Shaw 2010 Annual Report Download - page 56

associated with growth including marketing and sales activities as well as the impact of the LPIF
fees. The current twelve month period also included a one-time Part II fee recovery of $48.7 million.
Excluding the recovery, the annual improvement was 10.8%.
Shaw’s Digital Phone footprint has continued to expand with launches this year in various smaller
centres including Campbell River, Winfield, Kimberly and Fernie in British Columbia as well as in
Stoney Plain and expansions in the surrounding areas of Lethbridge, all in Alberta. The Digital
Phone service was launched in Calgary in February 2005 and since that time the footprint has
expanded to reach over 95% of Basic customers. During the current year Shaw achieved record
Digital Phone growth and also surpassed a significant milestone of 1,000,000 Digital Phone lines.
During the year Shaw launched its broadband VOD Player allowing customers to experience the
convenience of watching their favorite movies and television shows when and where they want.
Shaw also continued to grow its Digital customer base and Digital penetration of Basic at August 31,
2010 was 70.7%, up from 56.7% and 40.5% at August 31, 2009 and 2008, respectively. Shaw
now has over 725,000 HD capable customers.
The Company strives to offer leading edge products and services and is preparing for limited trials of
Gigabit Internet, a technology that is delivered over Fibre-to-the-Home and is 10x faster than
Shaw’s High-Speed Nitro service. High-Speed Nitro offers speeds of 100 Mbps per second and was
launched late in 2009. It is currently available in over 85% of the cable footprint.
2009 vs. 2008
OPERATING HIGHLIGHTS
kCable service revenue for the year of $2.63 billion was up 10.8% over 2008. Service
operating income before amortization of $1.27 billion increased 10.0%.
kOn an annual basis Basic subscribers were up 29,467 to 2,331,028.
kDigital customers increased 388,517 to 1,321,724. Shaw’s Digital penetration of Basic has
increased from 40.5% at August 31, 2008 to 56.7% at August 31, 2009.
kDuring 2009 Digital Phone lines increased 217,786 to 861,904 lines and Internet was up
109,283 to total 1,708,335 as at August 31, 2009. Internet penetration of Basic continues
to be one of the highest in North America and stood at 73.3% up from 69.5% at August 31,
2008.
kDuring 2009 Shaw closed the acquisition of the Campbell River cable system in British
Columbia. This acquisition is complementary to and provides synergies with existing
operations.
Cable service revenue for the year of $2.63 billion was up 10.8% over the prior year. Customer
growth and rate increases accounted for the improvement. Service operating income before
amortization of $1.27 billion increased 10.0%. The improvement was driven by revenue related
growth partially offset by higher employee costs and other expenses, including marketing, sales
activities, and equipment maintenance and support.
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 continued to enhance its HD offerings, with the most recent addition of AMC to the
HD channel line-up, and as at August 31, 2009 carried 56 HD channels, offered over 500 HD titles
through Shaw Video on Demand and HD PPV, and had over 500,000 HD capable cable customers.
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Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2010