News

Top 25 MSOs

8/11/2002 8:00 PM Eastern

1 AT&T BroadbandBasic Subscribers: 13.256 millionAT&T Broadband will cease to exist sometime later this year, if Comcast Corp.'s acquisition of the MSO gains expected regulatory approvals. In the meantime, AT&T has been making some progress on its goal of improving cash flow margins. A 5 percent gain reported at the end of the second quarter brought margins to 25.4 percent, on average. The same second quarter report pegged 105,000 new telephony subscribers for AT&T, along with 202,000 new digital video subs and 137,000 new high speed data customers. Along with the good news, however, AT&T Broadband reported a second quarter decline of 125,000 basic subs, blaming the decline on competition, seasonal service disconnects and increased apartment vacancies in certain markets. At the same time, AT&T Corp. announced it had taken a $13.1 billion write down, incurred after the telecommunications giant reassessed the carrying value of its broadband cable segment. The reassessment followed the company's adoption in January of a stricter accounting standard. Although most of AT&T subscribers are expected to become part of AT&T Comcast by next year, about 320,000 will be spun off to Bresnan Communications.Bill Schleyer, president & CEO188 Inverness Drive WEnglewood, CO 80112303.858.3000 www.attbroadband.comBasic Penetration: 53%Pay units/penetration: 11.462*/84.5%*Digital subs/penetration: 3.933 million/29.7%High Speed Subs: 1.762 million/penetration: 11%Telephony subs: 1.220 million/penetration: 16%2001 Revenue: $9.2 billion2001 EBITDA: $1.8 billion Est. 2002 Revenue: $10.12-10.3 billionEst. 2002 EBITDA: $1.8 billionRevenue per sub: $55.18/month* Paul Kagan Associates2 Time Warner CableBasic Subscribers: 12,847,377 It's been a challenging year for this MSO, thanks to turmoil at parent AOL Time Warner and the impending loss of more than 2 million subscribers. The latter stems from the restructuring of a partnership with Advance Newhouse. To free Time Warner Cable from sharing in its parent's heavy debt obligations, the communications giant hopes to spin off the MSO in an IPO, a move that will enable TWC to consider acquiring more systems. Despite all the distractions from above, Time Warner Cable CEO Glenn Britt plans to focus the MSO more squarely on the consumer next year. "TWC must not only push to offer new and innovative services," he said, "but it must work to become an essential part of the fabric of the communities it serves." He sees improving communications with the consumer and building deep and enduring relationships with each and every Time Warner customer as the way to achieve this. Among new services, VOD will take center stage next year. Time Warner will leverage its system-wide deployments by offering VOD movies, subscription VOD programming and VOD as a free add-on to increase digital penetration. Several other new services are also in the pipeline, including IP-based voice services (scheduled to begin rolling out later this year), home networking and personal video recording capability in the set top. Longer-term projects are ITV and networked PVRs.Glenn Britt, chairman/CEO290 Harbor Dr.Stamford, CT 06902203.328.0600www.aoltimewarner.comNYSE symbol: AOLBasic Penetration: 59.2%Pay subs/penetration: 3,932,843/18.1%Digital subs: 3,863,650High-speed subs/penetration: 2.5 million/13.3%Telephony subs/penetration: Test marketed only2001 Revenue: $6.99 billion 2001 EBITDA: $3.19 billionEst. 2002 Revenue: $8.04 billion*Est. 2002 EBITDA: $3.65 billion*Revenue per sub: $62/month*Banc of America Estimates3 Comcast Cable CommunicationsBasic Subscribers: 8.501 millionComcast's merger with AT&T Broadband awaits final regulatory approval by the FCC and Justice Department, with both expected by year's end. Steve Burke. president of Comcast Cable, will head the combined company's cable operations, which will be managed by 32 field executives and divided into six regions: Atlantic, Eastern, Southern, Mid-Western, Mountain and Western. Once consummated, the merger will create a broadband services giant, with customers in 41 states and a major presence in 17 of the 20 largest advertising DMAs. Management's first goal is to boost cash flow margins