Stream Communications Network and Media Inc.
OTC Bulletin Board : SCNWF

Stream Communications Network and Media Inc.

August 25, 2005 10:51 ET

Stream Communications Network and Media Inc.: Letter to the Shareholders

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Aug. 25, 2005) - Stream Communications Network and Media Inc. (OTCBB:SCNWF) -

On behalf of all members of the Board, I would like to extend my gratitude to those shareholders who continue to share and support the long-term vision of Stream. I would also like to thank all the long term shareholders for supporting the Company through the transition into the Cable Telecommunications sector in 2000.

Since that time Stream has demonstrated its ability to grow efficiently through acquisitions by successfully acquiring 14 CATV operators and three Internet providers bringing our current revenue generating units ("RGU's") to 58,500.

Stream has grown into the 8th largest cable provider in Poland and has achieved an average annual growth rate of 66.5% for the five year period ending June 30, 2005. The company is currently on pace to achieve a 57% increase in revenues for the 2005 year end. Historically we have been able to increase revenues from acquired networks by 30% on average within six months after acquisition. With Stream's existing structure and cost of operations in place, subsequent acquisitions will contribute 70% of revenue towards profit. We have centralized general and administration expenses and operating costs of new networks are limited to programming and utilities, hence high profitability.

Stream intends to continue its strategy of subscriber growth by acquisitions and has agreed to purchase an additional 6,000 cable TV subscribers in Southern Poland in the third quarter 2005. This acquisition will increase our RGU's to 64,500 subscribers and annualized revenues by approximately $490,000 USD, placing the company's operations in a cash flow positive position for the fourth quarter of 2005.

The Polish cable sector continues to be a very opportunistic environment for growth, with a fragmented market of more than 500 operators, no restrictions on foreign investment and increasing demand for new programming and other new revenue generating services. In addition, Poland has the largest number of Internet users among the new members of the EU, but penetration levels at approximately 25% are still well below EU averages and expected to reach 50% by 2009.

Cable Television operators are becoming major Internet Service Providers ("ISP's") and Stream sees ISP providers as potential targets to increase RGU's in combination with Company initiatives to launch VoIP services to existing Internet customers.

This is an important milestone for the Company as we approach a cash flow positive position and we look forward to further success as Stream unfolds its accomplishments throughout the year.

Robert Wussler, Chairman of the Board

Stream Communications Network & Media Inc.

Safe harbor for Forward-Looking Statements:

Except for statements of historical fact, the information presented herein constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, the ability to acquire and develop specific projects, the ability to fund operations and changes in consumer and business consumption habits and other factors over which Stream Communications Network and Media Inc. has little or no control.

Contact Information

  • Stream Communications Network and Media Inc.
    Michael Young
    (604) 669-2826
    (604) 669-2836 (FAX)