Annual report (20-F) - Ono

Our Strategy
experience with cable telecommunications companies in the United Kingdom and the
United States.
• Strong shareholder support. Our shareholders provide us with a strong financial
commitment and local and international perspectives. Since we commenced operations
in 1998, our shareholders have collectively contributed approximately €945 million.
Our shareholders also contribute Spanish market understanding, financial expertise, and
important relationships with regulators, governmental authorities, suppliers, and
customers. Our shareholders include Banco Santander Central Hispano, Bank of
America, Capital Communications CDPQ, General Electric, Grupo Ferrovial, Grupo
Multitel and Sodinteleco.
• Strong brand recognition. A key element of our marketing strategy is capitalizing on
the fact that ONO is a well-recognized brand in our areas of operation and in Spain.
Our strategy is to maintain and enhance our position as a leading provider of integrated
telephony, broadband Internet and cable television services in Spain. In order to achieve these objectives
we focus on:
• Increasing cash flow generation and maximizing our return on capital employed,
through the following strategies:
• Increasing Penetration. We believe that the acquisition of new customers and
the retention by increasing loyalty levels of current customer base in our
franchise areas is critical to the success of our business plan. Our strategy is to
increase penetration in our franchise areas by offering bundled services to
attract new customers by providing them with a single solution to their
communication, entertainment and information needs at competitive prices and
by increasing their loyalty to our company,.
In key cities where we have marketed for more than five years, such as Cádiz
and Albacete, we have already achieved penetration rates in excess of 40%.
We believe that this is due to our continued marketing efforts within our
franchise areas following the substantial build-out of the relevant network, and
illustrates our belief that there is significant customer growth potential within
our existing base of homes released to marketing.
• Cross-Selling and Up-Selling to Our Existing Customer Base. We intend to
use our existing customer relationships to sell additional products and services
to our customers or migrate them to higher value services, which we refer to as
“up-selling.” In particular, we intend to encourage our customers to subscribe
for additional services by offering bundled services at prices that are lower
than prices for the same services provided by our competitors or by us on an
individual basis. In addition, we believe that providing existing customers with
a variety of new and enhanced services with tiered pricing options encourages
our customers to take more than one of our services.
• Leveraging Our Network to Provide Business Services. Our strategy is to
grow our customer base among small and medium sized businesses within our
franchise areas by capitalizing on our technologically advanced network and
success in marketing bundled services. During 2003, we introduced the
Oficina ONO product that offers a combination of telephony and broadband
Internet services to our business customers. In addition, we are selectively
increasing the number of larger corporate business service customers within
our franchise areas by offering tailored voice and data solutions.
• Continued improvement of our financial structure: Our management and shareholders
are committed to ensuring that we have an appropriate capital structure, taking into
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