Cincinnati Bell 2006 Annual Report Download - page 117

The Technology Solutions segment produced total revenue of $216.6 million, $172.7 million, and $134.7
million and constituted approximately 17%, 14%, and 11% of consolidated revenue in 2006, 2005, and 2004,
respectively. The Technology Solutions segment produced operating income of $15.8 million, $13.4 million, and
$12.7 million in 2006, 2005, and 2004, respectively.
Other
The Other segment produced revenue of $79.0 million, $77.7 million, and $78.6 million in 2006, 2005, and
2004, respectively, constituting approximately 6%, 6%, and 7% of consolidated revenue in 2006, 2005, and
2004, respectively. The Other segment produced operating income of $25.8 million, $26.6 million, and $18.0
million in 2006, 2005, and 2004, respectively. The Other segment combines the results of the following
operations:
Cincinnati Bell Any Distance
CBAD provides long distance, audio conferencing, and VoIP services to businesses and residential
customers in the Greater Cincinnati and Dayton, Ohio areas. Residential customers can choose from a variety of
long distance plans, which include unlimited long distance for a flat fee, purchase minutes at a per-minute-of-use
rate or a fixed number of minutes for a flat fee. Business customers can choose from a variety of services, which
include audio conferencing, dedicated access, and, starting in 2006, VoIP. At December 31, 2006, CBAD had
approximately 552,000 subscribers, consisting of 395,000 residential and 157,000 business, compared to 564,000
and 562,000 long distance subscribers at December 31, 2005 and 2004, respectively. The decrease in subscribers
from 2005 was related to a 4% decline in residential subscribers, consistent with the CBT access line loss,
partially offset by a 4% increase in business subscribers. In 2006, CBAD produced $72.5 million in revenue for
the Other segment, representing approximately 6% of consolidated revenue, compared to $70.2 million or 6% of
consolidated revenue in 2005, and $64.1 million or 5% of consolidated revenue in 2004.
Cincinnati Bell Complete Protection Inc.
CBCP provides surveillance hardware and monitoring services to residential and business customers in the
Greater Cincinnati area. At December 31, 2006, CBCP had approximately 8,600 monitoring subscribers in
comparison to 7,000 monitoring subscribers at December 31, 2005 and 2004. CBCP produced $3.6 million, $2.9
million, and $3.9 million in revenue in 2006, 2005, and 2004, respectively, for the Other segment. At the end of
2004, CBCP discontinued sales of surveillance equipment to business customers who did not also have an
on-going monitoring service relationship. These sales comprised approximately $2.0 million of CBCP’s 2004
revenue; however, discontinuing these sales did not significantly reduce the segment’s operating income.
Public Payphone Business
Public provides public payphone services primarily within the geographic area of the Local segment. Public
had approximately 2,900, 3,700, and 4,600 stations in service as of December 31, 2006, 2005, and 2004,
respectively, and generated approximately $2.9 million, $4.5 million, and $10.6 million in revenue in 2006, 2005,
and 2004, respectively, or less than 1% of consolidated revenue in each year. The revenue decrease results
primarily from wireless substitution as usage of payphones continues to decrease in favor of wireless products
and a targeted reduction in unprofitable lines. In the fourth quarter of 2004, the Company also sold its payphone
assets located at correctional institutions and those outside of the Company’s operating area for $1.4 million. The
out-of-territory assets sold contributed approximately $2.6 million to the segment’s total revenue in 2004 with
only marginal contribution to the segment’s operating income.
Cincinnati Bell Entertainment
CBE was created in 2005 but does not have operations currently. It intends to eventually offer television
programming over the internet as an alternative to cable or satellite television service. The Company is reviewing
the rapidly evolving technologies involved with the internet protocol television (“IPTV”) product, and, while the
Company intends to eventually provide this service to customers in its operating areas, it has not had any
revenues to date and does not expect any revenues to be associated with this product in 2007. Operating
expenses, consisting mainly of labor costs, were $0.5 million in 2006 and $0.7 million in 2005.
7