Cincinnati Bell 2013 Annual Report Download - page 4

We also see significant improvements in average revenue
per unit (ARPU) once neighborhoods are mature and
promotional rates have expired. Neighborhoods in
which we have been providing service for less than a
year have ARPU of approximately $120 compared to
non-promotional rates of approximately $140 in mature
neighborhoods.
Our churn results reinforce our belief that consumers
prefer our product. In 2013, our churn in single-family
neighborhoods was 2.2 percent, while churn for
apartments was 5.4 percent.
Our increased fiber investment has also proven critical
to delivering higher customer data speeds for our legacy
copper-based products in areas around the Fioptics
deployment. At the end of 2013, we were able to deliver
at least 10 Mbps of speed to more than 430,000
addresses and had approximately 39% of our consumer
customers choosing this speed or higher.
Strong demand for enterprise services resulted in an 8%
increase in our strategic fiber and IT-based business
products. Our consolidated business and carrier markets
generated $255 million of strategic revenue for the year,
up $18 million from last year. Revenue from our metro-
ethernet and MPLS products was up $11 million, or
8%, due to increase demand for cell site backhaul and
VoIP applications. Strategic managed and professional
services revenue was up 7% based on growth in our
virtual data center products, monitoring and
management services, and staff augmentation.
CyrusOne – A Sound Investment
2013 got off to a fast start with the IPO of CyrusOne.
We effectively own 69% of the economic interest of
that business, and our investment is currently valued at
approximately $1 billion. We remain bullish on
CyrusOne and are confident that demand for data
center colocation services will continue to be robust.
The lockup period for monetizing any portion of our
CyrusOne investment expired in January 2014. We
remain a patient investor and have the operational
flexibility and appropriate capital structure to ensure
that we execute on a well-timed and thoughtfully
coordinated monetization plan that balances our longer-
term upside in CyrusOne with the capital needs of our
growing fiber business.
This investment in a growing data center business will
ultimately enable us to repay debt to appropriate levels
and create shareholder value.
Wireless Business Generates Cash
As we noted last year, our Wireless business faces
intense competition from national companies. Even so,
our Wireless team continues to do a fantastic job
managing this business for cash flow.
In 2013, our Wireless business generated operating
income of $18 million for the year. Wireless revenue
was $202, down 17%, compared to 2012 and
consistent with the decrease in our subscriber base. As
we forecasted, our Wireless Adjusted EBITDA totaled
$63 million, down $22 million compared to 2012.
We continue to explore all of our strategic alternatives
for this business.
2