Canadian Radio-television and Telecommunications Commission
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CRTC Communications Monitoring Report

2010

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Acknowledgements

The Commission wishes to thank all the entities that completed the CRTC Data Collection forms, without which this report would not have been possible. The Commission would also like to acknowledge the assistance provided by (1) Industry Canada in the analysis of broadband deployment as it related to the rural communities in Canada; (2) Statistics Canada for the various supplementary data used in this report; (3) BBM Canada and BBM Nielsen Media Research for audience measures; (4) BBM Analytics for Media Technology Monitor (MTM) syndicated reports; (5) comScore, for assistance with the MyMetrix data; and (6) Mediastats.

Interested parties are welcome to provide comments for improvements or additions to future editions of the report. You can send your comments to the attention of the Secretary General, CRTC, Ottawa, K1A 0N2.

Executive summary

Broadband and broadband-related services continue to have a strong impact on communications revenues. This report provides greater details than previous reports on broadband availability and subscriptions. Approximately 95% of Canadian households can access broadband services using landline facilities. Satellite facilities extend this reach to virtually all households and are only limited by capacity constraints. On a provincial basis, landline broadband Internet service is available to all households in 3 provinces, New Brunswick, Nova Scotia, and Prince Edward Island. For the remaining provinces landline broadband Internet service is available to at least 92% of the households, except Newfoundland which is at 78%. With respect to mobile, approximately 96% of Canadians can also access broadband services using handheld mobile devices.

Communications service revenue growth

Canadian communications service revenues increased from $54.3 billion in 2008 to $55.4 billion in 2009, or by 2.1%. The growth was driven by the 3.0% growth in broadcasting revenues and 1.8% growth in telecommunications revenues.

Broadcasting

Broadcasting revenues increased from $14.0 billion in 2008 to $14.4 billion in 2009. The increase was due to the 7.4% growth in BDU revenues, which increased from $6.9 billion to $7.5 billion, and the 6.0% growth in Pay, PPV, VOD and specialty services. These increases were partially offset by the 7.4% and 5.2% decline in conventional television, including the CBC, and radio advertising revenues respectively.

Telecommunications

Telecommunications service revenues increased from $40.3 billion in 2008 to $41.0 billion in 2009, or by 1.8%. The increase was due to newer, or non-legacy data services, and broadband Internet and wireless services. Non-legacy revenues increased from $1.4 billion to $1.5 billion, or by 12.2%. Internet service revenues increased from $6.2 billion to $6.6 billion, or by 6.3%. Wireless revenues increased from $16.0 billion to $16.9 billion, or by 5.3%. These increases were partially offset by the declines in long distance revenues, which decreased from $4.2 billion to $3.9 billion, a 7.1% decrease; legacy data and private line revenues, which decreased from $3.0 billion to $2.8 billion, a 7.3% decrease; and local and access revenues, which decreased from $9.6 billion to $9.4 billion, a 1.9% decline.

The communications industry

In 2009, approximately 34% of residential customers subscribed to service bundles that consisted of local telephone service and one or more of the following services: Internet access, video, and mobile. Approximately 92% of telecommunications revenues were from TSPs operating in all of the telecommunications market sectors: local telephone, long distance, Internet, data and private line, and wireless. Sixty-seven percent of cable companies’ revenues were from telecommunications services. Similarly, broadcasting service revenues represented approximately 6% of the incumbent telephone companies’ revenues.

Convergence in the communications industry changes the competitive landscape in Canada as companies enter each others’ non-traditional markets (see figure 3.1.8).

Competition

The alternative TSPs’ share of total wireline telecommunications revenues continued to increase and reached 37% in 2009. The alternative TSPs’ market share included the incumbent telephone companies' activities operating outside their traditional territories (8%), other facilities-based TSPs such as cable companies and hydro utility companies with telecommunications activities (23%), and resellers (6%).

The large cable companies were major providers of high-speed Internet service, as they had approximately 56% of high-speed residential Internet subscribers in 2009. In 2005, these companies started to provide local telephone service generally over a managed IP network, and by year-end 2009, they captured approximately 27% of local residential lines to become major competitors of the incumbent telephone companies in residential markets.

