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Mediacom to launch 100 Mbps D3 service in Dec.

Fri, 11/06/2009 - 8:00am
Mike Robuck

Mediacom Communications, the nation’s seventh-largest MSO, will roll into the DOCSIS 3.0 realm next month by launching two tiers, including a 100 Mbps downstream offering.

During a third-quarter conference call this morning, John Pascarelli, Mediacom’s executive vice president of operations, said a 50 Mbps service would launch in nine markets, while the 100 Mbps tier will be in two markets. Currently, Comcast is offering a 100 Mbps service in its Twin Cities footprint, with another launch slated for Seattle.

Mediacom plans to have DOCSIS 3.0 in 25 percent of its footprint by year-end, while it has another 25 percent of its footprint DOCSIS 3.0 headend-capable for expanded launches next year.

“This will keep us well ahead of our competitors,” Pascarelli said.

Mediacom is also on track to deliver 40 to 50 HD channels to its subscribers by the end of the year, primarily out of a central headend with another headend for redundancy.

Mediacom, which is headquartered in Middletown, N.Y., has lab tested a multi-room DVR offering and plans to begin field trials later this month. If the trials go well, the multi-room DVR platform will be offered across Mediacom’s entire footprint next year.

As for its third-quarter results, Mediacom’s pro forma revenues increased 4.8 percent to $363.4 million.

Year to date, Mediacom’s after-tax free cash flow increased to nearly $83 million, compared with $2 million a year ago. In the third quarter, the company completed $850 million in refinancing transactions.

Mediacom’s revenue-generating units totaled 6,000 in the third quarter, a far cry from the 68,000 it added in the same quarter a year ago.

“Against the backdrop of a difficult economy and an increasingly competitive video marketplace, I’m pleased to report that in the third quarter, Mediacom continued to produce solid financial results and is on track to deliver record-setting free cash flow for 2009,” Mediacom Chairman and CEO Rocco Commisso said. “We’re not happy with our RGU growth this quarter. We continue to feel the effects of the recession and an increase in aggressive price discounting by satellite backed by heavy marketing campaigns.”

On the video front, Mediacom lost 19,000 basic video subscribers, while year-over-year it has lost 36,000 basic video subscribers. Commisso said Mediacom wasn’t going to get into a price war with DBS providers “having played that game before, [because] it doesn’t win in the end.”

Mediacom expects to win some of those video subscribers back once promotions by DirecTV and Dish Network end. The company also plans on aggressively pursuing bundle deals to keep and win subscribers.

Mediacom’s video revenues increased 2.5 percent, mainly due to customer growth in digital and other advanced video products and services such as DVRs and HD. As of Sept. 30, 37 percent of its digital customers were taking DVR and/or HDTV services.

During the quarter, Mediacom added 7,000 digital customers to end the quarter with 665,000 – a 52.7 percent penetration of basic subscribers. Year-over-year, it gained 52,000 digital customers, representing an 8.5 percent growth rate.

On the high-speed data side of the books, year-over-year revenues increased 10 percent, largely due to the addition of 52,000 high-speed data customers – a 7.3 percent increase – and, to a lesser extent, higher unit pricing.

During the third quarter, Mediacom added 11,000 high-speed data customers to end the quarter with 765,000 – a 27.4 percent penetration of estimated homes passed. By comparison, Mediacom added 24,000 data subscribers in the same quarter a year ago.

Mediacom’s phone revenues grew 22.3 percent, mainly due to a year-over-year increase of 38,000 phone customers, or 16.1 percent. During the quarter, Mediacom added 7,000 phone customers to end the quarter with 274,000 phone customers, or a 10.4 percent penetration of estimated marketable phone homes. In the third quarter of a year ago, the company added 17,000 new phone customers.

Mediacom’s ad revenues were down 15.6 percent, largely due to soft local ad markets, particularly with automobile dealers, and the lack of political ads this year, according to Commisso. 

Total operating costs increased 4.5 percent, primarily due to increases in programming unit costs.

“I’m confident that our business will continue to show its resilience in a very sluggish economy,” Commisso said.

More Broadband Direct 11/06/09:
•  Mediacom to launch 100 Mbps D3 service in Dec.
•  Cablevision adds mobile app for DVR control
•  Knology buys small, nearby operator
•  Clearwire refills executive ranks
•  NCTA offers insight on how FCC can save $2B
•  JDSU reduces loss in fiscal Q1
•  Vecima brings on Funnell, promotes Kumar
•  Krikorian joins Clicker's board
•  Report: Minn. needs significant Internet upgrades
•  Verizon gets 2nd Droid smartphone
•  Stocks surge on jobs data, Cisco's forecast
•  Stocks zigzag on implications of jobs report
•  Broadband Briefs for 11/06/09
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