A2000 and the Municipality of Amsterdam Agree on the Large Scale Introduction of Digital Decoders.

AMSTERDAM--(BUSINESS WIRE)--April 14, 1999--

A2000, the Amsterdam cable network operator which is 50% owned by United Pan-European Communications (UPC), and the municipality of Amsterdam have reached an agreement on the large scale introduction of digital decoders during the course of the year 2000.

The massive digital roll out will be combined with a reduction of the basic cable TV package to 15 public channels, of which eight will be classified as "must carry" channels. By means of a digital set top box, customers will have access to a wide variety of services, including multiple thematic and ethnic tiers, premium channels, near video on demand, digital radio and Internet, which will be available over both their TV and PC terminals. As popular commercial broadcasters will be part of one of the tiers, penetration of the digital set top boxes is expected to be very high from day one onwards.

"This is a breakthrough agreement for the future of cable services in Europe," said Mark Schneider, Chairman and CEO of UPC, commenting on the Municipality's decision today. "We are committed to revolutionizing the provision of voice, video and data services to business and residential customers throughout Europe. The agreement today has secured for the people of Amsterdam a wide choice of programming delivered at prices they can afford over the very latest technology. UPC's set top digital decoders will turn subscribers' TV screens into PC terminals and give consumers unparalleled choice and access to the new world of digital communications.

"The introduction of our digital decoders to A2000's subscribers will serve as the template for the roll out, over time, of UPC's "triple play" proposition -- the provision of voice, video and data services over a single cable link -- across all our territories in Europe. We are delighted that the municipality of Amsterdam has embraced this exciting future for its residents."

The digital decoder boxes will be able to perform a wide variety of functions. First, they will decode hundreds of analogue and digital video channels, including impulse pay per view channels, digital audio formats, and different "bouquets" of themed programming. Second, each device contains a broadband cable modem, capable of delivering data and Internet access at very high speeds. Third, the box incorporates a keyboard and mouse effectively allowing Internet and data access over a customers' television set. And fourth, each device is prepared to deliver IP (Internet Protocol) telephony as this exciting new service becomes commercially available in the future. A2000 of course already delivers circuit switched telephony to over 20,000 customers in Amsterdam.

During the period preceding the migration to the digital era, A2000 and the municipality of Amsterdam have also agreed on an interim solution for the basic tier service. From 1 May, the basic package will be extended from 26 to 32 TV channels. The monthly subscription fee will increase at the same time from 16.52 to 18.77 NLG, incl. VAT. Per 1 January 2000, a further increase to 20.50 NLG will lift the subscription fee to the national average level.

Once the digital decoders are introduced, the monthly fee for the reduced basic package of 15 public channels will be limited to 15 NLG, incl. VAT. The tariff for a tier with the basic service and the most popular commercial channels will be 23.50 NLG, incl. VAT and rental of the digital decoder. In 2001, this tariff will increase to 24.95 NLG incl. VAT.

The municipality of Amsterdam (through the programming council) will continue to nominate the non-commercial programmes (other than must-carry programmes) for carriage in the 15-channel basic package. Pricing for the basic package and the first tier will be governed by the agreement between the municipality of Amsterdam and A2000. However, pricing and composition of all other digital packages will be freely determined including, from 1 January 2001, the first tier.

The agreement means that A2000 will no longer charge carriage fees to commercial broadcasters for inclusion in the basic package. Carriage fee charges were the reason why certain channels had disappeared from the basic package over a period of time. Some are now returning, such as CNN and MTV. Other new channels are Net 5 (which, due to a temporary agreement, has been distributed since its launch on 1 March) and the Moroccan public broadcaster RTM. The two remaining slots were offered to Eurosport and Discovery, but both declined to be broadcast as the agreement between A2000 and the municipality of Amsterdam explicitly excluded channels receiving payments for carriage in the basic service. As a consequence, the National Geographic Channel is now part of the new basic tier, as will be Extreme Sports, a new sports channel, which is being launched by UPCtv.

The agreement will initially affect approximately 390,000 customers of the basic cable service in the greater Amsterdam area. A2000 intends to offer as soon as possible a uniform package of programmes at a similar tariff of prices throughout its complete service area which covers close to 530,000 customers. To this extent, negotiations have already started up with the remaining municipalities of Zaanstad, Purmerend and Hilversum.

The agreement has been reached after intensive and constructive negotiations with the Amsterdam municipality. Commenting on the deal, A2000 Chief Executive Officer, Peter Reinartz said today: "Thanks to this deal, the infamous electronic highway will no longer be an idle cry. With the arrival of the digital decoder, the entire Amsterdam population will have access to a digital world with limitless possibilities. Once more, Amsterdam and A2000 are light years ahead."

Already today, A2000 is one of the most advanced cable operators in the world. On its HFC upgraded infastructure, customers are offered a unique "triple play" of telephony, Internet and enhanced video services (including expanded basic tiers, premium channels and interactive pay-per-view). In addition to its nearly 530,000 video service subscribers, the company has more than 20,000 residential telephony line customers and over 10,000 Internet subscribers.

A2000 is a partnership between United Pan-Europe Communications and MediaOne International which each holds 50% of the shares.

Headquartered in Amsterdam, UPC is one of the most innovative broadband communications companies in Europe and owns and operates the largest pan-European group of broadband communication networks. UPC provides cable television, telephony, high speed Internet access and programming services in ten countries across Europe and in Israel. As of Feb. 28, 1999 UPC's systems passed approximately 4.8 million homes with 3.5 million basic cable subscribers, of which approximately 500,000 take an expanded tier service. In addition, UPC had 92,600 telephone access lines and 20,500 carrier select customers, as well as 32,335 broadband Internet access subscribers. UPC completed an IPO in February 1999 and its shares are listed on the Amsterdam Stock Exchange ("UPC") and NASDAQ ("UPCOY").

UPC is a consolidated subsidiary of United International Holdings Inc. (UIH)(NASDAQ:UIHIA). Microsoft Corp. has an interest of approximately 7.8% in UPC.