Suddenlink loses more basic video customers in Q2; revenues rise
Suddenlink Communications lost 24,400 basic video customers in the second quarter, but it did see its revenues spike up by 7.2 percent in the quarter.
Suddenlink attributed the loss of basic video subscribers to the "seasonal nature" of the recently acquired NPG Cable properties. On the plus side, Suddenlink added 6,200 digital video customers in the quarter.
Second-quarter revenues of $482 million grew 7.2 percent compared with pro forma second-quarter revenues of the prior year. Pro forma revenues for the first six months of 2011 of $957.5 million grew 7.6 percent compared with the first six months of the prior year.
Suddenlink's revenue-generating units (RGUs) increased 190,200 on a pro forma basis year-over-year, or a 6 percent gain from the same quarter a year ago. Total average monthly revenue per basic video customer (ARPU) for the second quarter was $124.74, an increase of 10 percent compared with pro forma ARPU for the second quarter of last year.
Suddenlink's video service revenues increased 2 percent, primarily due to basic video rate increases, increased premium and VOD service revenues, and customer growth in the company's digital and advanced video services, offset in part by a lower number of basic video customers and digital customers purchasing fewer digital tiers of service on average.
Suddenlink has been building out its DOCSIS 3.0 footprint through its Project Imagine, but despite the increased speeds in some systems, the nation's seventh-largest cable operator lost 4,600 residential data subscribers.
Suddenlink said the drop in residential data subscribers in the second quarter was due to seasonal losses, including significant seasonality in its NPG Cable properties, and a weaker economy.
During the second quarter of 2011, commercial Internet customers increased by 1,000 and commercial fiber customers increased by approximately 30.
High-speed Internet service revenues rose by 12 percent, due to an increase in residential high-speed Internet customers over the trailing 12 months, the impact of rate increases, and growth in Suddenlink's commercial high-speed Internet services to small- and medium-size businesses.
Residential phone customers increased by 12,200 during the second quarter. Telephone service revenues increased 22 percent, mainly due to an increase in residential telephone customers and growth in Suddenlink's commercial telephone services to small- and medium-size businesses.
Project Imagine calls for approximately $350 million of capital investments nationwide through 2012, above and beyond the company's traditional capital spending levels. In addition to the DOCSIS 3.0 tiers, Project Imagine's roadmap also includes more HD choices, expanded digital phone service and more VOD offerings.
Suddenlink said in its second-quarter earnings that it had completed approximately 70 percent of its anticipated capital expenditures for Project Imagine, and it expects to be 80 percent complete by year's end.
"We continue to experience exceptional growth in revenues and adjusted EBITDA, despite a very challenging economic environment," said Suddenlink's Chairman and CEO Jerry Kent. "We generated our nineteenth consecutive quarter of pro forma revenue growth, while successfully integrating nearly 90,000 new customers. Our revenue per customer growth exceeded our expectations, Project Imagine's execution continues as planned, and we've brought some new and exciting services to our customers that should give us a competitive advantage."