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MDU Communications Expands and Extends Broadband Service Offerings; Opens New Regional Office in Dallas, Texas(December 14, 2011)
TOTOWA, NEW JERSEY -- (Marketwire) -- 12/14/11 -- MDU Communications International, Inc. (OTCBB:MDTV), one of the nation's largest operators and providers of DIRECTV and Broadband services specifically serving the multi-family marketplace, has enhanced its Broadband service offering and has begun rolling out and marketing this service to its existing portfolio of multi-family properties already signed to competitive and exclusive type right of entry access agreements.
Historically, the Company has focused Broadband subscriber growth primarily in properties willing to sign long-term bulk access agreements. The guaranteed subscriber base and revenue streams derived from these properties has enabled the Company to develop a suitable base of properties, expertise and infrastructure from which it can now extend its reach into its much larger base of competitive and exclusive properties. Moreover, working with partners, the Company has lowered the previous financial barriers to entry to the competitive and exclusive market. The costs associated with deployment of Broadband systems (that generally are delivered over existing Company-installed service distribution systems) have come down in price over the years, as has the fixed recurring cost of bandwidth supplied to the properties. By working with partners to further share and allocate these lowered costs, the Company has made Broadband deployments in competitive and exclusive type properties a more profitable venture. These barriers previously represented significant financial risk given the Company had no guarantee of subscribership, unlike the case in bulk deployments.
The new Broadband service offering will provide significantly greater access speeds for residents to support high bandwidth capacity Internet-based services such as music and video downloading, movie and television streaming, gaming, etc. Residents in select test property deployments will be offered several pricing tiers with download speeds of up to 100Mbps. Additionally, the Company will be bundling its DIRECTV?? and Voice over IP services with this new offering and may be launching other incremental services supported by its robust property networks.
The Company currently provides services to over 78,000 subscribers in 800 multi-family properties comprising over 174,000 residences. However, its Broadband services have only been launched in 109 of these properties with only 10,000 subscribers. There is a significant opportunity for the Company to now profitably up-sell Broadband services to potentially 68,000 of its existing subscribers that have already made the decision to subscribe to the Company's video products. Additionally, there exists a substantial opportunity to sell Broadband services to residents that do not currently subscribe to any Company services, but whose residential unit is already wired for such services.
The Company has already initiated this new roll out to a select group of properties in a specific service region. The Company will target its existing video subscriber base through a new aggressive outbound solicitation sales program and through up-selling and cross-selling when existing subscribers contact the Company regarding other matters. The Company will measure the results and expand the initiative to other properties as appropriate in fiscal 2012.
To support its growing video and Broadband market in the South Central market, the Company has recently launched a regional office in the Dallas - Fort Worth area. The Company has grown from only a handful of properties in this regional market three years ago to 147 properties with 9,370 subscribers in 34,263 residences at present. Providing a local presence in a large regional market not only assists with sales and marketing initiatives (many multi-family owners and subscribers prefer providers with a local presence), but it is more cost-effective having Company technicians working out of and being coordinated from a physical space than outsourcing the work to subcontractors and managing them remotely.
As previously mentioned, the Company entered into a Construction Contractor Agreement to be an authorized contractor to provide DIRECTV with system design and construction services to support DIRECTV's multi-family Connected Properties(TM) program. The Company is utilizing existing resources to fulfill project requirements and expects to complete a number of construction projects in the current fiscal quarter. Additionally, the Company signed a DIRECTV MDU Referral and Right of Entry Acquisition Agreement whereby the Company is an authorized agent to negotiate "choice" right of entry agreements on behalf of DIRECTV for its multi-family Connected Properties(TM) program. The Company has assisted DIRECTV with these programs to a small degree in fiscal 2011 and is prepared to increase its assistance with these initiatives during fiscal 2012, which would create additional revenue streams.
The Company announced its preliminary fiscal 2011 results in a press release dated November 18, 2011. In addition to solid financial performance, the Company successfully executed on its fiscal 2011 plan to expand its property service portfolio, generate new subscriber growth within properties, increase operating efficiency and improve earnings and gross margin. In particular, the Company (i) concluded the transition of the remaining ATTVS properties to its service platform, (ii) significantly increased its portfolio of digital Bulk DTH ("Direct-to-Home") properties and subscribers, which provide guaranteed long-term revenue streams, and (iii) increased its portfolio of digital DTH Choice and Exclusive properties and subscribers, which generate a high average revenue per unit ("ARPU") and high gross profit margins.
The Company will be hosting a conference call and web cast on Thursday, December 15, 2011 at 10:00 am EST to discuss fiscal 2011 financial performance and the above fiscal 2012 initiatives. Information and access to the call is available through the Investor section of the Company's website at www.mduc.com.
About MDU: MDU Communications International, Inc. (OTCBB:MDTV) is a leading provider of premium communication/information services, including digital satellite television and high-speed (broadband) Internet services, exclusively to the United States multi-dwelling unit (MDU) marketplace - estimated to include 26 million residences. Through its wholly owned subsidiary, MDU Communications (USA) Inc., MDU Communications delivers DIRECTV digital satellite television services and high-speed (broadband) Internet systems and is committed to delivering the next generation of interactive communication services to MDU residents. For additional information, please see www.mduc.com or contact Investor Relations.
"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements relating to financial information, property upgrades, strategic partner relationships, subscriber sales, acquisitions, subscriber and revenue growth, implementation of new programs and other developments of the Company. Such statements involve risks and uncertainties which may cause results to differ materially from those set forth in these statements, including, but not limited to, changes in financial condition, efforts on behalf of the Company to finalize and deploy certain programs and close certain acquisitions, performance by partners, fluctuations in operating results and operating plans, deployment of new subscriber growth plans and conversion of existing subscribers, market forces, supplier negotiations and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission, including, but not limited to, the Company's 10-K for the year ended September 30, 2010, filed on or about December 21, 2010.
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