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29
RO GER S CO MMU NIC AT ION S IN C . 20 0 6 ANN UA L RE POR T
MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Summarized Wireless Su bscriber Results
Years ended December 31,
(Subscriber statistics in thousands, except ARPU, churn and usage) 2006 2005 Chg % Chg
Postpaid
Gross additions (1) 1,375.2 1,453.5 (78.3) (5.4)
Net additions (1) 580.1 603.1 (23.0) (3.8)
Total postpaid retail subscribers (1) 5,398.3 4,818.2 580.1 12.0
Average monthly revenue per user (“ARPU”) (2) $ 67.27 $ 63.56 $ 3.71 5.8
Average monthly usage (minutes) 545 503 42 8.3
Monthly churn 1.32% 1.61% (0.29%) (18.0)
Prepaid
Gross additions 615.4 576.5 38.9 6.7
Net additions (3) 30.2 15.7 14.5 92.4
Total prepaid retail subscribers 1,380.0 1,349.8 30.2 2.2
ARPU (2) $ 13.49 $ 13.20 $ 0.29 2.2
Monthly churn (3) 3.70% 3.54% 0.16% 4.5
(1) Total postpaid retail subscribers include approximately 31,000 subscribers acquired as part of the purchase of Call-Net Enterprises Inc. on July 1, 2005. These subscribers are not included in gross or net additions
for the year ended December 31, 2005.
(2) As defined. See the “Key Performance Indicators and Non-GAAP Measures” section.
(3) Effective November 9, 2004, the deactivation of prepaid subscribers acquired from Fido is recognized after 180 days of no usage to conform to the Wireless prepaid churn definition. This had the impact of
decreasing prepaid subscriber net losses by approximately 12,000 and reducing prepaid churn by 0.10% in the year ended December 31, 2005. There was no impact on the year ended December 31, 2006.
Wireless Net work Revenue
Network revenue of $4,313 mil-
lion accounted for 94.2% of
Wireless’ total revenues in
2006, and increased 19.3% from
2005. This increase was driven
by strong subscriber growth,
improved ARPU and higher
data revenues.
Net additions of postpaid voice
and data subscribers were
580,100 for 2006, compared to
603,100 in 2005. Prepaid sub-
scriber net additions were
30,200 for 2006, compared to
15,700 in 2005. Postpaid voice
and data ARPU was $67.27 for
the year ended 2006, a 5.8%
increase compared to 2005. ARPU has continued to benefit from
higher data, long distance and roaming revenues and an increase
in the penetration of optional services such as voicemail and caller
ID. As Canada’s only GSM-based provider, Wireless expects to con-
tinue to experience increases in outbound roaming revenues from
Wireless’ subscribers traveling outside of Canada, as well as strong
growth in inbound roaming revenues from travellers to Canada who
utilize Wireless’ network.
Data revenue grew by 54.5% year-over-year, to $459 million for the
year ended December 31, 2006. Data revenue represented approxi-
mately 10.6% of total network revenue in the year ended 2006,
compared to 8.2% in 2005, reflecting the continued rapid growth of
BlackBerry, wireless messaging,
mobile Internet access, down-
loadable ring tones, music,
games, and other wireless data
services and applications.
Prepaid ARPU was $13.49 for the
year ended 2006, an increase of
2.2% compared to 2005.
Monthly postpaid voice and
data subscriber churn decreased
to 1.32% in the year ended
December 31, 2006, from 1.61%
in the corresponding period of
2005, as a result of the contin-
ued trend toward multi-year
service contracts and Wireless’
proactive and targeted cus-
tomer retention activities as well as from the increased network
density and coverage quality resulting from the integration of the
Fido GSM network.
Monthly prepaid churn increased modestly to 3.70% for the year
ended December 31, 2006 from 3.54% in the corresponding period
of 2005.
Equipment Sales
Revenue from equipment sales for the year ended December 31,
2006, including activation fees and net of equipment subsidies,
was $267 million, up 8.5% from the corresponding period in 2005.
The year-over-year increase reflects the higher volume of handset
upgrades associated with subscriber retention programs combined
with the generally higher price points of more sophisticated hand-
sets and devices.
200620052004
WIRELESS POSTPAID AND
PREPAID SUBSCRIBERS
(In thousands)
5,3984,8184,184
1,3801,3501,334
Postpaid Prepaid
200620052004
$459$297$142
WIRELESS
DATA REVENUE
(In millions of dollars)