2. Axia NetMedia Corporation
All around the world high performance
digital networks are being recognized
as critical infrastructure to compete in
the modern global economy.
Progressive regions are and will be
investing in these networks.
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3. Axia offers unlimited access to the global
gateway through an uncompromised,
Real BroadbandTM network model. A model
that is truly open, without conflict and
that offers limitless possibilities for growth.
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4. Axia NetMedia Corporation
growing our French business
Early stage active networks
Construction phase Arras
Networks
Caen.com
Moselle Telecom
Participation
SEM@FOR77
(Seine-et-Marne)
3CNET
(Cosne
sur Loire)
Creusot
Montceau
Networks Grand Chalon
Networks
Grand
Angoulême
Networks
Clermont
Communauté
Networks
Garonne
Networks
Hérault Participation
Coval
Networks (Sicoval)
We are active in France through Covage, a French company jointly owned by Axia Networks France, a wholly
owned subsidiary of Axia, and our French partner, VINCI Networks, a wholly owned subsidiary of VINCI
Construction France. Covage is involved in the acquisition, development, operation and ownership of no
conflict Open Access Next Generation (“OAN NextGen”) networks in France. It currently has 12 networks —
nine networks of which are active or in the early stages of activation and three are in the construction phase.
In fiscal 2008 we embarked on a national fibre backbone connectivity project that will utilize 1,800 kilometres
of existing dark fibre infrastructure creating a ringed network from Arras in northern France to Montpellier in
the south of France. On completion in mid-calendar 2009, this project will connect Covage’s existing networks
to each other and to the main interconnect points in Paris. This national infrastructure project will improve
Covage’s service offering to its current and prospective customers by enabling customers to connect directly
to Paris, the global gateway for France, and enhance Covage’s competitive position with respect to new net-
work prospects. We believe that the development and operation of IP-based networks in France represents a
significant growth opportunity, which will unfold over the next several years.
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5. 31,000 businesses
1,791 communities
4.56 million people
France
The Cheminée de Moretti à la Défense is a well-known architectural sculpture in the la
Défense area in Paris. Created by French painter Raymond Moretti, the “Cheminée d’aération”
is a 30-metre-tall parking vent, clad in coloured glass fibre tubes.
6. Axia NetMedia Corporation
Our business in France continues to evolve and Covage is creating competition, which supports local access
operators and Retail Service Providers (RSPs) as they deliver their IP services to business and retail custom-
ers. Covage is targeting different types of RSPs: (i) small local RSPs offering services on only one network;
(ii) regional and national RSPs offering services on several of Covage’s networks; and (iii) large international
RSPs who target medium and large customers.
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7. market
2007
2008
addressable
4,000 out of 31,000
15,000 out of 31,000
0
5
10
2.5
7.5
Gbps
10
6.2
bandwidth
0
10
20
30
40
RSPs
26
10
The table to the side depicts Covage’s growth in bandwidth as well as the number of RSP customers. In
terms of Covage’s business metrics, we measure market penetration by tracking Broadband revenue
in the context of Covage’s addressable market. We define addressable market as business and govern-
ment sites that have at least one employee within 500 metres from the existing network. As at June 30,
2008, the addressable market was approximately 15,000. Covage expects that its addressable market
will be approximately 31,000 upon completion of the currently planned network investments. When all
of Covage’s networks are operational, we expect that with an adoption of 3% to 5% of the addressable
market, our Broadband revenue will cover our operating costs. With 15% of the addressable market, we
5
would earn approximately a 20% return before tax on our capital investment.
8. Alberta
Axia NetMedia Corporation
429 communities
2,073 learning facilities
309 library facilities
400 health facilities
1,300 government facilities
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9. critical infrastructure for a progressive province
Fibre Network
Wireless
The Government of Alberta (GoA) had a vision to make global connectivity available to all Albertans whether
they lived in rural or urban areas. Thanks to Axia’s innovative solution, the GoA has a state-of-the-art IP
network that connects 429 communities and provides direct connectivity to over 4,200 government, learn-
ing, health, library and municipal locations. The Alberta SuperNet uses Axia’s OAN NextGen model which has
created a competitive environment for RSPs who want to deliver ultra-high-speed services, including Internet
access, to their retail and business customers even in rural areas. In fiscal 2008, we placed substantial focus
on connecting new customers to the Alberta SuperNet and increasing bandwidth commitments from existing
customers. As a result, we are experiencing growth in bandwidth usage in the government and RSP sectors.
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10. Axia NetMedia Corporation
non-
bandwidth government RSPs with # of communities
This table highlights our progress as we connect more customers to the Alberta SuperNet and grow
Gbps bandwidth active with RSPs
Gbps connections
60 14 70 260
2008
58 254
67
13.2
55 13 65 250
bandwidth commitments from existing customers.
