Charter 1999 Annual Report Download - page 13

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1999 SUMMARY ANNUAL REPORT 11
A.THE OPPORTUNITY TO INVEST IN THE HIGH-TECH, HIGH-
GROWTH FUTURE OF BROADBAND. LED BY AN EXPERIENCED
MANAGEMENT TEAM WITH A SOLID TRACK RECORD OF FINANCIAL
AND OPERATING PERFORMANCE, CHARTER IS CAPITALIZING ON
UNSURPASSED RESOURCES TO CAPTURE LEADERSHIP IN BROADBAND.
1999 CABLE INDUSTRY
ESTIMATED REVENUE MIX
Telephone <1%
Data 2%
Digital Video 9%
Analog Video 88%
2005 CABLE INDUSTRY
ESTIMATED REVENUE MIX
Telephone 16%
Data 12%
Digital Video 42%
Analog Video 30%
for customers and for shareholders. Strategic acquisitions
have improved clustering and reduced operating costs.
A REBUILT INTERACTIVE BROADBAND SYSTEM
We’re continuing to strengthen our relationship with cus-
tomers by rebuilding our network to the highest standards in
the industry. Our ambitious program is ahead of schedule
and within budget. The $3.1 billion investment makes
possible the introduction of high-value digital video and
high-speed Internet services today. It will make available the
full potential of interactive broadband services in the future.
Charter continues to aggressively roll out new digital
video and high-speed Internet services. By year-end 1999,
we offered digital services in more than 100 local systems
and served 155,400 digital video customers. In 2000, we’re
on track to add an average of 10,000 digital video customers
a week. Digital video service provided additional household
revenue to Charter of an average of $20 per month from
each of our digital video customers, contributing to our dou-
ble-digit growth in revenue and operating cash flow in 1999.
UNSURPASSED BROADBAND CAPABILITIES
No other technology can provide the full array of video, data,
and telephone services that our broadband network can
deliver. Charter is uniquely positioned to develop new serv-
ices and content for customers and to deliver those products
right to their homes or offices with the best, most reliable
broadband network available.
Source: Goldman Sachs Estimate
WHAT IS THE POTENTIAL OF BROADBAND?
In 1999, video service accounted for 97 percent of cable industry
revenues. By 2005, video service is expected to supply approximately
72 percent of industry revenues, as the contribution from data and
telephone service grows to 28 percent — and total industry revenues
double. Industry revenues are expected to grow from $34.2 billion in
1999 to over $70.1 billion in 2005.