Cogeco 2003 Annual Report Download - page 18

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Trois-Rivières
Montréal
Laval
Sherbrooke
Danville
Magog
Drummondville
Shawinigan
Grand-Mère
Québec City
Sainte-Adèle
Saint-Jovite
Mont-Tremblant
Sainte-Agathe
Saint-Jérôme
Saint-Georges
Valcourt
Saint-Alexis-des-Monts
Notre-Dame-du-Bon-Conseil
Nicolet
Saint-
Hyacinthe Disraeli
Acton
Vale
Sept-Îles
Montmagny
Rimouski
Mont-Joli Sayabec
Causapscal
Campbellton
Matane
Gaspé
Chandler
Newport
Bonaventure
Port-Cartier
Baie-Comeau
Roberval
Alma Chicoutimi
TO ONTARIO
TO ONTARIO
Saint-Martin
Saint-Barthélémy
Valleyfield
Amqui
Forestville
ST. LAWRENCE RIVER
QUÉBEC
Legend
Actual Fiber
City Served
Point of Presence
Tring
Jonction
Thetford
Mines
Plessisville
Saint-Pierre-les-Becquets
Saint-
Léonard
MANAGEMENT’S DISCUSSION AND ANALYSIS
In coming years, capital expenditures and subsidies
related to customer premise equipment are expected to decrease
as unit prices should continue to decline and as such devices will
be increasingly integrated in Consumer Electronics products like
PCs, television sets and DVDs. Numerous technology changes and
improvements will also contribute to reduce capital expenditures
in general and systems rebuilds in particular. Improvements in
compression and multiplexing techniques will allow for more and
more video signals to be transmitted in a given bandwidth with
no signal degradation. Increased bandwidth needs generated by
growth in narrowcast digital services such as Internet and VOD
will be accommodated through further cost efficient node splitting.
The migration to DOCSIS 1.1 and eventually to DOCSIS 2.0
will allow for the use of more efficient modulation techniques.
Most importantly, the gradual migration of cable systems to all-
digital networks will significantly increase the capacity of systems.
Therefore, systems upgrades will consume relatively less capital
and will increasingly be undertaken to further improve reliability
and quality of services offered rather than for capacity expansion.
Increase in deferred charges declined to $15.9 million
in fiscal 2003 compared to $28.0 million in fiscal 2002. The
breakdown of the increase is presented in the table above.
16 Cogeco Cable Inc. 2003
Years ended August 31, 2004 Guidelines(1) 2003 2002
Increase in Deferred Charges
Equipment subsidies and advertising costs $10,000 $14,491 $20,292
Financing costs ——4,688
New services launch costs and others —1,445 3,049
Total Increase in Deferred Charges $10,000 $15,936 $28,029
(in thousands of dollars)
Québec
Inter-City Fiber Deployment Optic Cable Network: 3,600 km
Optic Fiber: 43,900 km
(1) See “Fiscal 2004 Financial Guidelines” section for further discussion.