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Cogeco Posts Much Stronger Quarterly Gains

Such giant North American MSOs as Time Warner Cable, Cox Communications, Comcast Corp. and Cablevision Systems are not the only ones enjoying across-the-board gains in subscribers from the rollout of voice-over-IP (VoIP) services. Some mid-sized cable operators in the U.S. and Canada are starting to realize the benefits too. Consider Cogeco Cable, Canada's fourth biggest cable operator with slightly over 830,000 basic service customers. The Montreal-based MSO reported Monday that it netted about 48,000 revenue generating units (RGUs) in its fiscal third quarter ending May 31, up from just under 6,400 new RGUs a year earlier, thanks largely to what it calls the "snowball effect" of VoIP and discounted three-product bundling. Cogeco added more than 15,000 IP phone customers in the spring quarter, nearly doubling its total to 32,000, as it extended telephony service deeper into its Ontario and Quebec territories. With its latest rollouts, the company now offers VoIP service to about 50% of its homes passed in the two adjacent provinces. At the same time, Cogeco added almost 24,000 digital video customers, more than five times as many as the year before, and over 12,000 cable modem subscribers, more than twice as many as the year before. It also lost slightly fewer basic cable customers than it did a year ago. As a result of these strong subscriber gains, Cogeco boosted its full-year outlook for both customer and revenue growth. The MSO now expects to add 45,000 to 50,000 VoIP subscribers for all of fiscal 2006, up from its earlier projection of 32,000 to 37,000. It expects to net 55,000 to 60,000 high-speed data customers for the year, up from 47,000 to 49,000 previously. And it expects to sign up 75,000 to 80,000 digital video subscribers for the year, up from 59,000 to 62,000 before.
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