Shaw 2013 Annual Report Download - page 11

S
haw
C
ommunications Inc
.
MANA
G
EMENT’
S
DI
SCUSS
I
O
N AND ANALY
S
I
S
August
31
,
2013
The descr
ip
t
i
on o
f
these o
p
erat
i
n
g
bus
i
ness se
g
ments,
i
nclud
i
n
g
more s
p
ec
ifi
c deta
i
ls
f
or the
last two fiscal years follows
.
B. Descr
ip
t
i
on o
f
the bus
i
nes
s
(i) C
abl
e
Shaw’s Cable operations provide Cable television, Internet, and Digital Phone services t
o
residential and business customers. These services are delivered through an extensive fibr
e
op
t
i
c and co-ax
i
al cable d
i
str
i
but
i
on network
.
S
haw’s strate
gy i
s to levera
g
e
i
ts network b
yp
rov
i
d
i
n
g
add
i
t
i
onal serv
i
ces be
y
ond trad
i
t
i
onal
cable television. In past years, it enhanced the quality, depth and capacity of its plant an
d
n
etwork infrastructure through significant capital investments, and the plant and network is
essent
i
all
yf
ull
y
d
igi
tal and two-wa
y
ca
p
able. These
i
nvestments enabled
S
haw to ex
p
and
i
ts
serv
i
ce o
ff
er
i
ngs to
i
nclude d
i
g
i
tal programm
i
ng,
O
n Demand programm
i
ng, H
i
gh De
fi
n
i
t
i
o
n
(“HD”) television including three dimensional (“3D”) HD, Internet, and Digital Phone. Durin
g
2013 S
haw cont
i
nued a ma
j
or u
pg
rade o
fi
ts network to convert telev
i
s
i
on analo
g
t
i
ers to d
igi
ta
l
(
the D
i
g
i
tal Network Upgrade or
“
DNU”
)
.Th
i
s upgrade, wh
i
ch
i
s now substant
i
ally complete
,
significantly increases the capacity of the Shaw network and allows the Company to expand its
I
nternet, HD and
O
n Demand o
ff
er
i
n
g
s.
S
haw’s
i
nvestments
i
n
p
lant
i
n
f
rastructure w
i
ll
accommodate
f
urther growth opportun
i
t
i
es.
S
haw cont
i
nues to
i
nvest
i
n technology
i
n
i
t
i
at
i
ves t
o
recapture bandwidth and optimize its network, including increasing the number of nodes on the
n
etwork and us
i
n
g
advanced encod
i
n
g
and d
igi
tal com
p
ress
i
on technolo
gi
es such as MPE
G
-4
.
To take advanta
g
eo
fp
otent
i
al adm
i
n
i
strat
i
ve, o
p
erat
i
n
g
and market
i
n
g
s
y
ner
gi
es that ar
i
se
f
rom
larger,
f
ocused operat
i
ons,
S
haw has consol
i
dated
i
ts pos
i
t
i
on as the dom
i
nant prov
i
der o
f
cable
services in Western Canada. Approximately 70% of the Company’s cable television subscriber
s
are clustered
i
n and around
fi
ve ma
j
or urban markets
i
n Western
C
anada: Vancouver an
d
Vi
ctor
i
a, Br
i
t
i
sh
C
olumb
i
a;
C
algary and Edmonton, Alberta; and W
i
nn
i
peg, Man
i
toba. Th
e
balance of Shaw’s subscribers are mainly in smaller regional clusters, linked via fibre either t
o
each other or to lar
g
er markets. These markets
i
nclude the
O
kana
g
an re
gi
on, Br
i
t
i
sh
C
olumb
i
a
(
Kamloops, Kelowna, Pent
i
cton, Vernon
)
;
S
askatoon
/
Pr
i
nce Albert
/
Moose Jaw
/S
w
if
t
C
urrent
,
Saskatchewan; and Thunder Bay/Sault Ste. Marie, Ontario
.
D
uring 2013, Shaw completed the disposition of Mountain Cablevision Limited (“Mountai
n
C
able”
)
, a cable s
y
stem located
i
n Ham
i
lton,
O
ntar
i
o
.
S
haw has a customer-centr
i
c strate
gy
des
ig
ned to del
i
ver h
ig
h-
q
ual
i
t
y
customer serv
i
ce
,
simplicity and value to its customers through various bundled service offerings for its Cable
t
elevision, Internet and Digital Phone services. The benefits of bundling to customers include
t
he conven
i
ence o
f“
one-sto
p
sho
ppi
n
g
” and value
p
r
i
c
i
n
g
. The bene
fi
ts to
S
haw
i
nclude
retention of existing customers (churn reduction); attraction of new customers; incrementa
l
penetration as customers upgrade to additional services offered in a bundle; and operationa
l
e
ffi
c
i
enc
i
es throu
g
h central
i
zed b
i
ll
i
n
g
and customer care
.
A more deta
i
led descr
ip
t
i
on o
f
each o
f
the
p
r
i
nc
ip
al o
p
erat
i
ons com
p
r
i
s
i
n
g
the
C
om
p
an
y
’s
C
able
segment is set forth below.
Cab
l
e
T
e
l
e
vi
s
i
on
The
C
om
p
an
y
’s
i
n
i
t
i
al core bus
i
ness was cable telev
i
s
i
on serv
i
ces, wh
i
ch toda
yp
rov
i
des the
customer base and physical infrastructure for much of the Company’s distribution servic
e
7