Moscow CableCom Gives Update

Announces its ComCor-TV network now passes 225,631 homes and businesses, below its expected rate of construction

July 21, 2005

3 Min Read

NEW YORK -- Moscow CableCom Corp. (Nasdaq: MOCC - News) today announced second quarter 2005 operational progress of its wholly-owned subsidiary, ComCor-TV (CCTV), a Russian company that provides broadband communication, information and entertainment services in Moscow under the brand name "AKADO".

As of June 30, 2005, AKADO's access network reached a total of 225,631 homes and businesses. This represents an increase of 27,152 homes, or 13.7%, year-to-date, of which 22,387 were activated in the second quarter. Although new homes passed year-to-date are below the Company's expected rate of construction, the substantial amount of construction AKADO has completed passes approximately 27,600 additional homes, which AKADO expects will be activated in the third quarter of 2005. The company continues to design and plan construction in additional administrative regions within Moscow, which is expected to result in an accelerated rate of expansion in the second half of this year.

Terrestrial TV Services

As a result of this expanded access network and its continued marketing efforts, as of June 30, 2005, active subscribers for AKADO's terrestrial TV services totaled 72,495, a 10.8% increase from the December 31, 2004 total of 65,451 and a 19.9% year-on-year increase from June 30, 2004. Market penetration for terrestrial TV services among homes passed by AKADO's network was 32.1% as of June 30, 2005, as compared to 33.0% as of December 31, 2004.

Premium Cable TV Services

Active subscribers for AKADO's premium cable TV services decreased from December 31, 2004 by 11.9% to 6,405 as of June 30, 2005. However, this represents a year-on-year increase of 14.2% from the June 30, 2004 level. Market penetration for these premium cable TV services was 2.8% at June 30, 2005, as compared to 3.7% as of December 31, 2004. AKADO had temporarily reduced its marketing of television services while it prepared to implement a digital platform to provide expanded video product offerings to its customers. With the arrival of digital platform connection equipment in late June, AKADO began actively marketing its premium television services. This resulted in the connection of 577 new customers during the last nine days of the quarter, with orders and order flow improving for July installations.

Internet Access Services

AKADO's active subscriber base for Internet access services increased to 21,104 as of June 30, 2005, which represents an increase of 31.4% since year- end 2004 and a year-on-year increase of 100.6%. Market penetration for Internet access services increased to 9.4% as of June 30, 2005 from 8.1% as of December 31, 2004.

Warren Mobley, President and Chief Executive Officer, stated, "Regrettably, first half operating statistics do not fully reflect operational progress. However, we are confident that during the second half of this year, the growth in our homes passed network, implementation of digital services and aggressive marketing approaches aimed at accelerating our subscriber growth in existing and newly accessed areas in Moscow will demonstrate in a more evident way both the value and market acceptance of our broadband-based television and Internet access services."

As a result of the above changes in subscriber levels, Moscow CableCom expects second quarter revenues from subscriber services, excluding installation and equipment revenues or the recognition of previously deferred revenues, to total approximately $2,237,000, or a 6.9% increase from service revenues reported for the first quarter of 2005, and an 80.5% increase over the subscriber revenues of $1,239,000 reported in the second quarter of 2004. Year-to-date subscriber fee revenue of $4,330,000 is 85.8% more than the $2,330,000 of such revenues reported for the first six months of 2004.

Moscow CableCom Corp.

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