Cincinnati Bell 2007 Annual Report Download - page 4

customers in the Cincinnati and Dayton region.
Subscribers grew 5 percent in 2007 while ARPU grew
by 16 percent.
571
481 496 528
200620052004 2007
Wireless Subscribers
(in thousands)
Technology Solutions grew revenue by 19 percent,
operating income by 15 percent and Adjusted EBITDA
by 36 percent in 2007. This success is the result of
double digit revenue growth in all business lines,
including a 43 percent increase in data center and
managed services. In addition to rapid revenue growth,
gross profit percent margins also expanded across the
business. Our data center investments continue to be
both a driving force behind this segment’s profitability
growth as well as providing the basis for the ultimate
business bundle, which drives profitable growth across
our Wireline and Wireless segments as well.
We are Executing Our Core Strategy of “Defend, Delever
and Grow”
Revenue grew 10 percent across all three segments for
our business customers in 2007. At the end of 2007,
business customers represented 57 percent of total
revenue, a 2-point expansion from 2006. Expanding
our relationship with our business customers is a key
driver of our growth strategy. Although we are
expanding our relationships by providing wireless and
wireline services, we believe that data center co-location
services will be an increasingly important and vital
service for most businesses over the next few years. By
the end of 2007, we increased our data center capacity
by 58 percent to 144,000 square feet with a utilization
rate of 93 percent. We also expanded our geographic
reach and service capability with the acquisition of
GramTel USA, Inc. (“GramTel”), a regional provider of
data center, disaster recovery and business continuity
services, located in South Bend, Indiana. GramTel gives
us immediate access to Chicago and its surrounding
markets as well as a focused offering for small and
medium-sized businesses.
In addition to the acquisition of GramTel, Cincinnati
Bell completed in the first quarter of 2008 the
acquisition of eGIX Inc. (“eGIX”), a privately-held
competitive-service provider headquartered in Carmel,
Indiana. This transaction is a natural extension of our
success with business customers in our existing
expansion markets, such as in Dayton, and gives us an
immediate relationship with small and medium-sized
business customers throughout Indiana and part of
Illinois. With their focus on innovation and exceptional
customer service, eGIX’s service offerings complement
our capabilities and will also lead to an expanded service
offering to our existing customers.
In 2007, we also expanded our product capability for
residential customers with the purchase of a
telecommunications company (“Lebanon”), which
provides local phone and cable to a small community
just outside of our traditional local operating area, and
is located in Lebanon, Ohio. This acquisition provides a
learning environment and possibly the platform to offer
the most extensive bundle of consumer services: home
phone, high speed internet, home security monitoring,
cable television and wireless services.
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