Cincinnati Bell 2009 Annual Report Download - page 74

Voice services
The Wireline segment provides voice services over a digital circuit switch-based network to end users via
access lines. In recent years, the Company’s voice access lines have decreased as its customers have increasingly
employed wireless technologies in lieu of wireline voice services (“wireless substitution”), have migrated to
competitors, including cable companies that offer VoIP solutions, or have been disconnected due to credit
problems. The Wireline segment had approximately 723,500 voice access lines in service on December 31, 2009,
which is a 7% and 13% reduction in comparison to 779,700 and 834,300 access lines in service at December 31,
2008 and 2007, respectively.
In order to minimize the access line losses and to provide a greater value to its customers, the Company has
a history of providing bundled offerings, in which the customer can bundle two or more of the Company’s
services, such as wireless and an access line, at a lower price than if the services were purchased individually. In
early 2009, the Company began offering “Priced for Life,” which allows the customer to lock in a monthly price
for two or more services for the life of their services.
The Wireline segment has been able to partially offset the effect of access line losses on revenue by:
(1) increasing DSL high-speed internet penetration;
(2) increasing the sale of high capacity data circuits to business customers;
(3) increasing the sale of VoIP services; and
(4) increasing entertainment and high-speed internet subscribers with the Fioptics fiber-to-the-home product
suite.
Data, including DSL high-speed internet
The Company has deployed DSL capable electronics throughout its ILEC operating territory, allowing it to
offer DSL high-speed internet to over 96% of its ILEC customers. The Company’s DSL subscribers were
233,800, 233,200, and 221,500 at December 31, 2009, 2008, and 2007, respectively. The Company’s consumer
penetration for DSL service was 54% of ILEC addressable lines at the end of 2009, an increase of 6 percentage
points compared to the end of 2008. DSL revenue represented 34% of Wireline data revenue in 2009.
The Company’s wireline network includes the use of fiber optical cable, with SONET rings linking
Cincinnati’s downtown with other area business centers. These SONET rings offer increased reliability and
redundancy to CBT’s major business customers. CBT has an extensive business-oriented data network, offering
high-speed and high capacity data transmission services over an interlaced ATM — Gig-E backbone network.
Data transmission revenues represented 63% of Wireline data revenue in 2009. The remaining 3% of Wireline
data revenue in 2009 consisted mainly of dial-up internet access.
Long distance and VoIP services
The Company provides long distance and VoIP services primarily through its Cincinnati Bell Any Distance
Inc. (“CBAD”) and eVolve Business Solutions LLC (“eVolve”) subsidiaries. These entities provide long distance
and audio conferencing services to business and residential customers in the Greater Cincinnati and Dayton, Ohio
areas as well as other broadband services, including private line and MPLS, beyond its traditional territory to
business customers. Residential customers can choose from a variety of long distance plans, which include
unlimited long distance for a flat fee, purchase of minutes at a per-minute-of-use rate, or a fixed number of
minutes for a flat fee. In addition to long distance, business customers can choose from a variety of other
services, which include audio conferencing, dedicated long distance, and VoIP. At December 31, 2009, CBAD
had approximately 508,300 long distance subscribers, consisting of 331,900 residential and 176,400 business
subscribers, compared to 531,600 and 548,300 long distance subscribers at December 31, 2008 and 2007,
respectively. The decrease in subscribers from 2008 was related to a 6% decline in residential subscribers,
consistent with the CBT access line loss. Outside its traditional operating territory, the Company provides VoIP
services to business customers primarily located in Ohio, Indiana and Illinois. The Company believes its VoIP
operations will expand as business customers continue to look for alternatives to traditional ILEC-based
operations and the VoIP technology continues to improve. The VoIP access line equivalents increased from
7,600 at December 31, 2008 to 14,600 at December 31, 2009.
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