Cincinnati Bell 2004 Annual Report Download - page 5

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In 2004, we launched “You Add, We Subtract,” an
aggressive marketing campaign designed to better
leverage our bundled suite of communications serv-
ices. This campaign helped add 52,000 customers to
our Custom Connections®super bundle, which
offers combinations of local, long distance, DSL and
wireless services on a single bill. At the end of 2004,
fully 20 percent of our in-territory households sub-
scribed to a super bundle, nearly double the percent-
age at the end of 2003.
The strength of the bundle
Defensively, in an environment of increasingly aggres-
sive competition, bundling helps us retain access lines.
This was clearly evident in 2004 as the rate of access
line decline improved to 1.6 percent, better than our
original forecast of 2 percent to 4 percent, a full per-
centage point lower than the 2003 rate and better
than nearly all of our industry peers. Despite height-
ened competition from cable telephony, we reported
an increase of 16,000 in total connections—access
lines plus Digital Subscriber Lines (DSL).
Deeper market penetration
Offensively, bundling drives Revenue per Household
through customer retention and increases penetra-
tion of new products such as DSL and wireless serv-
ices. At the end of the day, Revenue per Household
truly captures the value of a bundling strategy
because it demonstrates the willingness of customers
to purchase multiple communications services from
Cincinnati Bell. In the fourth quarter, Revenue per
Household reached a new high of $77, up 5 percent
versus the fourth quarter of 2003.
Our goal is to deliver all the communication services
that customers want through our wireless and fixed
pipelines into customer homes and businesses.
Within the bundle of services we currently offer
to customers, DSL and wireless have the highest
growth potential.
DSL—faster than ever
High-speed Internet service, or DSL, helps anchor
our bundle. In 2004, we nearly quadrupled our DSL
speed with no increase in cost and no increase in
price to the customer. This helped us grow our DSL
subscriber base by 31 percent and achieve 14 percent
penetration of access lines. We now have the highest
DSL penetration of any publicly traded local
exchange carrier and this year our penetration grew
faster than any of our regional Bell operating
company peers. More evidence that bundling is
a strategy that works—more than 78 percent of
consumer gross activations of DSL in the fourth
quarter came as part of a bundle.
Staying connected through wireless
In wireless, we generated more gross sales activity as
a percent of our licensed POPs, or population, than
any other major carrier in the country. Gross wireless
activations totaled 243,000 up 27 percent from
2003. Again, the strength of bundling was clear as
76 percent of consumer postpaid activations in
Cincinnati came as part of the bundle.
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61
75
100
131
20042003200220012000
DSL Subscribers
(in thousands)