Rogers 2013 Annual Report Download - page 45

MANAGEMENT’S DISCUSSION AND ANALYSIS
CABLE
ONE OF CANADA’S LARGEST PROVIDERS OF CABLE
TELEVISION, HIGH-SPEED INTERNET AND
PHONE SERVICES
• 2.1 million television subscribers – approximately 31.4%of
Canadian cable television subscribers
• 2.0 million high-speed Internet subscribers
• 1.2 million telephony subscribers
• a network that passes approximately 4 million homes in
Ontario, New Brunswick and Newfoundland.
PRODUCTS AND SERVICES
Our advanced digital two-way hybrid fibre-coaxial network provides a
leading and innovative selection of digital television and online viewing,
high-speed broadband Internet access, and cable telephony services:
• programming includes high-definition television (HDTV)
• on-demand, including movies, television series and events
• personal video recorders (PVRs) and Whole Home PVR
• time-shifted programming
• digital specialty, multicultural and sports programming
• Rogers Anyplace TV and Anyplace TV Home Edition for viewing on
smartphones, tablets and personal computers.
Cable Television generates service revenue from three areas:
• digital cable – includes digital channel service fees, including premium
and specialty service subscription fees, pay per view service fees and
video on demand service fees
• analog cable – includes basic cable service fees plus extended basic
(or tier) service fees and access fees for use of channel capacity by
third parties
• rental of digital cable set-top terminals.
Internet revenue includes monthly subscription and additional use
service revenues from residential, small business and wholesale Internet
access subscribers and modem rental fees.
Cable Telephony revenue includes revenues from residential and small
business local telephony service, calling features such as voicemail and
call waiting, and long-distance.
DISTRIBUTION
We distribute our cable products using various channels including:
• company-owned Rogers retail stores
• customer self-serve rogers.com, ecommerce sites
• Rogers call centres, outbound telemarketing, door-to-door agents
• major retail chains
• an extensive network of third party retail locations.
EXTENSIVE NETWORK
Rogers has an expansive fibre and hybrid fibre coaxial network
infrastructure that provides consumers, businesses and governments in
Ontario, New Brunswick and Newfoundland with a range of
communications services, including video, broadband Internet, voice
and data networking.
The network is structured to optimize performance and reliability and to
allow for the simultaneous delivery of video, voice and Internet over a
single platform. It is generally constructed in rings that interconnect
with distribution hubs, minimizing disruptions that can result from fibre
cuts and other events.
(%)
2013 CABLE SERVICE REVENUE MIX
TELEVISION 52%
INTERNET 33%
PHONE 15%
$.5
BILLION
3
The network is sub-divided into smaller clusters of homes
interconnected at a central node. The node is reached by fibre optic
cable and in turn from the node to the home, video, voice and
broadband services are delivered using 860 MHz of spectrum over
coaxial cable.
We continually upgrade the network to improve capacity, enhance
performance and introduce new features and functionality. For
example, we invest in:
• further segmenting our network nodes to reduce the number of
homes in each node
• improving video signal compression by moving to more advanced
video protocols
• improving channel and on-demand capacity by introducing new
technology like switched digital video
• increasing Internet speed with data over cable service interface
specifications (DOCSIS 3.0), which now offers speeds of up to
250 Mbps, setting the foundation for even higher speeds
• increasing the fibre to the home (FTTH) footprint by connecting to
more homes directly to fibre.
In 2012, we began transitioning customers still receiving television
signals over our analog broadcast channels to all-digital services, freeing
up significant cable network capacity for additional features and
services. The analog to digital subscriber migration will continue to
strengthen the customer experience and, once complete (expected in
2015), will allow us to reclaim significant amounts of network capacity
and reduce network operating and maintenance costs. The migration
from analog to digital requires additional spending because it involves
fitting analog homes with digital converters and removing existing
analog filtering equipment.
Broadband Internet service is provided using the DOCSIS 3.0 standard
which combines multiple RF channels onto one access into the
customer premise, delivering exceptional performance. The bandwidth
of our internet service offerings has increased 50 fold in the last
10 years as we bring new technology to market when it becomes
available. This track record of investing in our networks and
demonstrating the capability to deploy best in class service is one of our
key strategies to ensure we stay competitive with other service providers
that provide internet service into homes and business over copper
facilities.
2013 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 41