Customer Base Exceeds 1.5 MM and Churn Rate Falls to 16.1% At Close of 2000; 2.4 Million Homes Prepared to Receive Virtua Broadband Service.Business Editors SAO Sa´o n. 1. (Zool.) Any marine annelid of the genus Hyalinæcia, especially H. tubicola of Europe, which inhabits a transparent movable tube resembling a quill in color and texture. PAULO Paulo is the Portuguese form of the given name Paul:
Globo Cabo S.A. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :GLCBY; BOVESPA See Bolsa de Valores de Sao Paulo. :PLIM4; LATIBEX:XGLCP) announced today its subscriber base and network data for the fourth quarter of 2000. To facilitate comparison, all of the subscriber base information is provided on a pro-forma basis with Vicom and Net Sul operations incorporated into Globo Cabo for all periods presented. Pay TV
- The churn rate was 16.1% for 2000, representing a significant improvement
compared to churn of 22.1% for 1999. The Company's strict disconnection policy
has been a key factor in the maintenance of Globo Cabo's solid subscriber base,
with growth being supported by a thorough credit screening process for new
subscribers.
- The automated bill paying service has grown to represent 30% of total
receipts in December 2000, a growth of 15% compared to December 1999. This
increase results in a reduction in billing costs, provisions for doubtful
accounts and churn, the latter influenced by the higher degree of loyalty
developed when customers participate in automated billing programs.
- In the Package Sales Mix, the Advanced Package, Globo Cabo's most complete
service option, grew by 0.2 percentage point its participation in the total
sales mix in 4Q00, while the Standard package continued to increase it
participation in total sales, growing to 5.0% of total sales in 4Q00, compared
to 3.0% in 3Q00. Although priced lower, the contribution margin of the Standard
Package is very significant.
- The improved sales mix demonstrates the success of Globo Cabo's efforts to
build a solid subscriber base, with an emphasis on profitable, long-lasting
client relationships. In 2000, customer loyalty initiatives were taken, aiming
to strengthen relationships with customers and ensure quality and innovation in
the Company's services. Among these is the S.O.S. free 24-hour residential
emergency support service offered to subscribers of the Plus and Advanced
packages, as well as to subscribers of Virtua.
- The first interactive broadcasts (multi-camera) in an analogue environment
were realized during the final games of the Joao Havelange Cup, where
Pay-per-View subscribers were given the opportunity to watch the games from
variable camera angles. The games were broadcast on five different channels
simultaneously (normal cameral angle, angle from behind team 1's goal, angle
from behind team 2's goal, channel with the game's highlights, and a channel
showing a 30 second delay of the live action).
- Average revenue per subscriber (ARPU) in the fourth quarter, excluding
Corporate Networks and Virtua, is expected to be in line with the third quarter
(which was approximately R$62.00), in R$ terms.
Subscriber base (in thousands)
4Q99 1Q00 2Q00 3Q00 4Q00 FY 2000
Globocabo 1,332 1,348 1,416 1,468 1,505 1,505
Annualized Growth -1.0% 4.9% 21.7%(a) 15.5% 10.4% 12.9%
(a) Blumenau and Londrina Acquisition
- The churn rate was 16.1% for 2000, representing a significant improvement
compared to churn of 22.1% for 1999. The Company's strict disconnection policy
has been a key factor in the maintenance of Globo Cabo's solid subscriber base,
with growth being supported by a thorough credit screening process for new
subscribers.
- The automated bill paying service has grown to represent 30% of total
receipts in December 2000, a growth of 15% compared to December 1999. This
increase results in a reduction in billing costs, provisions for doubtful
accounts and churn, the latter influenced by the higher degree of loyalty
developed when customers participate in automated billing programs.
- In the Package Sales Mix, the Advanced Package, Globo Cabo's most complete
service option, grew by 0.2 percentage point its participation in the total
sales mix in 4Q00, while the Standard package continued to increase it
participation in total sales, growing to 5.0% of total sales in 4Q00, compared
to 3.0% in 3Q00. Although priced lower, the contribution margin of the Standard
Package is very significant.
- The improved sales mix demonstrates the success of Globo Cabo's efforts to
build a solid subscriber base, with an emphasis on profitable, long-lasting
client relationships. In 2000, customer loyalty initiatives were taken, aiming
to strengthen relationships with customers and ensure quality and innovation in
the Company's services. Among these is the S.O.S. free 24-hour residential
emergency support service offered to subscribers of the Plus and Advanced
packages, as well as to subscribers of Virtua.
- The first interactive broadcasts (multi-camera) in an analogue environment
were realized during the final games of the Joao Havelange Cup, where
Pay-per-View subscribers were given the opportunity to watch the games from
variable camera angles. The games were broadcast on five different channels
simultaneously (normal cameral angle, angle from behind team 1's goal, angle
from behind team 2's goal, channel with the game's highlights, and a channel
showing a 30 second delay of the live action).
- Average revenue per subscriber (ARPU) in the fourth quarter, excluding
Corporate Networks and Virtua, is expected to be in line with the third quarter
(which was approximately R$62.00), in R$ terms.
Broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). - Virtua, one of Globo Cabo's broadband Internet access Broadband Internet access, often shortened to just "broadband", is high speed Internet access—typically contrasted with dial-up access over modem. Dial-up modems are generally only capable of a maximum bitrate of 56 kbit/s (kilobits per second) and require the full use of a services, added 13,344 net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight during the fourth quarter, an increase of 228% compared to the net additions in the third quarter. At the close of 2000, the Company recorded a total of 28,136 net sales for Virtua. The growth in sales of Virtua observed in December December: see month. 2000 continued in January January: see month. 2001, with approximately 5,500 additional sales. - Of the 28,136 net sales realized, 230 were Virtua Business packages, each of which accounts for an average of 5 users per subscription, bringing the total number of Virtua users to approximately 30,000. - During 4Q00, the Company successfully concluded the upgrade of an additional 1.277 million new households to enable bi-directional capability, bringing the total number of homes passed with bi-directional capability to 2.39 million, in line with the Company's broadband strategy. In December, Globo Cabo announced the introduction of Virtua in Florianopolis, the tenth Brazilian city to receive Internet access See how to access the Internet. at speeds up to 512 Kbps. - At the close of 4Q00, 60% of the Virtua base was subscribed to packages of 256 Kbps or greater. With the launching of new Virtua packages in October 2000, sales of packages with connection speeds below 256 Kbps are increasing as a portion of total sales. - During 4Q00, Globo Cabo established agreements with major retailers such as Ponto Frio and Arapua in order to open new sales channels for Virtua and cable TV service. - In December 2000, Kodak and Globo Cabo announced an agreement that will provide broadband connections See broadband and wireless broadband. between Kodak Express stores in Brazil. This is a pioneer initiative in the Brazilian image processing market and will extend throughout the 1,600 Kodak stores in the country. The project will provide high-speed Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the connections to licensed Kodak Express stores in Brazil through a corporate configuration. The interconnected stores will be able to offer a series of digital services to customers and deliver image files to any one of the stores in the Kodak Express network. - The agreement with Kodak is yet another example of Globo Cabo's focus on developing specific segments for Virtua usage. In January 2001, Globo Cabo solidified so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. a partnership with Unibanco Insurance, whereby brokers will be able to manage client portfolios using Virtua's broadband Internet access. Through a dedicated portal, brokers will be able to execute a series of actions, including: sending policy proposals, consulting policy data, calculation of policy values, consulting commissions, among many others. Corporate Networks - In the Corporate Networks Division total installations grew 15% in 4Q00 compared with 3Q00. The amount of proprietary stations rented to clients (which represent 35% of total installations) grew 51%, while the portion of client stations under third-party maintenance contracts (representing 65% of total installations) remained practically stable, growing 2% in the same period. - The Company introduced 2 new products to the market: Virtua VPN (Virtual Private Network) A private network that is configured within a public network (a carrier's network or the Internet) in order to take advantage of the economies of scale and management facilities of large networks. (Virtual Private Network) and Fibranet, both based on HFC 1. (networking) HFC - Hybrid Fiber Coax. 2. (hardware) HFC - hydrofluorocarbon. (Hybrid Fiber Coax) networks. The former is in the final stage of installation at Associacao Alumni, and the latter is being installed for clients such as: Bic Banco, Colegio Bandeirantes, Eletromidia, Laboratorio Fleury, Via Networks, among others. Other News - In December 2000, Globo Cabo launched the new Investor Relations Investor relations The process by which the corporation communicates with its investors. section of its corporate website, demonstrating the Company's commitment to strengthening its relationships with investors and analysts. The improved site is a valuable communications tool for investors and analysts, in line with transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. and disclosure guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. set by CVM, SEC Fair Disclosure regulations, and Globo Cabo's Investor Relations policies and standards. The Capital Market has already acknowledged the Company's effort through the votes that elected (on 2nd Feb. 2001) Globo Cabo's IR site the best one among 156 competing companies. In addition to this recognition, the site was also awarded as one of the Top 5 sites in Brazil based on an evaluation conducted by MZ Consult. Globo Cabo is the largest Pay TV provider with 48 operating licenses (45 cable and 3 MMDS (Multichannel Multipoint Distribution Service or Microwave Multipoint Distribution Service) A digital wireless transmission system that works in the 2.2-2.4 GHz range. ) and a presence in 67 cities, including Brazil's main metropolitan regions such as Sao Paulo, Rio de Janeiro Rio de Janeiro, city, Brazil Rio de Janeiro (rē`ō də zhänā`rō, Port. rē`  thĭ zhənĕē`r , Porto Alegre Porto AlegrePort and city(pop., 2005 est.: city, 1,386,900; metro. area, 3,978,263), southern Brazil. Located along the Guaíba River near the Atlantic Ocean coast, it was founded c. 1742 by immigrants from the Azores. It was first known as Porto dos Casais. and Belo Horizonte Belo Horizonte (bəl' rēzôN`tĭ) [Port.,=beautiful horizon], city (1996 pop. 2,091,770), capital of Minas Gerais state, E Brazil. - operating under the NET
brand. The Company's cable network passes over 6.4 million homes1
and includes virtually all of the main cities in the southern,
southeastern and Midwestern regions of Brazil Brazil is currently divided in five regions, by the Instituto Brasileiro de Geografia e Estatistica (IBGE). These divisions are composed by states with similar cultural, economical, historical and social aspects, and although through the scientific point of view information given by this . Globo Cabo is one of the
main content distribution arms of Globo Organizations, the largest media
conglomerate conglomerate, in businessconglomerate, corporation whose asset growth, often very rapid, comes largely through the acquisition of, or merger with, other firms whose products are largely unrelated to each other or to that of the parent company. in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . In addition to Globo Organizations, Bradespar, Microsoft, BndesPar and RBS RBS Royal Bank of Scotland RBS Role Based Security RBS Rollback Segment RBS Rare Book School (University of Virginia) RBS Rural Business Cooperative Service RBS Ribosome Binding Site (genetics) make up the controlling shareholder group. As of December 31, 2000, the Company's free-float represented approximately 21,6% of total share capital. The Company's stock is traded on the Bovespa, Nasdaq and Latibex exchanges. (1) New construction and cable terminal extensions resulted in an increased number of homes passed, with no material impact to the Company's capital expenditures. |
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