Tucows 2015 Annual Report Download - page 99

Network Access Services
Ting
Net revenues from Ting mobile phone services and equipment for Fiscal 2014, as compared to Fiscal 2013,
increased by $19.4 million or 117% to $35.9 million. This increase primarily reflects the impact the larger subscriber base
is having on service revenues. As of December 31, 2014, Ting had 94,000 subscribers and 147,000 mobile devices under
its management compared to 48,000 subscribers and 74,000 devices under management as of December 31, 2013.
Domain Services
Wholesale
During Fiscal 2014, domain services revenue decreased by $0.7 million to $86.6 million and the number of
transactions from all new, renewed and transferred-in domain name registrations that we processed remained relatively
flat at 9.1 million when compared to Fiscal 2013. Domain services revenue and transaction volumes continue to be
impacted by the ongoing migration of a few large, low margin customers. These customers have been moving their
domain management and domain transaction processing to their own accreditations and in-house systems. We
anticipate that the number of new, renewed and transferred-in domain name registrations will continue to be impacted
by decisions large volume customers make with regard to acquiring their own accreditations and the impact that the
significant expansion of the number of New gTLDs implementation of ICANN’s New gTLD Program will have on the
market. While we anticipate that the number of new, renewed and transferred-in domain name registrations will
continue to incrementally increase in the long term, the volatility of these factors could affect the growth of domain
names that we manage. As of December 31, 2014, total domains that we manage under our own accreditation
decreased to 10.2 million when compared to 10.6 million at December 31, 2013. This decrease in domains under
management primarily resulted from the same factors impacting domain transactions mentioned above. Also, as of
December 31, 2014, total domains that we manage on behalf of other accredited registrars who use our technical
systems to process domain registrations with their own accreditation, decreased to 3.3 million when compared to 3.6
million at the end of December 31, 2013, primarily the result of a single customer that transitioned their domain
management platform to an in-house system earlier this year.
Value-Added Services decreased by $0.6 million to $9.7 million when compared to Fiscal 2013. This decrease
was largely due to the $0.7 million decrease in revenue from pay-per-click advertising and the sale of names through the
OpenSRS Domain Expiry Stream. The revenue associated with names sales and advertising has recently experienced flat
to declining trends due to the uncertainty around the implementation of ICANN’s New gTLD Program, lower traffic and
advertising yields in the marketplace, which we expect to continue.
Retail
Net revenues from Retail for Fiscal 2014, as compared to Fiscal 2013, increased by $2.1 million to $10.4 million.
This increase was largely due to the success that our retail marketing initiatives and improved websites are having on our
ability to attract new customers and retain existing ones for Hover.
Portfolio
Net revenues from Portfolio for Fiscal 2014, as compared to Fiscal 2013, decreased by $2.4 million to
$5.1 million from $7.5 million. This decrease was primarily related to gains we recognized from our withdrawal of our
applications for .media and .marketing during the three months ended September 30, 2013 compared to the gains we
recognized from participating in a confidential private auction for .group in July 2014. The market for monetization of
domain names is rapidly evolving and is being impacted by uncertainty around the implementation of ICANN’s New
gTLD Program. In addition, Portfolio revenues were impacted by lower sales of big ticket domains as well as the impact
the uncertainty around the implementation of ICANN’s new gTLD Program is having on our pay-per-click advertising
traffic.
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