Rogers 2003 Annual Report Download - page 16

2003 Annual Report Rogers Communications Inc.
14
Letter to Shareholders
Rogers Cable also continued to deliver strong growth in its
high-speed Internet subscribers and revenues. In 2003
high-speed Internet subscribers climbed by almost 24% to
790,500, while high-speed Internet revenues grew by
almost 33% to $322.3 million. And robust growth is
expected to continue, assisted in 2004 as we further
increase the speed of our cable Internet service to 5Mbit
per second, and we launch a whole new Internet experi-
ence in alliance with Yahoo! – one of the world’s most
recognized global Internet brands. This partnership will
deliver high-speed Internet access bundled with a combi-
nation of customized Yahoo! products and services
optimized for broadband.
The digital and interactive services we are able to offer
today are made possible by the strength of our highly-
clustered network, which is one of the most advanced in
North America, with 99% of our homes passed digital-
ready and more than 92% of our plant upgraded to
750/860 MHz.
During 2004, Rogers Cable will begin to deploy the infra-
structure necessary to launch services representing another
exciting leg of its growth – investing in the future by
putting in place an advanced broadband IP multimedia
network to provide digital telephone and other new
services. The deployment plan, completion of which is
conditional upon supportive regulatory conditions, targets
a local telephony product launch in mid-2005 with initial
availability to approximately 1.8 million households.
Rogers’ local telephone service will allow consumers that
switch their home or business telephone service to Rogers’
Digital Phone service to keep their existing phone numbers
and receive popular calling features such as directory
assistance, enhanced 911 emergency service, call waiting,
caller ID and voicemail, as well as many new services that
are expected in the future such as videoconferencing and
integration of wired and wireless telephone services.
Wireless powers ahead as data gains traction
At Rogers Wireless, 2003 was a year when essentially all
of the key business metrics were moving in the right
direction – wireless voice and data subscribers up 11% to
3.8 million, network revenue up 16%, postpaid average
revenue per user (“ARPU”) up 2.9%, postpaid churn down
to 1.88%, operating profit up 38%, operating margins up
570 basis points and capital expenditures down 27%.
These results at Rogers Wireless reflect the significant
growth in the Canadian market; they reflect the consistent
discipline and focus around the core objective of profitable
growth; and they reflect the tremendous take-up of wire-
less data services.
The 16% growth in network revenue was driven by the
combination of a clear focus on the acquisition of higher-
value postpaid subscribers and the retention of and sale
of additional services to our existing customers. Our suc-
cess is clear and is evident in the double-digit increase in
subscribers, in the higher levels of postpaid net additions,
in the lower levels of churn and in the rising ARPU.
While the growing number of subscriber additions by the
industry is a clear sign that there is still ample growth
ahead in wireless voice services in Canada, wireless data
services have proven to be an exciting and profitable
addition to the already significant market opportunity.
The promise of wireless data has long been held out by
the industry as a significant source of future growth.
Increasingly, the future is becoming the present as the take-
up of wireless data services becomes a reality. In Canada,
Rogers Wireless is the best-positioned provider to capture
the wireless data opportunity by leveraging the power of
its coast-to-coast, global standard GSM/GPRS network and
universe of GSM/GPRS devices.