (速算速訣), Idea Impulse (精彩e世代), etc.

FaceFace--toto--face Customer Experienceface Customer Experience

HKBN believe “High Bandwidth like Prada& Louis Vuitton to Ladies; Porsche &Rolex to Men….nothing special butdifferentiation from competitors…”

Presentation EndPresentation End