Cogeco 2009 Annual Report Download - page 10

Management’s discussion and analysis COGECO CABLE INC. 2009 9
Cogeco Cable currently acquires DOCSIS 2.0 & DOCSIS 3.0 equipment. The Corporation uses DOCSIS 1.1, DOCSIS 2.0 and
DOCSIS 3.0 standards within its IP platform. The DOCSIS standard includes numerous features including the prioritization of
packets to ensure a continuous transmission and quality. This prioritization is important for services that need to be transmitted in
real time, such as those of the telephony service. In addition, when required, DOCSIS 2.0 and DOCSIS 3.0 features can be
activated to achieve increased speed and capacity in the return path by using advanced modulation or features that can allow the
use of portions of the spectrum that are otherwise not usable. This gives the Corporation a flexible and expandable platform for
providing other products like symmetrical services, which are particularly well suited for commercial customer applications. The new
standard, DOCSIS 3.0, while still compatible with the earlier versions, makes it possible to further increase IP transmission speeds
up to 160 Mbps and beyond. The Corporation is in the process of a gradual deployment of DOCSIS 3.0 head-end and customer
premise equipment.
The Corporation has implemented an infrastructure with 550 MHz and 750 MHz capacity, depending on the cable system and
customer needs. The infrastructure with 550 MHz capacity allows for the transmission of up to 80 analogue channels, and the
750 MHz infrastructure allows for the transmission of up to 110 analogue channels. For reference purposes, each analogue channel
(representing 6 MHz of bandwidth), with the current compression, multiplexing and modulation technologies used by the Corporation
allows for the transmission of up to 13 standard definition digital television signals, or of up to 3 HD signals.
Cogeco Cable is currently testing the Switched Digital Video (“SDV”) technology in a limited sample system in the province of
Ontario in order to assess the applicability of this technology to its network. If successful, these trials are expected to lead to further
deployment of this technology in the coming years. The SDV technology allows the Corporation to selectively broadcast the digital
television channels that are currently being viewed by customers, effectively allowing the Corporation to offer a greater selection of
digital channels, and is used particularly for low viewership content and channels.
Cogeco Cable is also in the process of assessing the applicability of the Digital Terminal Adaptor (“DTA”) technology, which is
currently in early field trials. If field trials provide conclusive evidence and subsequent business models demonstrate viability,
deployment of this technology could begin in the next few years. DTA technology converts Digital Television signals to Analogue
signals in the viewer’s home through a device installed on the television set. Deployment of this technology would allow for a
broader use of Digital Television service and for the further conversion of analogue channel capacity.
PORTUGAL
Cabovisão provides its cable services through state-of-the-art 750 MHz broadband distribution networks. Cabovisão fully owns its
distribution networks, head-ends and drops. Digital Television service has been launched during the second quarter of fiscal 2008
and all existing analogue set-tops have been replaced by digital set-tops. VOD service is not currently offered but is planned for
launch in the near future. HSI service using fully certified DOCSIS 1.0 technology is offered to 100% of homes passed and served
by a two-way cable plant. DOCSIS 3.0 has been deployed in all major centres and expansion to all homes continues in fiscal 2010.
Telephony service is also offered to 100% of homes passed, initially through the use of proprietary network interface units (“NIU”),
and, since 2004, with standard based electronic multimedia terminal adapters (“e-MTA”). Cabovisão currently uses class-5 circuit
switches and class-5 advanced softswitches. Cabovisão’s intercity fibre optic network extends over 3,414 kilometres and includes
approximately 232,000 kilometres of optical fibre. Cabovisão has deployed optical fibre to nodes serving clusters of typically
1,200 homes passed, with many fibres per node in most cases, which allows Cabovisão to further extend the fibre plant to smaller
clusters of 500 homes rapidly with relative ease if and when necessary. Node splitting leads to further improvement in the quality
and reliability of the network and services and allows for increasing traffic of two-way services, such as HSI and Telephony.
In Portugal and in most of Europe, PAL B and PAL G television standards are used and each analogue channel requires 7 MHz
(PAL B is used up to 300MHz) and 8 MHz (PAL G is used above 300 MHz) of bandwidth compared to 6 MHz in North America,
which uses the NTSC standards. An infrastructure with 750 MHz capacity in Portugal allows for the transmission of up to 83
analogue channels. For reference purposes, each analogue channel (representing 7 or 8 MHz of bandwidth), with the current
compression, multiplexing and modulation technologies used by Cabovisão, allows for the transmission of up to 13 standard
definition digital television signals, or of up to 6 HD signals.
KEY PERFORMANCE INDICATORS
Cogeco Cable is dedicated to increasing shareholder value and consequently focuses on optimizing profitability while efficiently
managing its use of capital without jeopardizing future growth. The following key performance indicators are closely monitored to
ensure that business strategies and objectives are closely aligned with shareholder value creation. The key performance indicators
are not measurements in accordance with Canadian GAAP and should not be considered an alternative to other measures of
performance in accordance with GAAP. The Corporation’s method of calculating key performance indicators may differ from other
companies and, accordingly, these key performance indicators may not be comparable to similar measures presented by other
companies.