at former AT&T systems to industry standards. Company leaders have also promised to provide a local telephone alternative. Next year, AT&T Comcast plans to add VOD offerings in more clusters and to add HDTV channels in several top markets. The new company plans to take a leading role in advancing the adoption of open technology standards for cable.Steve Burke, president1500 Market Street,Phila., PA 19102215.685.1700www.comcast.comNASDAQ symbol: CMCSK, CMCSABasic Penetration: 60.6%Pay units/penetration: 8.553*/101%*Digital subs/penetration: 1.981 million/23.4%High Speed Subs: 1.169 million/10% 2001 Revenue: $5.289 billion2001 EBITDA: $2.112 billion Est. 2002 Revenue: /$5.871billion**Est. 2002 EBITDA: 2.3887 billion**Revenue per sub: $60.38/month *Paul Kagan Associates**Calculated from information in Comcast 1002 pro forma results statement4 DirecTVBasic Subscribers: 10.7 million DirecTV parent Hughes Communications hopes its planned sale of the country's largest satellite operator to its rival EchoStar will clear regulatory hurdles by the end of this year. The merger will enable the combined company to significantly increase its satellite capacity by eliminating duplicative programming services. This would allow the merged company to offer more programming to consumers, including local channels in all 210 designated market areas in the country. DirecTV predicts it will net 1.2 million new subscribers for 2002 as a whole. By the end of the year, DirecTV parent Hughes will decide what to do with its Latin American and DSL businesses—which together are expected to lose $245 million to $295 million this year. Eddy Hartenstein, chairman/CEO2230 E. Imperial HighwayEl Segundo, CA 902451.800.DIRECTV www.directv.comOwnership: Hughes Electronics Corp. DSL subs/penetration: 100,000/1%2001 Revenue: $5.55 billion2001 EBITDA: $208 millionEst. 2002 Revenue: $6.3 billionEst. 2002 EBIDTA: $525-$545 millionRevenue per sub: $56/month5 Charter CommunicationsBasic Subscribers: 6,804,800 Closely-held Charter Communications has been considering becoming a privately owned company in recent weeks, a response to Wall Street's battering of the heavily leveraged cable operator's shares. The stock price drubbing came despite the fact that Charter has been pacing ahead of most MSOs in marketing advanced video services. VOD, HDTV and interactive TV are now widely available to Charter subscribers, and management reports that about 20 percent of digital customers buy roughly 2.5 VOD movies per month. Next year, Charter will center its growth strategy around bundling advanced video services with high speed access. "We've distinguished ourselves with tiered modem speeds and pricing," said Charter president and CEO Carl Vogel. "We'll continue to bundle our services to beat back the competition with compelling, value-added offerings."From an execution standpoint, Charter will also attack digital churn by continuing to update and add to its Digital Activation campaign. This features mailers, coupons and three CSR call backs within the first ten days of digital installation to head off problems customers have using the product.Carl Vogel, president/CEO12405 Powerscourt Dr.St. Louis, MO 63131314.965.0555www.charter.comNASDAQ symbol: CHTRBasic Penetration: 57.8%Pay units/penetration: 6.036 million*/86.8%*Digital subs/penetration: 2,208,900/20.3%High-speed subs/penetration: 747,700/9.5%ITV homes: 550,0002001 Revenue: $4.1 billion2001 EBITDA: $1.83 billionEst. 2002 Revenue: $4.6-$4.7 billion Est. 2002 EBITDA: $2.035-$2.07 billion Revenue per sub: $53.07/month*Paul Kagan Associates6 EchoStar CommunicationsBasic Subscribers: 7.16 million EchoStar expects to obtain approval by October for its planned acquisition of satellite TV rival DirecTV. The process took a step forward in July, when the FCC announced it had received requested documentation from EchoStar and promised to wrap up its consideration of the merger in the next few months. DISH is expected to borrow a substantial sum to pay General Motors $4.2 billion for DirecTV. (If the merger is disallowed, EchoStar has pledged to buy 81 percent of satellite service PanAmSat from GM's Hughes Electronics division.) Both Hughes and EchoStar insist that the merger is the only