50 12 60 240
50
59
11.7 225
45 11 55 220
2007
40 10 50 200
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11. Using the Alberta SuperNet as their backbone, RSPs are penetrating the Alberta resource and enterprise
sector. RSPs are an important component of the Alberta SuperNet’s future growth and we are working closely
with them to grow their bandwidth requirements.
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13. We are pursuing opportunities on a similar
or larger scale than the Alberta SuperNet.
Real Broadband™ is recognized as critical infrastructure for staying competitive in the 21st century digital
economy. Axia’s no conflict OAN NextGen model is gaining worldwide recognition.
As a result of our success in Alberta and France, we are pursuing potential OAN NextGen opportunities
of varying stages in other jurisdictions around the world. Currently these opportunities consist of bid and
proposal responses in Singapore and Australia. We also continue to have preliminary discussions in the Middle
East and North America.
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14. Axia NetMedia Corporation
letter to shareholders
Dear Fellow Shareholders:
The evolution of the telecom sector is driven by the ever-growing consumer demand for web services that
depend on global digital IP connectivity. It is clear that, from cost, connectivity and performance perspec-
tives, region-wide fibre grids combined with wireless technologies for local connectivity create a future-proof
technical and commercial approach. End users do not want the challenge of integrating technology to make
it work; they want easy to use, high-performing, low-cost services targeted at their needs. The new success
stories in the Internet sector have a growing dependence on no-compromise ubiquitous connectivity between
service providers and end users. End users and new web service providers like Google and Facebook are
influencing public policy. Separating the transport/connectivity role from the web services role is now topical
in progressive jurisdictions.
Axia’s business is strategically aligned with the above fundamentals. We use a no-conflict open access
approach to the transport/connectivity segment. This enables the role of fibre optic technology to be optimized
while complementing the role of wireless technology. It also enables the web services sector to offer services
to end users without having to compete with the transport/connectivity sector. These two sectors – the trans-
port/connectivity sector and the web services sector – depend on different core competencies and focus and
are naturally complementary if one thinks of the end user first. This approach also allows the appropriate
regulatory oversight on the transport/connectivity services while allowing competition and the entrepreneurial
evolution of web services based on the choice of the end users.
Axia has proved that applying these principles in the rural/remote sector is working through the Alberta
SuperNet. Axia is on plan for demonstrating that our approach is successful in medium density regions through
Covage’s operations in France. We are confident that the same fundamentals, which we have incorporated into
our Singapore proposal, are the key to successful Next Generation Network implementations in metropolitan
centres.
The Alberta SuperNet
The Alberta SuperNet is an excellent reference point on how Axia’s OAN NextGen network model can bridge
the Digital Divide between rural and urban communities. Operationally this year, we placed substantial focus
on connecting new customers to the Alberta SuperNet and increasing bandwidth commitments from existing
customers which resulted in increased bandwidth usage by the government and RSP sectors.
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15. We launched a Gigabit Ethernet Service for our government customers who require large amounts of band-
width and a Critical Infrastructure Service for customers who need a SuperNet connection with 99.999% ac-
cess and network availability.
In the RSP and enterprise sector, we launched Axia Broadband Connection Services to facilitate connec-
tions to the Alberta SuperNet and we are working closely with them to grow their bandwidth requirements.
New regional and national RSPs were recruited in 2008 and we anticipate that this will significantly enhance
the growth potential of the Alberta SuperNet.
France – Covage
In France, our OAN NextGen model provides transport/connectivity services through regional networks.
Nine networks are active or in the early stages of activation. We expect to activate Grand Angoulême and
SEM@FOR77 in the fall of 2008 and Hérault Participation in the summer of 2009. Our results from Covage
increased dramatically since fiscal 2007 which reflect both the increase in the number of networks reporting
revenue as we have now transferred the majority of our network interests into Covage and from bandwidth
sales to our RSPs. In fiscal 2008 we increased the number of Covage’s RSP customers from 10 to 26 and grew
our bandwidth to 10 Gbps from 6.2 Gbps at the end of fiscal 2007.
We continued to strengthen our France business with Covage’s national fibre backbone connectivity
project. The project will be completed by mid-calendar 2009 and utilize 1,800 kilometres of existing dark fibre
infrastructure to create a ringed network from Arras in northern France to Montpellier in the south of France.
We believe that the national network will create an attractive value proposition for national operators and large
corporate and government customers.
Currently, Covage has four additional OAN NextGen bids outstanding with decisions expected by the
end of calendar 2008. Covage continues to review new opportunities in light of the capital markets and the
slowdown in the French economy. Potential opportunities are selected if they complement Covage’s existing
operations, the national backbone from a geographical perspective and their economic potential given the
investment climate.
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16. Axia NetMedia Corporation
International Business Development
As a result of our success in Alberta and France, we are pursuing potential OAN NextGen opportunities in
other jurisdictions around the world. Currently these opportunities consist of bid and proposal responses
in Singapore and Australia. We also continue to have preliminary discussions in the Middle East and
North America.