The competitors of the incumbent telephone companies, which include incumbent telephone companies operating outside their traditional territories, maintained their share of telecommunications revenues. Competitors, essentially cable BDUs, had strong growth in their number of residential local lines, which increased by 12.5%. In the local business market, competitor lines increased by 4.8%.

Broadcasting

Radio

There were 1,221 radio and audio services in Canada in 2009, of which 41 were digital. Seventy-five percent of the radio and audio services were broadcast to English-language Canadians, 22% to French-language Canadians, and the remaining 3% to third-language Canadians.

National average weekly hours tuned per capita decreased 3.2% from 18.3 hours in 2008 to 17.7 hours in 2009. On a per-listener basis, average weekly hours tuned declined from 20.0 hours per listener to 19.5 hours, a 2.5% decline.

Television

Overall viewing of Canadian programs on Canadian English-language services decreased 2% from 2008 to 74% in 2009, while viewing of Canadian programs on French-language services remained relatively unchanged at 99%. While drama and comedy programs continued to be the most popular genre, it is predominantly of non-Canadian content. In 2009, 79% and 68% of English- and French-language language drama and comedy programs were non-Canadian, respectively.

BDUs

In 2009, approximately 11.3 million or 90% of Canadian households subscribed to a BDU for television service, an increase of 2.2% over the previous year. Of those subscribing to BDUs, 25% subscribed to either DTH or MDS BDU. The top four cable BDUs and the two DTH providers captured 89% of all BDU subscribers in 2009.

BDU programming revenues per subscriber per month1 increased by $2.78, or 5%, to $56.14 in 2009.

New media broadcasting

A growing number of Anglophone and Francophone Canadians used the Internet to watch video programming (52% and 44%, respectively, in 2009). More Canadians are watching television programming online. Of those viewing online TV, anglophones spend 2.2 hours per week and francophones spend 1.3 hours per week in such activity.

Anglophones, that stream online radio, then to do less streaming than their francophone counterparts. The anglophones spend 4.1 hours per week streaming AM/FM radio compared to 4.6 hours for francophones.

Telecommunications

The number of mobile phone subscribers increased 8% in 2009 from the previous year. As well, Canadians continued to embrace technologies including broadband access to the Internet as the number of residential subscribers to high-speed Internet services increased by 6%. In 2009, approximately 62% of Canadian households had broadband Internet service and 72% had high-speed Internet service.

Newer data services that meet business customer requirements for increased speed, functionality, and cost-efficiency now represent 83% of data protocol revenues, with data services such as Ethernet and IP-based virtual private networks having a combined revenue growth of 12% in 2009.

Data collection

The data compiled for this report was obtained from a number of sources. The majority of the data was collected using the Commission’s data collection survey forms. Broadcasting data was generally for the twelve-month period ending 31 August 2009 and telecommunications data was for the twelve-month period ending 31 December 2009.

The Commission collaborates with other government agencies and departments such as Statistics Canada and Industry Canada to minimize the reporting burden on the industry. The data collected for monitoring purposes is also used by Statistics Canada for its national system of accounts. Additional survey questions were added to meet Statistics Canada’s specific needs.

The Commission continues to work with Industry Canada to identify the availability of broadband Internet access service. The data, jointly collected, assists Industry Canada in the administration and monitoring of the $225 million broadband deployment initiative that was part of the federal government’s economic incentive plan in 2009.

Data collection forms are reviewed annually to ensure that only relevant data is collected.

Table of Contents

1.0 Introduction
1.1 Purpose of the report
1.2 Data collection and outline of the report
2.0 The CRTC, policies, and regulation
2.1 The CRTC
2.2 Regulatory oversight of broadcasting and telecommunications
2.3 Contribution and spending regimes
3.0 The Communications service industry
3.1 Communications service industry overview
4.0 Broadcasting
4.1 Broadcasting - Financial review
4.2 Radio
4.3 Television
4.4 Broadcasting distribution
4.5 New media
5.0 Telecommunications
5.1 Telecommunications - Financial review
5.2 Local & access and long distance
5.3 Internet and broadband availability
5.4 Data and private line
5.5 Wireless
6.0 International perspective
6.1 How Canada compares internationally

 

Appendix 1 Data collection methodology and analysis

Appendix 2 Classification of telecommunications service providers

Appendix 3 Status of local forbearance - residential and business exchanges

Appendix 4 International pricing assumptions

Appendix 5 Telecommunications market sector description

Appendix 6 List of acronyms used in the report

Appendix 7 List of decisions, notices, circulars and acts referred to in the report

