Pali Capital analyst Richard Greenfield took it a step further in a research note today, predicting that revenue generating unit (RGU) net additions at Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC) could drop "at least" 20 percent to 30 percent in 2009, "even with the benefits of the digital TV transition and the forced conversion of certain markets to all-digital." (See DTV Transition Could Catalyze Cable, Comcast Seeds Digital Shift With Free Boxes, and Free Cable! )
Overall, he expects ARPU (average revenue per user) growth to slow to the low-to-mid single digits in the midst of surging competition and as cable customers tighten their belts and downgrade the service tiers they are taking today.
He said an expected slowdown of telephony net additions "is particularly concerning," given the service's high margin and positive impact on customer churn.
And what about capex heading into '09? Vendors are still waiting to find out the what next year has in store, but Greenfield expects core capex to dip to the "mid-high single digits," a figure that does not factor in wireless spending linked to the Clearwire LLC (Nasdaq: CLWR) venture. (See Does Cable Really Need Wireless?, Cable Plays Clearwire Card and Clearwire, Sprint Complete Merger.)
Guess it's a good thing that MSOs view business services as an essential priority. Revenue growth has to come from somewhere. (See A Tale of Two MSOs , Cable's Biz Battle: HFC vs. Fiber , and Cox Biz: Cable's Next Billionaire? .)
— Jeff Baumgartner, Site Editor, Cable Digital News