Cablevision Bounces Back
Rebounding from a lousy third quarter, Cablevision finished 2013 with renewed broadband subscriber growth and lower video customer losses, both of which beat Wall Street projections. (See Cablevision Hits the Wall.)
Surprising analysts who had expected another down quarter, Cablevision Systems Corp. (NYSE: CVC) reported Wednesday that it added 6,000 high-speed data subscribers in the quarter after shedding 13,000 in the third quarter. As a result, it closed out 2013 with nearly 2.8 million broadband customers -- an increase of 17,000 for the year.
Likewise, the fifth-largest US MSO performed better than expected on the video front. It lost 18,000 basic cable subscribers in the fourth quarter after shedding 37,000 in the third. Consequently, it ended the year with about 2.81 million video customers -- down about 80,000 for the year.
Voice customers held steady over the fourth quarter at nearly 2.3 million. For the year, it picked up 8,000 phone customers.
Despite the better-than-expected fourth-quarter numbers, Cablevision posted overall customer declines for both the quarter and the year, due to the continued erosion of its video base. Its total customer count dropped 7,000 for the quarter and 42,000 for the year to below 3.2 million at the end of 2013.
However, a year after Hurricane Sandy wreaked havoc with its operations, Cablevision executives still expressed satisfaction with the company's performance. Thanks to price increases and a scaling back of promotional discounts, fourth-quarter adjusted net revenue climbed 2.3% from a year earlier to $1.6 billion. Adjusted cashflow grew 7.5% to $457 million.
Executives also credited the financial gains to efforts to cut subscriber churn through improved customer service, more effective truck rolls, and operating efficiencies. "We're pleased with the impact on subscriber movement inside the base," CEO James Dolan told analysts on the company's earnings call Wednesday morning. "We have happier customers, and customers that want to stay with us."
Cablevision highlighted continuing progress on the WiFi front. The MSO has already deployed more than 100,000 public WiFi hotspots throughout the New York metro area. Now it is installing more powerful smart routers in broadband customers' homes and focusing on better connectivity within those homes. (See Cable Wi-Fi on a Hot Streak.)
With the deployment of routers that create their own "community hotspots" inside the home, Dolan said, Cablevision in "on track" to hit 1 million WiFi access points by yearend. Though the company is not yet ready to try monetizing its investment in WiFi, that time is coming. (See Top 10 Carrier WiFi Movers & Shakers and Cablevision WiFi Rides NJ Rails.)
"We think connectivity is the most important product to customers," he said. "We think there will be growth opportunities inside of that."
— Alan Breznick, Cable/Video Practice Leader, Light Reading