List of diagrams

Diagram 4.0.1 Program Distribution

List of tables

Table 2.2.1 Broadcasting complaints by sector, by issue

Table 2.2.2 Number of contacts by public

Table 2.2.3 Complaints handled by the CBSC

Table 2.2.4 Complaints handled by the ASC

 

Table 3.1.1 Telecommunications and broadcasting revenues

Table 3.1.2 Industry revenues by type of provider

Table 3.1.3 Industry convergence: Broadcasting v. Telecom

 

Table 4.1.1 Broadcasting revenues

Table 4.2.1 Number and type of radio and audio services authorized to broadcast in Canada

Table 4.2.2 Markets with transitional digital radio stations in Canada

Table 4.2.3 Number of new over-the-air radio stations approved from 1January 2005 to 31 December 2009

Table 4.2.4 Average weekly hours tuned per capita by age group

Table 4.2.5 Radio tuning share in an average week and average weekly hours tuned by listener for English and French AM and FM bands

Table 4.2.6 Fall tuning achieved by the largest private commercial radio operators in Canada

Table 4.2.7 Fall tuning achieved by largest English- and French- language private commercial radio operators in Canada

Table 4.2.8 Revenues and number of undertakings reporting financial results for private commercial radio stations – English, French and Ethnic

Table 4.2.9 English-language, and French-language radio revenues and number of undertakings reporting for the largest radio operators in Canada

Table 4.2.10 Revenues for Type B Native, Community, and Campus radio stations

Table 4.2.11 Value of radio transactions and corresponding tangible benefits for the period 1 May 1998 to 31 December 2009

Table 4.2.12 Summary of annual CCD contributions reported by radio licensees

Table 4.3.1 Number and type of television services authorized to broadcast in Canada

Table 4.3.2 Conventional digital television

Table 4.3.3 National average weekly viewing hours, by age group

Table 4.3.4 Viewing share of Canadian and non-Canadian services by language and type of service – All Canada , excluding Quebec Franco market 2005/2006 – 2008/2009 television seasons

Table 4.3.5 Viewing share of Canadian and non-Canadian services by language and type of service in the Quebec Franco market 2005/2006 – 2008/2009 television seasons

Table 4.3.6 Average weekly viewing hours of Canadian programs distributed by Canadian English-and French-language television services by program origin, genre, and region

Table 4.3.7 Average weekly viewing hours of Canadian programs distributed by Canadian English- and French-language private conventional services by program origin, genre, and region

Table 4.3.8 Average weekly viewing hours of Canadian programs distributed by Canadian English- and French-language CBC conventional services by program origin, genre, and region

Table 4.3.9 Average weekly viewing hours of Canadian programs distributed by Canadian English- and French-language pay and specialty services by program origin, genre, and region

Table 4.3.10 Viewing share of Canadian services by ownership group in the English- and French-language markets

Table 4.3.11 Advertising and other revenues: CBC conventional television stations (owned and operated)

Table 4.3.12 Advertising and other revenues: Private conventional television stations

Table 4.3.13 Revenues: Pay, PPV, VOD and specialty analog and digital services

Table 4.3.14 Ownership group with significant ownership interest in specialty, pay, PPV and VOD services as of 31 December 2009

Table 4.3.15 Canadian Programming Expenditure (CPE) - CBC English- and French-language conventional television

Table 4.3.16 Canadian Programming Expenditure (CPE) - Private conventional television

Table 4.3.17 Expenditures on non-Canadian programming - Private conventional television

Table 4.3.18 Expenditures on Canadian and non-Canadian programming by genre reported by pay and specialty services

Table 4.3.19 Canadian programming expenditures (CPE) reported by the PPV and VOD services

Table 4.3.20 Number of hours of Canadian priority programming broadcasted annually - 7 p.m. to 11 p.m.