way satellite TV can remain competitive with cable and that it is essential if satellite is to offer an economically viable Internet service. After the merger, the combined company would control about 17 percent of the subscription TV market. Once duplicative programming services are eliminated, the merged company plans to expand its channel offerings, including providing local outlets in 210 markets. EchoStar plans to soon begin offering its own high speed access service. Until now, partnerships with SBC and Earthlink have allowed it to bundle Internet connections in with its other services. Charles Ergen, chairman/CEO5701 S. Santa Fe DriveLittleton, CO 801201.800.333.DISHwww.dishnetwork.comNASDAQ symbol: DISH2001 Revenue: $4 billion2001 EBITDA: $511 millionEst. 2002 Revenue: $4.8 billion Est. 2002 EBITDA: $779 million*Revenue per sub: $49.32/month* Lehman Bros.7 Cox CommunicationsBasic Subscribers: 6,250,036 Cox plans to return to fundamentals in 2003 to address the fall of its stock price and erosion of the market's confidence in the cable industry. Company president and CEO Jim Robbins broke down priorities into five categories: growth, competition, productivity, talent and last but not least, financial discipline. With a new brand strategy called "Your Friend in the Digital Age," Cox hopes to add more basic, high-speed Internet and telephone subscribers. The company also expects to get a boost by expanding high-speed data services to small and mid-sized businesses in 12 markets, offering a choice of seven different tiers of speed and pricing. As digital homes increase, so does interest and potential growth in new interactive services, Robbins noted, but customer care and service are the keys to arresting churn and beating satellite in the marketplace. Cox announced recently that it is launching HDTV service in Las Vegas, after rolling the option out earlier to subscribers in Omaha. In Vegas, the HDTV lineup includes the local CBS and PBS channels plus HBO, Showtime and Discovery High Definition Theater. Jim Robbins, president/CEO1400 Lake Hearn Dr.Atlanta, GA 30319404.843.5000www.cox.comNYSE symbol: COXBasic Penetration: 62.6%Premium subs/penetration: 1,830,985/29.4%Pay units/penetration: 4.098,881/65.7%Digital subs/penetration: 1,500,000/24.5%High-speed homes/penetration: 1 million/10.7%Telephony homes/penetration: 516,301/14.5%2001 Revenue: $4.064 billion2001 EBITDA: $1.569 billionEst. 2002 Revenue: $4.95 billion-$4.99 billion*Est. 2002 EBITDA: $1.77 billion-$1.79 billion*Revenue per sub: $58/month* Calculated from Cox Communications pro forma statement8 Adelphia CommunicationsBasic Subscribers: 5,800,000*It's difficult to predict what lies ahead for the sixth largest cable operator, now mired in one of the worst financial scandals in U.S. corporate history. Following the disclosure of $2.3 billion in debts not listed on its balance sheet, Adelphia Communications filed for Chapter 11 bankruptcy protection on June 25, listing assets of $24.6 billion and liabilities of $18.6 billion (not including the off-sheet debts). The Coudersport, Pa.-based company secured $1.5 billion in financing on June 21 to continue operating, but major sell-offs of cable assets appear inevitable, as chairman and interim CEO Erland Kailbourne works to satisfy creditors and reduce debt. Adelphia has solicited bids for several major systems, including holdings in Los Angeles and Florida. Suitors include former Charter president Jerry Kent, who is said to be raising equity financing, and possibly Advance/Newhouse.Meanwhile, Adelphia founder and former chairman John Rigas and sons Michael and Timothy have been charged with wire, mail and bank fraud and face civil charges for falsifying public documents. Erland E. Kailbourne, chairman/Interim CEO 1 N. Main St.Coudersport, PA 16915814.274.9830www.adelphia.netPublicly tradedBasic Penetration: 62%*Pay subs/penetration:Digital subs/penetration: 2,300,000*/40.5%*High-speed subs/penetration: 570,000*/8.7%*2001 Revenue: $1.42 billion* 2001 EBITDA: $1.379 billion*Est. 2002 Revenue: $1.42 billion*Est. 2002 EBITDA: $1.607 billion*Revenue per sub: $44.91/month**All data are estimates from Banc of America and are as of second quarter '02. Subscriber figures are