Cincinnati Bell 2009 Annual Report Download - page 75

In 2009, long distance and VoIP services produced $97.1 million in revenue for the Wireline segment
compared to $98.3 million in 2008, and $79.3 million in 2007. The increase in revenue in 2009 and 2008 as
compared to 2007 was primarily due to the acquisition in early 2008 of eGIX Inc. (“eGix”), a CLEC provider of
voice and long-distance service to business customers in Indiana and Illinois.
Fioptics product suite and other entertainment
In 2007, CBET purchased a local telecommunications business which offers voice, data and cable TV
services in Lebanon, Ohio for a purchase price of $7.0 million. As a result of this acquisition, the Wireline
segment offers cable TV services to selected customers in its operating territory. In addition, the Company’s
improvement of its wireline network over the last several years has included capital expenditures for fiber optical
cable in limited areas. The large bandwidth of fiber optical cable allows the Company to provide customers with
its Fioptics product suite of services, which include entertainment, high-speed internet and voice services, in
areas that the fiber optical cable is laid. The Company has focused its fiber network expenditures on high traffic
areas, such as apartments and condominium complexes as well as business office parks, and, as of December 31,
2009, the Company now “passes” and is able to provide its Fioptics services to 41,000 homes. As of
December 31, 2009, the Company had 11,100 entertainment, 10,200 high-speed fiber internet, and 7,500 voice
Fioptics customers.
In addition to providing entertainment over coaxial cable and fiber optical cable in limited areas, the
Company also is an authorized sales agent and offers DirecTV©satellite programming to customers in
substantially all of its operating territory through its retail distribution outlets. The Company does not deliver
satellite television services. Instead, DirecTV©pays the Company a commission for each subscriber and in some
circumstances may offer a bundle price discount directly to the Cincinnati Bell customer subscribing to its
satellite television service. At December 31, 2009 and 2008, the Company had 30,000 and 22,000 customers,
respectively, that were subscribers to DirecTV©.
Security monitoring services
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, 2009, CBCP had
approximately 13,600 monitoring subscribers in comparison to 11,800 and 9,900 monitoring subscribers at
December 31, 2008 and 2007, respectively. CBCP produced $4.9 million, $4.5 million, and $4.0 million in
revenue in 2009, 2008, and 2007, respectively, for the Wireline segment.
Public payphone
The Company’s public payphone business (“Public”) provides public payphone services primarily within
the ILEC operating territory. Public had approximately 1,800, 1,900, and 2,200 stations in service as of
December 31, 2009, 2008, and 2007, respectively, and generated approximately $1.0 million, $1.3 million, and
$1.9 million in revenue in 2009, 2008, and 2007, 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.
CBT’s subsidiary Cincinnati Bell Telecommunications Services LLC operates the National Payphone
Clearinghouse (“NPC”) in an agency function, facilitating payments from inter-exchange carriers to payphone
service providers (“PSPs”) relating to the compensation due to PSPs for originating access code calls, subscriber
800 calls, and other toll free and qualifying calls pursuant to the rules of the Federal Communications
Commission (“FCC”) and state regulatory agencies. As the NPC agent, the Company does not take title to any
funds to be paid to the PSPs, nor does the Company accept liability for the payments owed to the PSPs.
The Wireline segment produced revenue of $773.1 million, $803.6 million, and $821.7 million, or 58%,
57%, and 61% of consolidated revenue, in 2009, 2008, and 2007, respectively. The Wireline segment produced
operating income of $261.2 million, $261.7 million, and $252.5 million in 2009, 2008, and 2007, respectively.
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Form 10-K