Table 4.3.21 Value of television transactions and corresponding tangible benefits for the period 11 June 1999 to 31 December 2009

Table 4.4.1 Broadcast distribution – Basic and non-basic revenues, subscribers, monthly revenues per subscriber, and percent of households subscribing to BDUs

Table 4.4.2 Top Canadian distributors and number of subscribers

Table 4.4.3 Number of subscribers receiving digital services

Table 4.4.4 Number of cable undertakings contributing to community channels

Table 4.4.5 Affiliation payments made to pay, PPV, VOD (pay)and specialty services

Table 4.5.1 Website visits by Canadian unique visitors

Table 4.5.2 Canadian Internet usage by linguistic group

Table 4.5.3 Average weekly hours spent online by Canadian Internet users

Table 4.5.4 Adoption and growth rates of various video technologies in Canada

Table 4.5.5 Adoption and growth rates of various audio technologies in Canada

Table 4.5.6 Time spent by Canadian adopters using various technologies

Table 4.5.7 Various Canadian new media development funds

 

Table 5.1.1 Retail and wholesale telecommunications revenues

Table 5.1.2 Telecommunications revenues, by market sector

Table 5.1.3 Percent of revenues from entities operating in one or more markets sectors

Table 5.1.4 Total telecommunications revenues, by type of service provider

Table 5.1.5 Wireline telecommunications revenue market share (%), by type of service provider

Table 5.1.6 Percent of revenues from forborne services117

Table 5.1.7 Canadian penetration rates – Wireline and wireless subscribers (per 100 households)

Table 5.1.8 Number of connections

Table 5.1.9 Capital expenditures, by type of TSP

Table 5.1.10 Percent of subscribers with local service bundled with other services

Table 5.2.1 Local and access and long distance revenues, local lines, and long distance minutes

Table 5.2.2 Local and access and long distance forborne revenues

Table 5.2.3 Local and access and long distance revenues, by market segment

Table 5.2.4 Local and access revenues, by type of TSP

Table 5.2.5 Local & access lines by type of TSP, by type of TSP

Table 5.2.6 Local and long distance retail monthly revenues per line

Table 5.2.7 Local and access retail monthly revenues per line by type of TSP

Table 5.2.8 Incumbent TSP provincial retail local market share, by line

Table 5.2.9 Incumbent TSP residence and business local market share, by line for major centres

Table 5.2.10 Local wholesale revenues, by major component

Table 5.2.11 Long distance revenues, by type of TSP

Table 5.2.12 Long distance retail revenues per minute, by type of TSP

Table 5.2.13 Large incumbent TSPs’ retail long distance revenue market share, by region

Table 5.3.1 Internet Revenues

Table 5.3.2 Residential Internet subscribers, by type of TSP

Table 5.3.3 Residential Internet plans and pricing

Table 5.3.4 Key telecommunications availability indicators

Table 5.3.5 Number of households that can have broadband access

Table 5.3.6 Broadband availability, by technology

Table 5.4.1 Data and private line revenues

Table 5.4.2 Data protocol revenues, by service category

Table 5.4.3 Data protocol revenue market share, by service category (%)

Table 5.4.4 Private line revenues, by service category

Table 5.4.5 Private line - Short-haul and long-haul revenue market share (%)

Table 5.5.1 Wireless and paging revenues and number of subscribers

Table 5.5.2 Wireless and paging revenue components

Table 5.5.3 Prepaid and post-paid wireless revenues (basic voice and long distance)

Table 5.5.4 Wireless subscriber market share, by province

Table 5.5.5 Average revenue per user (ARPU), by province (excluding paging)

Table 5.5.6 Average monthly churn rates (percent)

 

Table 6.1.1 International pricing (average price per month)

Table 6.1.2 Broadband market share by connection type

Table 6.1.3 Average advertised speeds (Mbps), by connection type

Table 6.1.4 Mobile broadband subscriptions, by country

Table 6.1.5 Wireless industry metrics

Table 6.1.6 Radio industry metrics

Table 6.1.7 Television industry metrics

List of figures

Figure 2.3.1 2009 Contributions to CCD reported by commercial radio & audio services

Figure 2.3.2 2009 Television CPE

Figure 2.3.3 2009 BDU contributions to Canadian programming and local expression

Figure 2.3.4 Subsidy paid to LECs and the revenue percent charge

 

Figure 3.1.1 Broadcasting and telecommunications annual revenue growth rates

Figure 3.1.2 Broadcasting and telecommunications revenues by type of provider

Figure 3.1.3 Commercial broadcasting and telecommunications revenues (excluding non-programming and exempt services)

