Shaw 2009 Annual Report Download - page 47

Shaw is committed to capital investment driving business growth and improvements, including
implementation of new technologies to provide customers with choice and leading edge products.
The Company continues to enhance its HD offerings, with the most recent addition of AMC to the
HD channel line-up, and carries 56 HD channels and offers over 500 HD titles through Shaw Video
on Demand and HD PPV. It now has over 500,000 HD capable cable customers.
The Digital Phone footprint grew during the year with launches in various markets including Prince
George, British Columbia and its surrounding areas, as well as expansions in the surrounding areas
of Red Deer, Lethbridge, and Edmonton, all in Alberta. As at August 31, 2009 the Digital Phone
service was available to 94% of Basic customers and over 38% were taking the service.
Internet speed increases of 50 per cent were implemented during the year as well as a new 100
Mbps service, High-Speed Nitro, using DOCSIS 3.0 technology. As of August 31, 2009 the new
100 Mbps service was available in Saskatoon, Victoria and Winnipeg. Recently the service was
launched in Vancouver, Calgary and Edmonton. Internet penetration of Basic continues to be one of
the highest in North America and now stands at 73.3% up from 69.4% at August 31, 2008.
Late in fiscal 2008 the Company participated in the Canadian Advanced Wireless Spectrum
(“AWS”) auction and was successful in acquiring 20 megahertz of spectrum across most of its cable
footprint for a cost of $190.9 million. In early September 2009 the Company received its ownership
compliance decision from Industry Canada and was granted its AWS licenses.
2008 vs. 2007
OPERATING HIGHLIGHTS
kDuring 2008 the Company added 226,574 Digital Phone lines and as at August 31, 2008
had 611,931 lines. Digital Phone line penetration was at over 30% of Basic customers who
have the service available to them.
kDigital customers increased during 2008 by 143,180 to 909,167. Basic cable subscribers
grew by 21,279 to 2,260,433.
kShaw added 114,206 Internet customers to total 1,569,052 as at August 31, 2008. Internet
penetration of Basic stood at 69.4% up from 65.0% at August 31, 2007.
Cable service revenue of $2.38 billion was up 14.1% over 2007. Customer growth and rate
increases accounted for the increase. Service operating income before amortization of $1.15 billion
improved 15.8% over the comparable period. The increase was driven by revenue related growth
and Digital Phone margin improvement, partially offset by higher employee related costs and other
expenses related to business growth, including equipment maintenance and support.
Digital Phone continued to grow rapidly. The Company added 226,574 Digital Phone lines during
2008 and since the initial market launch in February 2005 has added over 610,000 lines. As at
August 31, 2008 Digital Phone was available to over 90% of Basic customers and over 30% had
taken the service. In 2008 the Company introduced Shaw Digital Phone Basic, an offering for
customers requiring limited phone features. The service includes a local phone line, Caller ID, and
long distance at competitive rates. Shaw offers a variety of tiered phone services appealing to
various customer demographics.
During 2007 Shaw invested in new systems allowing it to operate independently as a CLEC using its
own back office infrastructure. Shaw launched these systems late in 2007 and during 2008 gained
cost efficiencies as these were fully rolled out. This enabled the Company to provide better
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Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2009