Annual report (20-F) - Ono

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The chart below sets forth our organizational structure as of December 31, 2004: Grupo Corporativo ONO RETECAL 100% Cableuropa 100% ONO Finance (Holdings) Ltd 98% ONO Finance PLC 2% Valencia 100% Mediterranea Valencia Norte 100% Mediterranea Valencia Sur Sur 100% We are in the process of merging Valencia, Mediterranea Norte and Mediterranea Sur with Cableuropa. We are also in the process of merging Retecal with Cableuropa through a capital increase subscribed by GCO in exchange for 100% of the capital stock of Retecal. D. Property, Plant and Equipment Our Networks Local Networks Our local networks have been designed using a high-speed fiber-optic based system, capable of providing a full range of analog and digital services. The local networks are currently capable of supporting telephony, broadband Internet and cable television services. All of our services are provided through the same distribution system thus creating economies of scale. Fiber routing is designed to provide route diversity to the fiber junctions, or nodes, thereby protecting against loss of service resulting from cable damage. Our fiber-optic ring architecture is used to transport signals from local operations centers to primary nodes, or hub points, serving 20,000 to 60,000 homes in urban areas. The local operations centers generally house both a cable television head-end and a telephony and data switch. The head-end assembles the cable television signals for transmission to the customers. The primary nodes are in turn connected to secondary nodes along a secondary fiber-optic ring network. These secondary nodes are optical distribution points each serving around 2,000 homes, which distribute fiber to the home terminal nodes. The home terminal nodes serve 500 homes. For telephony, the final points for distribution to homes and small businesses are cross-connect boxes from which the final connection to a customer’s home is made using twisted-pair copper wire. The terminal nodes transform the optical signals back into electrical format and transmit them onwards on coaxial cable or copper pairs to the customer’s premises. Cross-connect boxes are connected to the terminal nodes by twisted pair copper wire. Our 15 telephone switches are the core of our telephony business. Each switch is capable of handling up to 100,000 customers. The telephony network has been designed so that, as penetration and traffic increases, an incremental upgrade of the equipment will enable additional capacity to be easily provided at minimal cost. All the network’s telephony equipment is powered by battery backed-up power supplies, in order to meet the current legal requirement to provide at least 12 hours of service in the event of a power failure. For broadband Internet and cable television services, coaxial cables are used to transport the signals to homes, and amplifiers are used to boost the signal levels. Customer taps are used to serve individual dwellings. These typically serve four or eight homes per tap. Amplifiers are mounted in sealed units, generally on the façades of buildings. The final connection to the home, known as the drop, uses a combination of coaxial and copper pair cable. The coaxial part carries the broadband and cable television signals both to and from the homes. Two copper pairs are also incorporated in each drop to allow for 44
second telephony lines. The networks are constructed with excess fiber and duct capacity in order to allow future upgrades. The broadband Internet and cable television networks use a hybrid fiber-coaxial transmission system. The system is broadband and operates over a wide frequency. The forward path uses the range from 86 megahertz to 862 megahertz, and is capable of carrying voice, data, video and television channels. The segment up to 630 megahertz is currently used for broadband internet and analog cable television services and a further 232 megahertz of capacity is used or reserved for digital television, video-on-demand (“VOD”) and future digital services. Once we have migrated all of our television customers to our digital television services, we will reuse the analog segment for other services. This network is also designed to support reverse path operations on bandwidths up to 65 megahertz allowing interactivity between individual homes and the head-ends. The digital television system collects all contributions centrally in Spain (except for local channels which are inserted locally), digitizes the content and distributes it (via our national backbone network) to the regional head-ends, which act as the insertion points of the digital contents into the metropolitan network. The analog cable television service is distributed through an analog platform with head-ends located in each of the Spanish franchises. Unlike with the digital service, the programming material is collected at each head-end (not centrally), reconfigured to meet our specifications, and transmitted through optical fibers. Backbone Network Iberdrola, a large Spanish electrical utility provider, leases us high capacity fiber-optic cable linking our Spanish franchises in eastern and northern Spain with each other and with the city of Madrid. ADIF (formerly RENFE, the Spanish national railway company) provides us with similar fiber linking Andalucía with Madrid. We completed the lighting of our national backbone network in 2001 and we have since then added almost full redundancy to ensure that we can maintain a high quality of service and network availability for our customers. By the