Figure 3.1.4 BDU revenues, by service type

Figure 3.1.5 BDU – EBITDA margins achieved from all services (programming, exempted, and non-programming services)

Figure 3.1.6 Select Canadian communications companies revenue composition

Figure 3.1.7 Broadcasting and telecommunications operating platforms

Figure 3.1.8 Regulatory considerations in a converging industry

 

Figure 4.1.1 Commercial radio revenues, by broadcaster

Figure 4.1.2 Commercial television revenues, by broadcaster

Figure 4.1.3 BDU revenues, by operator

Figure 4.1.4 Total broadcasting revenues and PBIT/EBITDA margins

Figure 4.1.5 Canadian advertising revenues

Figure 4.2.1 Type of radio and audio services authorized to broadcast in Canada

Figure 4.2.2 Radio tuning share in an average week

Figure 4.2.3 Radio tuning shares - English-language station formats

Figure 4.2.4 Radio tuning shares - French-language station formats

Figure 4.2.5 Revenues - private commercial radio stations

Figure 4.2.6 Average annual revenues and PBIT per station – Private commercial radio stations

Figure 4.2.7 PBIT and PBIT Margin - Private commercial radio stations

Figure 4.2.8 Revenues – English-language private commercial radio stations

Figure 4.2.9 Average annual revenues and PBIT per station – English-language private commercial radio stations

Figure 4.2.10 PBIT and PBIT Margin – English-language private commercial radio stations

Figure 4.2.11 Revenues – French-language private commercial radio stations

Figure 4.2.12 Average annual revenues and PBIT per station – French-language private commercial radio stations

Figure 4.2.13 PBIT and PBIT Margin – French-language private commercial radio stations

Figure 4.2.14 Revenues – Ethnic private commercial radio stations

Figure 4.2.15 Average annual revenues and PBIT per station – Ethnic private commercial radio stations

Figure 4.2.16 PBIT and PBIT Margin – Ethnic private commercial radio stations

Figure 4.3.1 National average weekly viewing hours by age group

Figure 4.3.2 Television revenues: CBC and private conventional television, pay, PPV, VOD, and specialty services

Figure 4.3.3 Source of revenues for conventional television

Figure 4.3.4 Aggregrate PBIT margins for private commerical conventional television, pay, PPV & VOD services, analog, digital Category 1 and Category 2 specialty services

Figure 4.3.5 Aggregate PBIT margins private conventional television, pay, PPV, VOD and specialty services

Figure 4.3.6 Revenues of English-language private conventional television, specialty pay, PPV, VOD services

Figure 4.3.7 Aggregate PBIT margins English-language private conventional television, pay, PPV, VOD and specialty services

Figure 4.3.8 Revenues of French-language private conventional television, specialty, pay, and PPV services

Figure 4.3.9 Aggregate PBIT of French-language private conventional television, pay, PPV, and specialty services

Figure 4.3.10 Revenues of ethnic and third-language specialty, and digital Category 2 pay services

Figure 4.3.11 PBIT Margins of ethnic and third-language specialty, and digital category 2 pay services

Figure 4.3.12 Revenues of large English-language private conventional television ownership groups

Figure 4.3.13 Revenues of large French-language private conventional television ownership groups

Figure 4.3.14 Advertising revenues: CBC conventional television stations (owned & operated)

Figure 4.3.15 Canadian programming expenditures (CPE) - distribution by genre for private conventional television

Figure 4.4.1 EBITDA margins achieved from basic and non-basic programming services

Figure 4.4.2 Contributions to the CTF, other independent industry funds and expenditures on local expression (community channels) reported by broadcasting distribution undertakings

Figure 4.5.1 Cycle of consumer adoption/Product Life Cycle

Figure 4.5.2 Internet applications – bandwidth requirements

Figure 4.5.3 Popular Internet activities of Canadian Internet users

Figure 4.5.4 Video technology penetration in Canada

Figure 4.5.5 Internet video viewing, by Canadians

Figure 4.5.6 Internet video viewing, by Canadians by type

Figure 4.5.7 Penetration of Internet TV viewers, by selected demographic groups

Figure 4.5.8 Audio technology (excluding conventional radio) penetration in Canada

