Eagan Predicts Higher Churn At Comcast
Collins Stewart Analyst Believes Top Op’s Q4 Subscriber Losses Will Widen
By Mike Farrell -- Multichannel News, 11/22/2008 5:00:00 PM
Collins Stewart media analyst Tom Eagan reduced his fourth-quarter subscriber estimates for Comcast, writing in a report that basic video and telephone subscriber churn should rise.
Eagan now believes Comcast will lose as many as 125,000 basic customers in the fourth quarter (he previously estimated a loss of 90,000 basic customers), based in part on increased losses in the third quarters of the year. Comcast shed 147,000 basic customers in the third quarter.
Eagan believes that the decline was the result of several factors — increases in bad debt and housing foreclosures have led to involuntary churn and its lower number of HDTV channels has caused some customers to switch to satellite.
Eagan expects Comcast to add 399,000 digital phone customers in the fourth quarter, versus the 569,000 additions he previously predicted. He pointed to wireless substitution — customers who are disconnecting land lines in favor of cellphone service — and competition.
Comcast has acknowledged increased competition from AT&T's U-Verse service affected growth in the third quarter. And cable companies don't seem to be adding phone customers at the same rate that the phone companies are losing access lines. Telco access line losses in the third quarter were up (to 1.8 million) while Comcast's phone adds were down (483,000 vs. 499,000 in the second quarter).
“With Comcast's phone churn down (according to management), this means that the company added fewer gross adds in 3Q08,” Eagan wrote. “With 4Q08 holidays reducing the number of installation days, we expect fewer gross adds in 4Q08 than 3Q08.”
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"Telco access line losses in the third quarter were up (to 1.8 million) while Comcast's phone adds were down (483,000 vs. 499,000 in the second quarter)"
Does it make much sense to compare an entire 100+ year old industry against 1 MSO that only started in this business a few years ago.
Anonymous - 11/24/2008 8:06:00 AM EST
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