Cogeco 2009 Annual Report Download - page 43

42 COGECO CABLE INC. 2009 Management’s discussion and analysis
2009 VS 2008 FOURTH QUARTER OPERATING RESULTS
CUSTOMER STATISTICS
NET ADDITIONS (LOSSES)
AUGUST 31, 2009 QUARTER ENDED AUGUST 31, 2009
CANADA EUROPE CONSOLIDATED CANADA EUROPE CONSOLIDATED
RGU(1) 2,159,863 732,375 2,892,238 27,740 20,430 48,170
BASIC CABLE SERVICE CUSTOMERS 864,805 259,480 1,124,285 (924) (5,318) (6,242)
HSI SERVICE CUSTOMERS 515,052 143,614 658,666 5,619 1,430 7,049
DIGITAL TELEVISION SERVICE CUSTOMERS(1) 498,398 102,753 601,151 9,674 23,456 33,130
TELEPHONY SERVICE CUSTOMERS 281,608 226,528 508,136 13,371 862 14,233
NET ADDITIONS (LOSSES)
AUGUST 31, 2008 QUARTER ENDED AUGUST 31, 2008
CANADA EUROPE CONSOLIDATED CANADA EUROPE CONSOLIDATED
RGU 1,991,908 724,966 2,716,874 42,909 (1,809) 41,100
BASIC CABLE SERVICE CUSTOMERS 857,094 296,135 1,153,229 (1,476) (4,456) (5,932)
HSI SERVICE CUSTOMERS 473,467 159,301 632,768 8,799 (5,009) 3,790
DIGITAL TELEVISION SERVICE CUSTOMERS(2) 441,746 24,452 466,198 16,150 9,982 26,132
TELEPHONY SERVICE CUSTOMERS 219,601 245,078 464,679 19,436 (2,326) 17,110
(1) THE NUMBER OF DIGITAL TELEVISION SERVICE CUSTOMERS IN EUROPE HAS BEEN RESTATED IN THE FOURTH QUARTER OF FISCAL 2009 IN ORDER TO CONFORM TO
THE INDUSTRY DEFINITION OF A RGU. THIS RESTATEMENT INCREASED THE NUMBER OF CUSTOMERS AT THE END OF THE SECOND QUARTER BY 34,785 AND AT THE
END OF THE THIRD QUARTER BY 33,869.
(2) IN THE EUROPEAN OPERATIONS, THE DIGITAL TELEVISION SERVICE WAS LAUNCHED IN THE THIRD QUARTER OF FISCAL 2008.
In Canada, fourth-quarter 2009 RGU net additions were lower than for the same periods last year and reflect an early sign of
maturation in some services. The number of net losses for Basic Cable stood at 924 customers compared to 1,476 customers for
the same period of the prior year. Fourth-quarter Basic Cable service customer losses are usual and due to seasonal variations. In
the quarter, Telephony customers grew by 13,371 compared to 19,436 in the prior year. The lower growth is mostly attributable to
the increased penetration in areas where the service is already offered and to fewer new areas where the service was launched.
The number of net additions to HSI service stood at 5,619 customers compared to 8,799 in the fourth quarter of fiscal 2008. The
growth in HSI customer net additions continues to stem from the enhancement of the product offering, the impact of the bundled
offer (Cogeco Complete Connection) of Cable Television, HSI and Telephony services, and promotional activities. The Digital
Television service net additions stood at 9,674 customers compared to 16,150 customers in the prior year, due to more targeted
marketing initiatives in the second half of fiscal 2008 to improve penetration and to the continuing strong interest for the HD
Television service.
In Europe, 2009 fourth-quarter was marked by a continuing difficult competitive environment in the Iberian Peninsula, intense
promotions and advertising initiatives from competitors for their new respective third leg of the triple-play service in the Portuguese
market. These factors were the main contributors to net customer losses in the Basic Cable service, and low customer additions in
the HSI and Telephony services. The Digital Television service was launched during the third quarter of 2008, with net additions of
23,456 customers in the fourth quarter of fiscal 2009, compared to 9,982 in the fourth quarter of fiscal 2008. Fiscal 2009 fourth
quarter Basic Cable service customers decreased by 5,318 customers compared to a decrease of 4,456 customers in the
comparable period of the prior year. HSI service customers increased by 1,430 customers compared to a decrease of 5,009
customers for the corresponding period in fiscal 2008. Telephony service increased by 862 customers compared to a decrease of
2,326 customers for the same period of the preceding year. Cabovisão has launched new channels and retention strategies, as well
as new marketing and other operating initiatives which should reduce customer attrition in the upcoming quarters.