iesy Repository GmbH - Irish Stock Exchange

future. See “Risk Factors—Risks Relating to Our Business—Customer churn, or the threat of customer churn, may adversely
affect our business.”
Under ish’s existing customer care and billing systems, ish tracks the number of customer contracts that are added and
terminated. These numbers include, among other factors, contract renewals and terminations attributable to churn (which is
the number of subscribers that disconnect from ish’s network and irrespective of whether or not such customers reconnect
under a new contract). Churn is caused by a number of factors, the principal factor being house moves, as well as competition
and pricing. See “Risk Factors—Risks Relating to Our Business—We operate in competitive industries, and competitive
pressures could have a material adverse effect on our business” and “Business—Competition.”
Although ish’s ability to reduce its customer churn rate is limited by certain factors, such as customers moving outside
ish’s network service area, managing its customer churn rate is a significant component of ish’s business plan. To help meet
these objectives, ish intends to continue to improve upon its historic record of customer care, improve and introduce new
product offerings and enhance its direct contact with customers.
ARPU
ARPU (average revenues per unit) is a measure ish uses to evaluate how effectively ish is realizing potential revenues
from customers. ARPU is generally calculated on a yearly, quarterly or monthly basis by dividing total sales generated from
the provision of services by the average number of subscribers served in that period and by the number of months in the
period.
The basic cable ARPU for the three months ended March 31, 2005 was €7.21 and for the year ended December 31,
2004 was €7.36. Detailed below is ARPU for the three months ended March 31, 2004 and 2005 and for the years ended
December 31, 2003 and 2004 based on segments:
As of and for the twelve months ended
As of and for the three months
December 31,
ended March 31,
2003 2004 2004 2005
Subscriber segment
Basic cable television (1) 7.52 7.36 7.13 7.21
Adjusted basic cable television (2) 7.39 — 7.36 —
Premium cable television (3) 6.20 8.02 5.60 7.29
High speed Internet (4) 37.75 33.07 38.22 28.97
Telephony (5) 25.11 25.11 25.75 26.62
(1) Calculated by dividing basic cable television subscription revenues (including installation fees, but excluding carriage
fees) for a period by the average number of basic cable subscribers for that period and the number of months in that
period. ish’s basic cable ARPU number for the 12 months ended December 31, 2003 does not include approximately
135,000 Tele Columbus subscribers, which were added to ish’s subscriber number in 2004, when its contract with Tele
Columbus was renegotiated.
(2) ish’s basic cable ARPU number for the 12 months ended December 31, 2003 adjusted to include approximately
135,000 Tele Columbus subscribers, which were added to ish’s subscriber number in 2004, when its contract with Tele
Columbus was renegotiated.
(3) Calculated by dividing its premium cable television subscription revenues (including installation fees, but excluding
carriage fees) for a period by the average number of its premium cable television subscribers for that period and the
number of months in that period.
(4) Calculated by dividing high speed Internet subscription revenues (including installation fees) for a period by the
average number of high speed Internet subscribers for that period and the number of months in that period.
(5) Calculated by dividing telephony subscription revenues for a period by the average number of telephony subscribers
for that period and the number of months in that period.
ish’s basic cable subscriber ARPU increased by 1.1%, from €7.13 in the three months ended March 31, 2004 to €7.21
per subscriber in the three months ended March 31, 2005. This increase reflects an improvement in the mix of subscribers.
ish’s basic cable subscriber ARPU decreased by 2.2%, from €7.52 per subscriber in the year ended December 31, 2003
to €7.36 in the year ended December 31, 2004. ish believes this mainly reflects a change in the way that 135,000 subscribers
are counted pursuant to ish’s agreement with Tele Columbus (i.e. more subscribers are recognized, but there has been no
change in the amount paid to ish by the strategic accounts customer).
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(€)