Tucows 2012 Annual Report Download - page 50

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45
The following table presents our cost of revenues, as a percentage of total cost of revenues for the periods
presented:
Year ended December 31,
2011 2010
Wholesale
Domain Services 86 % 85%
Value Added Services 3 % 3%
Total Wholesale 89 % 88%
Retail 2 % 2%
Portfolio 1 % 1%
N
etwork, other costs 7 % 7%
N
etwork, depreciation and amortization costs 1 % 2%
100 % 100%
Total cost of revenues for Fiscal 2011 increased by $9.3 million, or 14%, to $73.8 million from $64.5 million in
Fiscal 2010 primarily the result of increased sales volumes. Prepaid domain registration and other Internet services fees
as of December 31, 2011 increased by $6.0 million, or 12%, to $55.8 million from $49.8 million at December 31, 2010.
Wholesale
Costs for Wholesale for Fiscal 2011 increased by $9.4 million, or 17%, to $65.5 million, when compared to
Fiscal 2010.
This increase was primarily the result of increased domain registration volumes that were experienced during
Fiscal 2011 when compared to Fiscal 2010 and increases in registration fees paid to the registries that were implemented
in July 2010.
Retail
Costs for Hover for Fiscal 2011 as compared to Fiscal 2010 increased by $0.4 million, or 23%, to $1.9 million,
and primarily reflect our success in attracting new customers and retaining existing ones.
Portfolio
Costs for Portfolio decreased by $0.1 million to $0.8 million, when compared to Fiscal 2010.
Network costs
Network costs before depreciation and amortization for Fiscal 2011 increased by $0.2 million, or 4%, to
$4.8 million, primarily as a result of increased workforce costs. Network costs were also negatively impacted by the
approximately 5% strengthening, on average, in the Canadian dollar relative to the U.S. dollar compared to Fiscal 2010
which reflects our improved efficiency in operating and managing our co-location facilities.
Amortization of intangible assets consists of amounts arising in connection with the acquisition of technology
from each of the Boardtown Corporation in April 2004, Mailbank.com Inc. in June 2006, IYD in July 2007 and EPAG in
August 2011.