Shaw 2011 Annual Report Download - page 6

Shaw Communications Inc.
REPORT TO SHAREHOLDERS
August 31, 2011
During the year we also continued to strengthen our capital structure and lower costs, taking
advantage of favorable market conditions. We issued $1.3 billion in debt and $300 million in
preferred equity using a portion of the proceeds to refinance higher cost debt assumed in the
Media acquisition.
OPERATIONAL PERFORMANCE
We continue to focus on the strength of our core business and make important investments in
new technology platforms, digital reclamation and broadband capacity in order to ensure we
maintain our technological leadership. During the year we commenced a major upgrade of our
network to convert television analog tiers to digital (the Digital Network Upgrade). This upgrade
is expected to triple the capacity of our network and allow expansion of our Internet, HD and On
Demand offerings. We know that our investment in infrastructure provides further differentiation
from our competition and we make capital and operating decisions ensuring that long-term
value and profitability is generated from the appropriate investments.
We are evolving our service offerings in-step with our customers, responding to their desire for
more choice, value and freedom to choose. In 2011 we launched the Shaw Plan Personalizer,
enabling customers to customize their core entertainment service needs and receive everyday
value. We also launched the Shaw Gateway television product, providing the next generation in
television viewing with advanced features and home networking capability, bringing together the
power of broadband and high-definition technology that will be the centre of a connected home.
During 2011, we initiated an extensive consultation process having our Internet customers
share their ideas on Internet usage allowances and billing. As a result of these consultations, we
launched new Internet packages with higher speeds and expanded usage allowances, including
an industry leading 250 Mbps service using DOCSIS 3.0 technology to meet the increasing data
needs of our subscribers. Currently, telecommunication competitors are unable to match our
broadband speeds and this provides a competitive advantage now and for the foreseeable
future.
Subscriber growth during the year was balanced against strong financial performance as the
competitive environment continued to increase across our operating areas.
ŠWe achieved Digital television customer growth of over 165,000. At the end of fiscal
2011 there were over 1.8 million Digital customers, representing almost 80% of Basic
customers. In 2011 we lost 51,000 Basic cable customers.
ŠDuring the year almost 55,000 Internet customers were added, maintaining one of the
strongest broadband businesses in North America. We continue to increase the
penetration rate of the service and now the equivalent of 82% of Basic subscribers take
the Internet service, which represents one of the highest penetration rates in North
America.
ŠThe Digital Phone product has been a great success and we have over 1,200,000 Digital
Phone lines since our first market launch in February 2005. Customer growth of 137,000
Digital Phone lines was achieved in fiscal 2011, with the equivalent of 54% of Basic
subscribers now taking the telephone service.
The broadcasting business acquisition included the Global Television Network (“Global”) and
over 20 Specialty services. The segment performed very well in 2011 benefitting from the
vendor operating under creditor protection and having undergone a restructuring process
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