Figure 4.5.9 Podcast usage in Canada

Figure 4.5.10 Downloading music in Canada

Figure 4.5.11 Streaming radio in Canada

Figure 4.5.12 AM/FM broadcasters as a source of audio material in streaming audio

Figure 4.5.13 Time spent watching TV – Average viewing hours of all Canadians as compared to those who report watching TV over the Internet

Figure 4.5.14 Average hours Canadians spend listening to radio – Comparing average Canadian listening hours to those using the Internet to stream audio or listen to podcasts108

Figure 4.5.15 Canadian online advertising revenues

Figure 4.5.16 Canadian mobile advertising revenues

 

Figure 5.1.1 Telecommunications revenues and percent annual growth

Figure 5.1.2 Annual revenue growth, by market sector

Figure 5.1.3 Distribution of telecommunications revenues, by market sector

Figure 5.1.4 Total telecommunications revenue market share, by type of service provider

Figure 5.1.5 Total telecommunications revenue market share, by type of service115

Figure 5.1.6 Total business market wireline revenue distribution, by customer size and type of provider

Figure 5.1.7 Telecommunications revenues and EBITDA margins

Figure 5.1.8 Capital expenditures as a percentage of revenues, by type of TSP (includes AWS expenditures in 2008)

Figure 5.1.9 Wireline inter-carrier expenses as a percentage of revenues, by type of TSP

Figure 5.1.10Price indices [TPI, BDU (cable and satellite, including pay television), Internet access services, and CPI]

Figure 5.2.1 Alternative TSP local retail lines (excluding incumbent out-of-territory), by type of facility

Figure 5.2.2 Alternative TSP local residential and business lines, by type of facility

Figure 5.2.3 Incumbent TSP pay telephone quantities and revenue per payphone

Figure 5.2.4 Local business market revenue distribution, by customer size and type of provider (2009)

Figure 5.2.5 Long distance business market revenue distribution, by customer size and type of provider (2009)

Figure 5.3.1 Internet access revenue share, by type of entity

Figure 5.3.2 Business Internet access revenues, by access technology

Figure 5.3.3 Residential Internet access technology mix (2005 v. 2009)

Figure 5.3.4 Broadband (greater than 1.5 Mbps) subscriptions

Figure 5.3.5 Broadband availability (percent of households)

Figure 5.3.6 Broadband availability – Urban v. rural (Percent of households)

Figure 5.3.7 Broadband availability v. broadband subscriptions

Figure 5.4.1 Data and private line revenue market share, by type of TSP

Figure 5.4.2 Data revenue market share, by type of TSP

Figure 5.4.3 Private line revenue market share, by type of TSP

Figure 5.4.4 Data and private line service revenue distribution, by customer size and type of provider

Figure 5.5.1 Wireless revenues, subscribers, and revenues per subscriber (excluding paging)

Figure 5.5.2 Wireless revenue and subscriber growth rates (excluding paging)

Figure 5.5.3 Revenues by major component (excluding basic voice)

Figure 5.5.4 Percent of prepaid and post-paid subscribers

Figure 5.5.5 Capital expenditures (CAPEX) and average capital expenditure per user (ACEPU)

Figure 5.5.6 Retail and Wholesale Revenue Split

Figure 5.5.7 Wireless TSPs' subscriber market share

Figure 5.5.8 Wireless TSPs' revenue market share

Figure 5.5.9 Population coverage and penetration

 

Figure 6.1.1 Global telecommunications service revenues

Figure 6.1.2 Communications retail revenues per capita

Figure 6.1.3 Average monthly telecommunications retail revenues

Figure 6.1.4 International penetration

Figure 6.1.5 Fixed broadband connections 2004-2009, year-over-year growth

Figure 6.1.6 Average measured broadband speeds, 2008 and 2009

Figure 6.1.7Availability of mobile broadband (3G), 2007 and 2008

Figure 6.1.8Wireless ARPU – monthly mobile revenues, including data share

Figure 6.1.9Prepaid share of mobile subscriptions, 2004 and 2009

Figure 6.1.10Primary television platforms, 2009 (% of TV households)

List of maps

Map 5.5.1 Presence of wireless facilities-based service providers

Map 5.5.2 Presence of 3G or 3G-equivalent wireless facilities-based service providers

 


Notes:

[1] Revenues per subscriber per month were derived by dividing total revenues by the number of subscribers and by the number of months in the year.