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Cable/Video

Carrier Comes Clean on Triple Play

CHICAGO – Light Reading Live – Ohio-based incumbent carrier CT Communications (not to be confused with CTC Communications Inc. or CT Communications Inc.) has been delivering voice, video, and data to subscribers over its copper network for about two years -- a success story in many ways. But the area's cable competitor, Time Warner Cable, hasn't taken off the gloves just yet.

As with most companies on the cutting edge, CT suffered some bleeding, according to the carrier's director of marketing and sales, Brian Strunk, who spoke to a crowd of attendees at the Light Reading Live Triple Play 2004 conference here on Monday.

In a frank discussion of its experiences as a triple-play provider, Strunk notes that the area's cable competitor has just started digging in. "We've gained new subscribers every month for two years," he says. However, "this is the first month since we've launched that we did not see an increase in customers."

That, of course, also doesn't account for what business may have gone to satellite TV services, which are gaining momentum by offering personal video recorders to their subscribers.

Indeed, things are about to get serious for CT. Time Warner is expected to launch its telephone service in CT's territory in three to six months, according to Strunk. To date, Time Warner has had more digital channels and more movies on demand at a lower price that CT. When phone services debut, surely some subscribers will give it a try, especially as Time Warner has been known to offer deep discounts to convince customers to switch.

Time Warner's tactics aren't surprising. Elsewhere, other cable providers are giving customers inexpensive bundled services in hopes of undercutting incumbent carriers, even while video service margins are being eaten alive by content providers. "We're not going to match the marketing dollars nor the budget of Time Warner," Strunk says. Instead, CT will concentrate on building its ties to the community in hopes that enough will stay loyal to the local business and ignore the advances of a national provider.

CT serves about 12,000 access lines and provides DSL to about 99 percent of its phone subscribers, Strunk says. But its video services only pass about 5,300 homes and have only garnered 750 subscribers in the two years since the service has been available.

Though Strunk says the experience of being a triple-play provider has been positive overall, it was not without hiccups. For instance, the company had some issues with its outsourced sales staff making promises that it couldn't live up to.

Then there were some lessons for CT about what consumers expect from their video service provider. "Customers can go a month without a phone, but they won't go two minutes without their TV service."

Also, the issue of how to acquire the channels and movies that customers want was a challenge. "The [programming] contracts were just a huge issue for us…every one was slightly different."

Eventually, the company chose to buy programming packages from the National Cable TV Cooperative in lieu of trying to offer à la carte channels. "There's not a contract in existence that allows you to do this," Strunk says of such programming.

CT's innovation as an early triple-play provider reinforces some lessons for carriers that are feeling pressured to be a one-stop shop for their customers. "If a carrier gets into video, they all have to go to the same school of hard knocks," says Scott Clavenna, chief analyst at Heavy Reading, the event's moderator.

— Phil Harvey, News Editor, Light Reading

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