Cable Wi-Fi

Cablevision Plots WiFi Market Disruption

Cablevision Systems is looking to use its swiftly expanding WiFi network in the New York metropolitan area to launch products that would "disrupt" the wireless data market.

During the company's first-quarter earnings call Thursday morning, Cablevision Systems Corp. (NYSE: CVC) CEO James Dolan expanded on his hints in earlier earnings calls that Cablevision is cooking up something big on the wireless front. Though he still didn't disclose any specific plans, Dolan indicated that the nation's fifth-largest MSO is working on WiFi products that "will be disruptive to the current market players," particularly in the wireless data market.

"We've been saying for quite some time that WiFi is a differentiator for our business," Dolan said. Now, with Cablevision's Optimum WiFi network boasting more than 100,000 access points and rapidly growing, "I think you're going to see new products, some of which will be disruptive."

Key to Cablevision's plans is the deployment of more powerful WiFi-outfitted "smart routers" in broadband customers' homes. Taking a leaf out of Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s book, Cablevision is furiously installing these data gateways throughout the New York region, because the gateways turn each home into a public hotspot that other broadband users can leverage.

With the deployment of these gateways, Cablevision aims to expand its universe of WiFi access points to 1 million by the end of the year. Employing a similar strategy, the much larger Comcast aims to increase its WiFi network reach from 1 million access points to 8 million by the end of the year. (See Comcast Whips Up More WiFi.)

Dolan said Cablevision has already seen the "total data passed" on its Optimum WiFi network more than double over the past year. Newly named COO Kristin Dolan (the CEO's wife) said more than 1 million "unique Optimum households" used WiFi in the first quarter, up 30% from a year earlier.

Stressing that WiFi is "an unlimited data product" for the MSO, James Dolan also said Cablevision "will continue to push that trend" and will be "aggressive in finding and rolling out new products that ride on the network." He asserted that "there's a lot more traffic that could move to the WiFi network."

The cable company is increasingly emphasizing its WiFi network for growth as, like most other big US MSOs, it continues to gain more broadband subscribers while shedding video subscribers. In the first quarter, for instance, Cablevision added 8,000 high-speed data customers while losing 14,000 video customers.

As a result, Cablevision, with 2.788 million broadband and 2.799 video subscribers, stands poised to become the third major US MSO to have more broadband subs than video subs. In a historic marker for the cable industry, both Time Warner Cable Inc. (NYSE: TWC) and Charter Communications Inc. have already made that shift, indicating that broadband really is cable's future.

In other earnings highlights, Cablevision reported that it gained nearly 8,000 voice subscribers in the first quarter, boosting its total count to almost 2.3 million. However, due to its continued video losses, the overall customer count slipped by 2,000 to just below 3.2 million.

Cablevision's consolidated net revenue climbed 4.3% from a year earlier to $1.58 billion. Consolidated adjusted operating cash flow jumped 24.8% to $434.3 million, and consolidated operating income soared 92.6% to $207.1 million as revenue rose and customer-related costs fell.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

Sign In