Earlier this morning, we released our Q2 results, and we will spend some time discussing our subscriber and financial performance this quarter. But before we begin, I wanted to provide an update on some of our strategic priorities that we have discussed in the past.In the last 40 years, we have made significant investments to create one of the leading entertainment and communications companies in Canada, and Shaw has experienced tremendous growth and success over the history of our organization. However, as our industry matures, cable, telecom and broadcasting entities are challenged to find ways to grow and differentiate their services. We believe that our overall strategy is the correct course of action, and that we are continuing to invest capital, and focus on operational resources, in strategic initiatives that solidify Shaw's position in the competitive environment. Our DNU activities continued throughout the quarter and the reclamation of the analog tiers will enable us to offer our customers unmatched Internet speeds and a greater selection of HD and VOD services. Our Wi-Fi network continues to be constructed, and earlier this year, we launched our Shaw Exo WiFi finder app. We will continue to focus on scaling the network and this remains a priority for us in fiscal '12 and '13. As a technology, Wi-Fi is gathering a lot of attention regarding its role within the broadband and wireless ecosystems. We believe it will further differentiate our broadband experience and increase the value proposition of our Internet services. I also want to reaffirm that based on the government's announcement on March 14 regarding the 700 megahertz auction, we continue to view the economics of the traditional wireless network as unattractive and have no intention of building such infrastructure. We continue to focus on opportunities within the business market in Western Canada. During the quarter, we announced contracts with BC Biomedical Laboratories, Husky's Energy Sunrise Project and the city of Calgary.
Last week, we announced a strategic marketing agreement with Xplornet that will enable us to offer a bundle of services to our Shaw Direct customers. Over time, we believe this partnership will help grow our DTH business and improve the financial performance of our satellite assets.Over the years, Shaw Communications has consistently delivered strong customer results and industry-leading financial metrics. We have faced competitive pressures from IPTV threats for a number of years. However, 2011 was the first year we actually lost cable subscribers. Our major telco competitor has rolled out their IPTV product across the majority of our cable footprint in Western Canada and continues to employ an aggressive market share strategy. This strategy is predominantly focused on heavily subsidized equipment and promotional offers aimed directly at our video customer base. On our last conference call, we discussed a change in our tactics regarding our approach to the competitive environment. Throughout the quarter, we initiated a variety of packages and offers, and the results of these subscriber acquisition strategies are evident in our Q2 results. During the quarter, we added over 60,000 core RGUs compared to 11,000 in Q1 and 30,000 a year ago. Our basic subscriber losses moderated to less than 10,000 this quarter compared to a loss of 23,000 3 months ago. This approach to the competitive environment, including costs associated with staffing, marketing expenditures, and the impact of our subscriber activity over the last quarter has caused financial results to come under pressure. We view the majority of these expenditures as core investments that provides long-term benefits for our company, but we do not anticipate that our cable operating cost structure to be reflective of the Q2 run rate of $450 million going forward. The core of our strategy has always been customer service, and our operations are now fully staffed, including the 3 additional locations in Calgary, Vancouver and Edmonton in December. Call center staff have undergone additional training and have the ability to perform inbound and outbound calling, which will help us manage peak periods of call volume activity. We continue to develop more online, self-serve functionality as another avenue for our customers to reach us. We believe that the majority of our customer service issues are behind us and that reestablishing our reputation as a customer service-focused organization is of utmost importance to us. Read the rest of this transcript for free on seekingalpha.com