end of 2004, we were operating 7,575 route kilometers of high capacity, fiber-optic cable national network. Our national backbone network has been augmented with a national IP network, which serves as the basis for our interactive digital television and high-speed Internet services. Our network consists of twelve nodes connected through high capacity circuits based on our DWDM national network. The IP network also has multi-protocol label switching (“MPLS”) capability, which allows for the provision of a wide range of services and in particular better support for business services. It also makes the network more secure, easier to expand and less costly to operate, in addition to making it simpler to offer value added business services such as virtual private networks. The diagram set forth below provides a high level, graphical depiction of our network topology: General Network Topology To Interconnection and National Network Primary Node Fibre ring (2 x 128 fibres) or (1 x 128) + (1 x 96) Fibre ring (1 x 80 fibres and 1 x 48 or 64) Large & Medium Businesses Access Network (Star) 8 Fibres Terminal Node Coaxial & Pair cables Amplifiers 125 hp Taps Headend Primary Trunk Network Primary Node Large: > 50,000 hp Medium: 30,000 hp Small: < 16,000 hp Primary Node Secondary Node Secondary Node Secondary Trunk Network Secondary Node Terminal Node Secondary Node Secondary Node Access Network (Ring) Terminal Node 125 hp Terminal Node 125 hp 125 hp Terminal Node Terminal Node Terminal Node Apartments, SOHO´s, Single dwellings STM- 4 at 622 MB/sec STM-16 at 2.48 GB/sec 2,000 hp/node STM-1 at 155 MB/sec Terminal Node 500 hp/node STM-0 at 52 MB/sec 45
Page 1 and 2: SECURITIES AND EXCHANGE COMMISSION
Page 3 and 4: “RGUs” are revenue generating u
Page 5 and 6: CONTENTS Clause Item 1. Identity of
Page 7 and 8: PART I Item 1. Identity of Director
Page 9 and 10: Reconciliation between EBITDA and n
Page 11 and 12: The table below shows the high and
Page 13 and 14: significant qualifications and exce
Page 15 and 16: • consolidate our brand in the ma
Page 17 and 18: operating and financial performance
Page 19 and 20: the products and services we offer
Page 21 and 22: • our ability to access the finan
Page 23 and 24: In March 2005, Cableuropa performed
Page 25 and 26: Our Strategy experience with cable
Page 27 and 28: We offer the following bundled serv
Page 29 and 30: Digital Television The introduction
Page 31 and 32: annual revenue of around €1 milli
Page 33 and 34: them are trained in our specific in
Page 35 and 36: • Andalucía Cluster. The Andaluc
Page 37 and 38: • Television line-up. Sogecable h
Page 39 and 40: In accordance with the General Law
Page 41 and 42: Telecommunications further requires
Page 43: Obligations According to the releva
Page 47 and 48: Address Current Use Size (square me
Page 49 and 50: Address Current Use Size (square me
Page 51 and 52: The following are the key factors a
Page 53 and 54: The following table sets forth reve
Page 55 and 56: The following table sets forth cert
Page 57 and 58: total revenues to 28.6% for the yea
Page 59 and 60: Net Extraordinary Income/(Expense)
Page 61 and 62: needed before commercial launch of
Page 63 and 64: Net cash provided by financing acti
Page 65 and 66: A number of these contracts are sub
Page 67 and 68: All decisions regarding our busines
Page 69 and 70: Leopoldo Calvo-Sotelo became an ind
Page 71 and 72: Audit and Compliance Committee GCO
Page 73 and 74: E. Share Ownership Currently none o
Page 75 and 76: The shareholders’ agreement provi
Page 77 and 78: Dividend and Liquidation Rights Pay
Page 79 and 80: • the aggregate increases approve
Page 81 and 82: As security for the senior bank fac
Page 83 and 84: The Indentures also provide for eve
Page 85 and 86: par value shares and subject to adj
Page 87 and 88: Where interest has been paid under
Page 89 and 90: the avoidance of double taxation. H
Page 91 and 92: possible application of the passive
Page 93 and 94: a sale, exchange, retirement or dis
Page 95 and 96:
The table below shows the variable
Page 97 and 98:
Item 16C. Principal Accountant Fees
Page 99 and 100:
No. 333-10976)). (Now superseded.)
Page 101 and 102:
Form F-4 (File No. 333-109976)). 4.
Page 103 and 104:
INDEX TO THE CONSOLIDATED FINANCIAL
Page 105 and 106:
CABLEUROPA, S.A.U. AND SUBSIDIARIES
Page 107 and 108:
CABLEUROPA, S.A.U. AND SUBSIDIARIES
Page 109 and 110:
Other subsidiaries: Company Name He
Page 111 and 112:
d) Foreign exchange rate options Fo
Page 113 and 114:
Had the life of this debt not been
Page 115 and 116:
6. Start-up costs Euro thousand Bal
Page 117 and 118:
) Finance leases Computer hardware
Page 119 and 120:
9. Financial assets Euro thousand B
Page 121 and 122:
The detail of short and long term d
Page 123 and 124:
Cancellation in 2003 of MBCF relate
Page 125 and 126:
(e) State Subsidies Starting in 200
Page 127 and 128:
Options granted under the Phantom P
Page 129 and 130:
(c) Reserves (accumulated losses) i
Page 131 and 132:
(c) The movement in deferred tax as
Page 133 and 134:
In 2004, 2003 and 2002, the Group
Page 135 and 136:
Transactions Services received Serv
Page 137 and 138:
Euro thousand 2004 2003 Audit servi
Page 139 and 140:
Euro thousand 2004 2003 2002 Change
Page 141 and 142:
Reconciliation of net profit / (los
Page 143 and 144:
Management of the Group considered
Page 145 and 146:
(n) Start-up costs. Under Spanish G
Page 147 and 148:
Amortization expense related to int
Page 149:
(h) Leases The group leases certain
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Annual report (20-F) - Ono

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