estimates only, made before recent disclosures admitting the company had inflated subscriber figures by about 50,000 subs. 9 Cablevision SystemsBasic Subscribers: 3,000,950 Squeezed by a potential funding shortfall of between $550 million and $1 billion next year, Cablevision Systems has announced it will redeem all outstanding shares of its Rainbow Media Group tracking stock. Many believe the move is a prelude to sale of the operator's programming assets, which include AMC, Bravo, WE: Women's Entertainment, Independent Film Channel and MuchMusic USA.On the operating side, Cablevision has assembled the widest amount of deployed VOD content in the industry, as part of its iO: Interactive Optimum service. The MSO expects 125,000 to 150,000 iO subscribers by year-end and claims two-thirds of its current subs are using VOD each month, accessing free or paid-for content an average of nine titles per consumer. Cablevision maintains it has also benefited from advancements in its custom-designed Sony Corp. set-top box, which allows an integrated VOD and programming menu. The menu helps clarify which programs are free and which cost extra. IP telephony and additional interactive services are next on the drawing board, according to Tom Rutledge, president of Cablevision's New York Metropolitan area.James Dolan, president/CEO1111 Stewart Ave.Bethpage, NY 11714516.803.2300www.cablevision.comNYSE symbol: CVCBasic Penetration: 69.1%Pay units/penetration: 7.100 million*/236%*Digital subs/penetration: 24,100/3.5%High-speed subs/penetration: 559,765/17.9%Telephony subs/penetration: 13,120/8.3%2001 Revenue: $4.1 billion 2001 EBITDA: $1.83 billionEst. 2002 Revenue: $4.6-$4.7 billionEst. 2002 EBITDA: $2.035-$2.07 billionRevenue per sub: $51.40/month*Paul Kagan Associates10 MediacomBasic Subscribers: 1.6 million By June of next year, Mediacom expects to have upgraded 98 percent of its network to hybrid fiber-coaxial architecture with most systems at 550 MHz or greater. Management priorities for next year call for readying additional markets to receive digital TV and high speed data, so that more than 90 percent of homes passed by the company's network will be capable of offering these services. After launching its own high-speed Internet service, called Mediacom Online, early this year, Mediacom will continue to focus on building this new brand name. In addition, the company expects that VOD services will be available to 20 percent of its digital customers by year-end 2002 and that it will begin to test cable telephony by early 2003. Financially, Mediacom is well positioned with $1 billion of unused credit lines. It expects to achieve positive free cash flow (or EBITDA minus capital expense minus interest expense) by the second half of 2003.Rocco B. Commisso, chairman/CEO 100 Crystal Run Rd.Middletown, NY 10941845.895.2600www.mediacomcc.comNASDAQ symbol: MCCCBasic Penetration: 60.2%Digital subs/penetration: 329,000/23.1%High-speed subs/penetration: 127,000/8.1%2001 Revenue: $834 million2001 EBITDA: $328 millionEst. 2002 Revenue: $923-$931 million Est. 2002 EBITDA: $380-$385 million Revenue per sub: $48/month11 Insight CommunicationsBasic Subscribers: 1,291,000Double- and triple-play packaging strategies have been holding down churn to one percent at Insight Communications. Promotions, which are also designed to win new video, data and voice customers, include a combination of digital cable, Internet access and telephony for $89.95 (versus the $117 a la carte price), or digital cable plus Internet service for $79.95, instead of $95. Management priorities for 2003 will including pushing these aggressively priced service bundles to more systems, said Kim Kelly, executive vice president and COO. Insight will relaunch VOD with enhanced content, such as Mag Rack, at no extra charge. Subscribers will get SVOD offerings for an extra $4.99 per premium service. "We'll also be making additions to our interactive digital platform through the launch of gaming and other enhanced applications," said Kelly.Michael Willner, president/CEO810 Seventh Ave. New York City, NY 10019 917.286.2300www.insight-com.comNASDAQ symbol: ICCIBasic Penetration: 57.5%Pay subs/penetration: 255,000/20.2%Digital subs/penetration: 294,800/24.9%High speed subs/penetration: 103,400/5.4%Telephony subs/penetration: 18,000/5.3%ITV customers/penetration: 258,000/24.5%2001 Revenue: $704.4 million2001 EBITDA: $308.3 millionEst. 