Rogers 2008 Annual Report Download - page 42

38 ROGERS COMMUNICATIONS INC. 2008 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
available on a wholesale basis to other telecommunications provid-
ers. At December 31, 2008, there were 197,000 local line equivalents
and 34,000 broadband data circuits. Cable is increasingly focusing
its business segment sales efforts within its traditional cable tele-
vision footprint, where it is able to provision and serve customers
with voice and data telephony services provisioned over its own
infrastructure.
The Rogers Retail segment operates a retail distribution chain that
offers Rogers branded home entertainment and wireless products
and services. There were 456 stores at December 31, 2008, including
approximately 170 stores acquired in January 2007 from Wireless,
many of which provide customers with the ability to purchase any
of Rogers’ primary services (cable television, Internet, cable tele-
phony and wireless), to pay their Rogers bills, and to pick up or
return Rogers digital and Internet equipment. The segment also
offers digital video disc (“DVD”) and video game sales and rentals
through Canada’s second largest chain of video rental stores.
Cable’s Products and Ser vices
Cable has highly-clustered and technologically advanced broad-
band networks in Ontario, New Brunswick and Newfoundland and
Labrador. Its Ontario cable systems, which encompass approximately
90% of its 2.3 million basic cable subscribers, are concentrated in
and around three principal clusters: (i) the Greater Toronto Area,
Canada’s largest metropolitan centre; (ii) Ottawa, the national
capital city of Canada; and (iii) the Guelph to London corridor in
southwestern Ontario. The New Brunswick and Newfoundland and
Labrador cable systems in Atlantic Canada comprise the balance of
its cable systems and subscribers.
Through its technologically advanced broadband networks, Cable
offers a diverse range of services, including analog and digital
cable, residential Internet services and voice-over-cable telephony
services.
As at December 31, 2008, more than 88% of Cable’s overall network
and 99% of its network in Ontario has been upgraded to transmit
860 MHz of bandwidth. With approximately 99% of Cable’s net-
work offering digital cable services, it has a richly featured and
highly-competitive video offering, which includes high-definition
television (“HDTV”), on-demand programming including mov-
ies, television series and events available on a per purchase basis
or in some cases on a subscription basis, personal video recorders
(“PVR”), time-shifted programming, as well as a significant line-up
of digital specialty, multicultural and sports programming.
Cable’s Internet services are available to over 97% of homes passed
by its network. Cable’s high-speed Internet has been found to have
the fastest and most reliable speeds supported by independent
third-party research comparing average download speed to the
equivalent speeds of the incumbent DSL provider. Cable offers mul-
tiple tiers of Internet services, which are differentiated principally
by bandwidth capabilities and monthly usage cap size prior to addi-
tional usage charges.
Cable’s voice-over-cable telephony services were introduced in July
2005 and have grown both in the number of subscribers and in the
size of the geographic area where the service is available. Cable
offers packages that include from one to six calling features and
competitive unlimited or pay-by-the-minute long-distance plans.
Every Rogers Home Phone customer receives free long-distance
calling to Rogers Wireless, Rogers Home Phone and Fido custom-
ers. In addition, extended local calling areas have been created in
areas such as Barrie, Ontario and Ottawa, Ontario. At December 31,
2008, Cable’s voice-over-cable telephony services were available to
approximately 95% of homes passed by its network.
Cable offers multi-product bundles at discounted rates, which allow
customers to choose from among a range of cable, Internet, voice-
over-cable telephony and Wireless products and services, subject
to, in most cases, minimum purchase and term commitments.
Cable maintains a base of services sold to businesses, government
agencies and telecom wholesalers in many markets across Canada.
These services are made up of local and long-distance services,
enhanced voice and data services, and IP application solutions.
These services have historically been primarily based on re-sold
access networks. Cable has recently revised its focus away from
marketing and selling these off-net services to concentrate more
on developing offerings that utilize its own facilities within its tra-
ditional cable television serving areas.
Cable sells and services Rogers branded products and also offers
DVD and video game sales and rentals through Rogers Retail.
Cable’s Distribution
In addition to the Rogers Retail stores, Cable markets its services
through an extensive network of third party retail locations across
its network footprint. Rogers Retail provides customers with a
single direct retail channel featuring all of the wireless and cable
products and services. In addition to its own and third party retail
locations, Cable markets its services and products through a variety
of additional channels, including call centres, outbound telemar-
keting, field agents, direct mail, television advertising, its own
direct sales force, exclusive and non-exclusive agents, as well as
through business associations. Cable also offers products and ser-
vices and customer service via our e-business website, rogers.com.
The information contained in or connected to our website is not a
part of and not incorporated into this MD&A.
Cable’s Networks
Cable’s networks in Ontario and New Brunswick, with few excep-
tions, are interconnected to regional head-ends, where analog and
digital channel line-ups are assembled for distribution to customers
and Internet traffic is aggregated and routed to and from custom-
ers, by inter-city fibre-optic rings. The fibre-optic interconnections
allow its multiple Ontario and New Brunswick cable systems to
function as a single cable network. Cable’s remaining subscribers
2008 CABLE REVENUE MIX
(%)
Core Cable 44% Internet 18%
Home Phone 13%
Retail 11%
Business Solutions 14%