Axia is the lead member of the OpenNet consortium with a 30% interest. Our partners are Singapore Tele-
communications Limited (30%), Singapore Press Holdings (25%) and SP Telecommunications Pte Ltd (15%).
OpenNet has submitted a response to the Infocomm Development Authority (“IDA”) of Singapore’s RFP for the
rights to construct and provision passive fibre grid services throughout Singapore. This is the first part of the
IDA’s competitive bid process for a complete Next Generation National Broadband Network. We are qualified
to respond to the second RFP for the provision of active broadband services over the fibre grid with submis-
sions due before the end of this calendar year.
In April 2008, the Government of Australia issued a Request for Proposal to roll out and operate a national
network. We have qualified to respond to an RFP for Next Generation Network implementation(s) in Australia.
Submissions are now expected to be delivered in late calendar 2008.
Axia’s people
One of the highlights this year was Axia being named Canada’s Best Small and Medium Employer in a nation-
wide study. At Axia, we believe that to be a successful, high-performing company we must excel when judged
from the perspective of our customers, shareholders and employees. Our team approach and our employees’
sharing of intellectual capital and knowledge are crucial to the success of our business.
We continually strive to create collaborative high-performing teams composed of individuals with comple-
mentary knowledge and skills. Axia has business unit teams in Alberta and France that are supported by a tight
corporate group. We believe that this approach reinforces our customer focus and recognizes each market’s
local character. Each time Axia is successful in securing an OAN NextGen opportunity in a new market, we will
add another dedicated business unit team while maintaining the same organizational approach.
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17. Outlook
Next Generation Network opportunities typically involve deploying substantial capital in return for long-term
reliable profits. The opportunities available to Axia are growing at a time when traditional debt and equity capital
markets are, to say the least, unreliable. Axia’s Management and Board assess the attractiveness of each new
opportunity taking into account the value of momentum and market position and Axia’s role with respect to
deploying capital. At the same time, Axia’s Management and Board remains vigilant in considering the potential
dilution shareholders may face as a consequence of Axia choosing to raise capital in the current environment.
Axia plans to maintain its strong balance sheet approach. Management and the Board will consider all these
factors as the Corporation seeks the path that it believes will maximize shareholder value.
On behalf of the Board of Directors, I would like to take this opportunity to thank our customers who
continue to experience the value in our solutions, our dedicated employee team for their contributions and our
shareholders for their support.
Art Price, Chairman and CEO
September 18, 2008
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18. Axia NetMedia Corporation
Axia provides Real Broadband™
IP services and solutions through
planning, designing and operating
no conflict Open Access Next
Generation Networks. We lead
by example having created the
Alberta SuperNet, which we believe
is the world’s best regional IP
broadband network. We are now
exporting our solution to France
and other regions around the world.
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19. corporate information
corporate directors lawyers
Art Price (Chairman) McCarthy Tétrault LLP
Charles W. Brown Calgary, Alberta
C. Kent Jespersen
Robert L. Phillips auditors
John Read KPMG LLP
Calgary, Alberta
William Smith, QC (Corporate Secretary)
stock exchange listing
executive team Toronto Stock Exchange “AXX”
Art Price – Chief Executive Officer
Peter L. McKeown – Chief Financial Officer
head office
Mark Blake – Vice-President, Global Business
Axia NetMedia Corporation
Development and Marketing
3300 450 1st Street SW, Calgary, AB T2P 5H1
Corinne Hua – Vice-President, Finance and Controller
T 403.538.4000
Jim Lindberg – Vice-President, Alberta Operations
F 403.538.4100
Drew McNaughton – Chief Technology Officer
For more information: info@axia.com
Dave Mullins – Vice-President, Alberta Sales
www.axia.com
Jean-Michel Soulier – President, Axia Networks France
Nicole Springer – Vice-President and General Counsel
Dawn Tinling – Vice-President, Investor Relations annual meeting
and Communications Thursday, November 13, 2008
3:00 p.m. (Mountain)
Calgary Chamber of Commerce
transfer agent
100 6th Avenue SW,
Computershare Trust Company of Canada
Calgary, Alberta
Calgary, Alberta
bankers
HSBC Bank Canada
Calgary, Alberta
Axia’s Management’s Discussion & Analysis, Audited
Consolidated Financial Statements and Notes for the
year ended June 30, 2008 have been reviewed and
approved by the Corporation’s Audit Committee and
Board of Directors. These reports were filed on SEDAR
and posted to www.axia.com on September 22, 2008.
design and production by Equicom, a TMX Company.
20. Axia NetMedia Corporation
3300 450 1st Street SW, Calgary, AB T2P 5H1
T 403.538.4000
F 403.538.4100
For more information: info@axia.com
www.axia.com