Shaw 2011 Annual Report Download - page 59

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Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2011
2010 vs. 2009
OPERATING HIGHLIGHTS
ŠShaw’s Digital subscriber base continued to grow adding 328,841 new customers.
ŠDigital Phone lines increased 234,402 during 2010 to 1,096,306 lines and Internet was
up 110,012 to total 1,818,347 as at August 31, 2010. Basic cable subscribers were up
2,410.
ŠDuring 2010 the Company completed the acquisition of Mountain Cablevision operating
in Hamilton, Ontario adding approximately 41,000 Basic cable customers, including
24,000 Digital subscribers, 30,000 Internet subscribers, and 32,000 Digital Phone
lines.
Cable revenue improved 11.3% to $2.93 billion over 2009. Customer growth, including
acquisitions, and rate increases accounted for the improvement. Operating income before
amortization of $1.45 billion increased 14.6%. The increase was mainly due to the revenue
driven improvements, partially offset by higher employee related and other costs associated
with growth including marketing and sales activities as well as the impact of the LPIF fees. A
one-time Part II fee recovery of $48.7 million in 2010 also contributed to the increase.
Excluding the recovery, the annual improvement was 10.8%.
Shaw’s Digital Phone footprint continued to expand with launches during 2010 in various
smaller centres including Campbell River, Winfield, Kimberly and Fernie, all in British
Columbia as well as in Stoney Plain and 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 2010 Shaw achieved
record Digital Phone growth and also surpassed a significant milestone of 1,000,000 Digital
Phone lines.
During 2010 Shaw also 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 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.
The Company strives to offer leading edge products and services and during 2010 prepared for
limited trials of Gigabit Internet, a technology that is delivered over FTTP and is significantly
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 was available in over 85% of the cable footprint.
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