Mediacom’s Q1 revenues fueled by data, phone growth

Mon, 05/11/2009 - 9:00am
Mike Robuck

Despite the faltering economy, Mediacom Communications saw its revenues increase by 6.1 percent to $360.4 million for the first quarter that ended March 31.

Mediacom, the nation’s seventh-largest MSO, attributed its increased revenues to growth in its high-speed data and phone customers and, to a lesser extent, higher advanced video service fees.

On the high-speed data side of the ledger, revenues increased 14 percent, primarily due to a 10.6 percent year-over-year increase in unit growth. During the quarter, high-speed data customers grew by 24,000, compared with a gain of 30,000 in the prior-year period, ending the quarter with 748,000 customers, or 26.8 percent penetration of estimated homes passed.

Phone revenues grew 36.4 percent, mainly due to a 28 percent year-over-year increase in phone customers and, to a lesser extent, a reduction in discounted pricing. During the quarter, phone customers grew by 14,000, as compared with a gain of 19,000 in the prior-year period, ending the quarter with 259,000 phone customers, or 10 percent penetration of estimated marketable phone homes.

Video revenues increased 3.5 percent in the first quarter, largely due to higher service fees from Mediacom’s advanced video products and services, including DVRs and high-definition TV. During the quarter, the company added 4,000 basic subscribers, as compared with an increase of 2,000 basic subscribers for the same period last year.

During the quarter, digital customers grew by 17,000, compared with an increase of 27,000 in the prior-year period, ending the quarter with 650,000 customers, or 50.1 percent penetration of basic subscribers. As of March 31, 35 percent of Mediacom’s digital customers were taking DVR and/or HDTV services.

Mediacom said its advertising revenues were down 14 percent, largely as a result of a sharp decline in automotive and local advertising.

Total operating costs grew 6.4 percent, mainly due to increases in programming unit costs and, to a lesser extent, higher expenses relating to employee staffing and phone service costs, offset in part by a reduction in vehicle fuel and repair expenses.

Revenue-generating units (RGUs) grew sequentially by 59,000, 74 percent higher than the unit growth in the fourth quarter of last year.

“We had an unexpectedly good start to 2009, particularly given the continuing poor economic conditions,” said Mediacom Chairman and CEO Rocco Commisso. “Our strong rebound in RGU additions from the fourth quarter of 2008, coupled with effective control of operating expenses and capital investment, led to record quarterly free cash flow. Though cautious about our operating results for the remainder of the year, we are confident in our ability to deliver at least $1.00 per share of after-tax free cash flow in 2009.”

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