MANAGEMENT’S DISCUSSION AND ANALYSIS Voice-over-cable telephony services are provided over a dedicated DOCSIS network. Our offerings ensure a high quality of service by including network redundancy as well as network and customer premise backup powering. Our cable telephony service includes a rich set of features, such as TV Call Display, three-way calling and Home & Away™ voicemail that allows customers to be notified of and listen to their voicemail over MMS or the Web. In addition, we offer a wireless alternative to a fixed-line service. Cable television competes: Cable Internet competes with other ISPs that offer residential and commercial dial-up and high-speed Internet access services. Rogers Hi-Speed Internet services compete directly with: Cable telephony competes with: In January 2013, we announced a multi-part strategic transaction with Shaw to acquire Mountain Cable (Shaw’s cable system in Hamilton, Ontario), and to secure an option to purchase Shaw’s Advanced Wireless Services spectrum holdings in 2014. As part of the agreement, we sold our one-third equity interest in the TVtropolis specialty TV channel to Shaw. Mountain Cable provides cable television, Internet and telephony services to an area covering approximately 59,000 homes in and around Hamilton, Ontario. On May 1, 2013, we closed on a portion of the multi-part agreement with Shaw to buy 100 % of Mountain Cable, and paid $398 million, according to the terms of the agreement. 1 Subscriber count is a key performance indicator. See “Key Performance Indicators”. 2 On May 1, 2013, we acquired 40,000 television subscribers, 38,000 digital cable households, 34,000 cable high-speed Internet subscribers and 37,000 cable telephony lines from our acquisition of Mountain Cable. These subscribers are not included in net additions, but do appear in the ending total balance for December 31, 2013. The acquisition also increased homes passed by 59,000. 3 Includes television, Internet and phone subscribers. CABLE FINANCIAL RESULTS COMPETITION GLYPH<129> increasingly with alternative, Canadian multi-channel Broadcasting Distribution Undertakings (BDUs), including Bell TV, Shaw Direct, satellite TV services, and Internet Protocol television GLYPH<129> with over-the-air local and regional broadcast television signals received directly through antennas, and the illegal reception of US direct broadcast satellite services GLYPH<129> with television shows and movies streaming over the Internet through providers like Netflix and Apple TV. 1 Results of operations include Mountain Cable’s operating results as of May 1, 2013 (the date of acquisition). (In millions of dollars, except percentages) Years ended December 31 2013 1 2012 % Chg Operating revenue Television $ 1,809 $ 1,868 (3) Internet 1,159 998 16 Phone 498 477 4 Service revenue 3,466 3,343 4 Equipment sales 9 15 (40) Operating revenue – Cable 3,475 3,358 3 Operating expenses Cost of equipment (6) (20) (70) Other operating expenses (1,751) (1,733) 1 (1,757) (1,753) – Adjusted operating profit – Cable $ 1,718 $ 1,605 7 Adjusted operating profit margin 49.4 % 47.8 % Additions to property, plant and equipment 1,105 832 33 CABLE SUBSCRIBER RESULTS Years ended December 31 (Subscriber statistics in thousands) 2013 2012 Chg Cable homes passed 3,978 3,810 168 Television Net losses (127) (83) (44) Total television subscribers 2 2,127 2,214 (87) Internet Net additions 63 73 (10) Total Internet subscribers 2 1,961 1,864 97 Phone Net additions 42 23 19 Total phone subscribers 2 1,153 1,074 79 Total service units 2,3 Net additions (losses) (22) 13 (35) Total service units 5,241 5,152 89 GLYPH<129> Bell’s DSL Internet service in Ontario GLYPH<129> Bell Aliant’s DSL/fibre and FTTH Internet services in New Brunswick and Newfoundland GLYPH<129> various resellers using wholesale telco DSL and cable Third Party Internet Access (TPIA) services in local markets. GLYPH<129> Bell’s wireline phone service in Ontario GLYPH<129> Bell Aliant’s wireline phone service in New Brunswick and Newfoundland and Labrador GLYPH<129> ILEC local loop resellers (such as Primus) as well as VoIP service providers (such as Vonage and Skype) riding over the Internet access services of ISPs GLYPH<129> Wireless home phone products. ACQUISITION 42 ROGERS COMMUNICATIONS INC. 2013 ANNUAL REPORT (IN THOUSANDS) CABLE SUBSCRIBER BREAKDOWN  20 1 3 2012 2011 1 , 1 53 1 ,9 61 1,074 1, 8 64 1,052 1,793 2, 1 27 2,214 2,297 Internet Phone Television