Cable & Wireless Optus today announced a substantial new financial deal for its supply arrangements with its major Hollywood studios.

Chris Anderson, Chief Executive of Cable & Wireless Optus, said a memorandum of understanding had been signed which gave major wins for both sides - substantial savings and reductions in minimum subscriber guarantees for Optus, and opportunities for expansion in Australia for the studios.

The deal brings reductions of nearly 40% in the minimum subscriber guarantee payments to the studios.

It is worth approximately $250 million to the company. The deal also includes an option to extend the supply arrangements beyond the current contract term.

Mr Anderson said the deal offered genuine benefits for both sides. "We will achieve substantial reductions in the minimum subscriber guarantees, and the studios have laid the groundwork for the much anticipated move away from exclusivity of content.

"As a result of the deal, non-exclusive content is now a genuine possibility", Mr Anderson said.

Mr Anderson said that under the deal the studios supplying exclusive content to Optus Television - Warner Brothers, The Walt Disney Company, Metro-Goldwyn-Mayer and Village Roadshow - would be free to supply content to other operators.

However, to ensure that both the studios and Cable & Wireless Optus benefited from the arrangements, that content would only be available if the other operators in turn made their content available to Optus on comparable terms.

"This agreement sees us achieve a real win/win outcome with the Hollywood Studios and Village Roadshow. The new arrangements will give Optus more flexibility, move away from unrealistic minimum subscriber rates, and will provide a wider potential audience for the studios.

"We have always said that we are happy for our movie content to be available to other Pay TV operators - if we get access to their movie content. We have always been keen to access the broadest range of movies available for our subscribers.

"This deal is not dependent on our rivals agreeing to share content. The memorandum of understanding, which is non-binding while the parties develop formal legal agreements over the next sixty days, ensures the opportunity exists to move to a more rational industry structure, allowing a reasonable return for all the companies involved while maximising quality content for subscribers.

"This deal delivers on the promise we made when we first reviewed the content arrangements - a move to a more rational structure for the industry, delivering real gains to both Cable & Wireless Optus customers and shareholders.

"Optus increasingly offers total communication solutions to our customers. At present, more than 60% of new Pay TV customers also take up one or more telephony or data services. We offer local and long distance telephony, Internet and Pay TV to households connected to our HFC network in one package. We are signing up new local telephony customers on the HFC network at a rate of more than 7000 each week.

"Pay TV is one part of Optus' suite of services. As with the recently announced deal with Excite@Home, which will enable us to provide the worlds best Internet service at what will be affordable prices, this movie deal will allow us to provide some of the best movie content at affordable prices.

"This deal will cement our relationship with the studios and should provide further opportunities to our multimedia group to expand their content services with some of the greatest content providers in the world," Mr Anderson said.

About Cable & Wireless Optus

Cable & Wireless Optus is Australia's only fully integrated communications company - servicing more than three million customers each day. The company provides a broad range of communications services including mobile, national and long distance services, local telephony, business network services, Internet and satellite services and television.

Since commencing operations in 1992, Cable & Wireless Optus has constructed fixed, mobile and satellite networks, including central business district and suburban local access networks. These networks are valued at $7 billion and provide the company with an advanced technology platform capable of delivering integrated communications, information and entertainment services.

Cable & Wireless Optus is a member of the Cable & Wireless Group, a leader in global communications operating in more than 80 countries around the world.

For more information:
Stephen Woodhill
National Media Manager
Cable & Wireless Optus
Phone: 02 9342 7850