Juno 2014 Annual Report Download - page 50

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Table of Contents
Communications Segment Results
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The increase in Communications revenues consisted primarily of a $2.7 million increase in products revenues driven by the sale of mobile broadband
devices from higher signups and lower discounting on devices. The increase in Communications services revenues was due to an $11.3 million increase in
mobile broadband services revenues driven by the increase in the number of mobile broadband subscribers, largely offset by a $10.7 million decrease in dial-
up and DSL services revenues. The increase in ARPU was due to a higher percentage of mobile broadband subscribers, which have higher ARPUs, as well as
an increase in mobile broadband ARPU. The decrease in advertising revenues was due to a decline in active accounts, partially offset by an increase in
advertising revenues due to higher advertising rates.

The increase in Communications cost of revenues was primarily due to a $9.7 million increase in costs associated with our mobile broadband service due
to increased mobile broadband subscribers. The increase was partially offset by a $1.8 million decrease in costs associated with our DSL service due to a
decrease in the number of DSL subscribers, as well as a $0.7 million decrease in telecommunications costs and a $0.6 million decrease in customer support
and billing-related costs due to a decrease in the number of dial-up Internet access pay accounts. In addition, costs associated with our email and Internet
security services decreased by $0.4 million. Included in the cost associated with our mobile broadband services was a provision for excess inventory and
obsolescence, as well as a markdown of mobile broadband service inventory-related balances totaling $1.1 million.
49
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 
 
 

 
Services $ 68,727 $ 68,599 $ 128 —%
Products 6,254 3,537 2,717 77%
Advertising 28,184 28,722 (538) (2)%
Total Communications revenues $ 103,165 $ 100,858 $ 2,307 2%
ARPU $ 10.85 $ 9.37 $ 1.48 16%
Average number of dial-up Internet access pay accounts 235 307 (72) 23%
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 
 
 

 
Communications cost of revenues $ 40,412 $ 33,865 $ 6,547 19%
Communications cost of revenues as a percentage of Communications revenues 39.2% 33.6%