2002 Revenue: $810 millionEst. 2001 EBITDA: $354.5 millionRevenue per sub: $51.42*2001 Percent revenue from new services: 15%* Cable revenue includes basic, premium, pay-per-view, franchise fees and other revenues. 2001 amounts have been adjusted to reflect franchise fee reimbursements as revenue to conform to the current period presentation.12 Cable OneBasic subs: 740,487 Cable One drove its digital penetration to industry-high levels last year with a 12-month-free deal that attracted 45 percent of those offered the service to sign up. This year and next, the company is putting its focus on expanding high speed data. Currently, the company achieves an annualized growth rate of about 7 percent for Internet services, but Tom Might, CEO, believes Cable One can do better. It has already upgraded 91 percent of the homes it passes to make them modem capable. "We have one of the highest deployments in the industry," Might said. Cable One has doubled in size over the past six years, thanks to 33 system deals with an average net acquisition cost below $1,500 per sub. Might said Cable One will be back in the market for more systems only when the price is right for properties that fit its large, but non-urban, market operating strategy. Thomas O. Might, president/CEO 1314 N. 3rd StreetPhoenix, AZ 85004602.364.6000www.cableone.comOwnership: The Washington Post Co.Basic Penetration: 60.1%Pay homes/penetration: 142,260/19.8%Digital sub/penetration: 234,744/33%High-speed subs/penetration: 53,112/5%2001 Revenue: $386 million2001 EBITDA: $135.5 million Revenue per sub: $42.79/monthPercent revenue from new media: 5%13 RCNBasic subs: 539,000 RCN's foremost objective is to grow its bundled customer base in the markets it serves and increase average revenue per subscriber. Currently, customers of unbundled products buy an average of 1.91 products, including long distance telephone, while customers of its bundled ResiLink service buy an average of 3.41 services. RCN introduced RCN Essentials this year, which provides a more basic package of core communications products, so that subscribers can then customize their add-on features. The company is also rolling out VOD, starting with its Philadelphia area market, and Mega Modem service, which it recently launched in California markets. Mega-Modem service delivers download speeds of up to 3.0 Mbps, up to twice as fast as competing cable modem and DSL services. With the capital markets still in turmoil, RCN doesn't anticipate acquiring any new systems.David C. McCourt, chairman/CEO105 Carnegie CenterPrinceton, NJ 08540609.734.3700www.rcn.comNYSE symbol: RCNBasic Penetration: 35.8%Pay penetration: 33%Digital subs/penetration: 97,460/40%High-speed subs/: 136,795/9%Telephony subs/penetration: 232,932/15.5%2001 Revenue 2001: $536.2 million2001 EBITDA: (-$232.3 million)Est. 2002 Revenue: $595-$605 millionEst. 2002 EBITDA: (-$90-$95 million)Revenue per sub: $133/month for ResiLink subs; $70/month for all 14 Classic CableBasic Subscribers: 334,000Ten year old Classic Cable has focused on operating small systems in non-metropolitan markets. In November, the company filed for bankruptcy, citing an overburdened debt structure and lack of liquidity. Emerging from Chapter 11 protection is an obvious priority, but increased competition from satellite services and overbuilders have complicated management's efforts in this regard. In March, Classic reported a $20-million decrease in revenues from the previous year and a loss of more than 40,000 subscribers. It fought the incursions from rivals with a discount program for loyal subscribers. Although the resulting cash flow drain put Classic in violation of its receivership, creditors agreed unanimously to approve the strategy. Recent SEC filings show Classic hopes to have a plan for reorganization ready to put before the court by Sept. 16. Dale Bennet, president/COO 6561 Paluxy DriveTyler, TX 75703903.581.2121www.classic-cable.comOTC symbol: CLSCQ Basic Penetration: 52%Pay subs/penetration: 173,000/52%Digital subs/penetration: 32,000/12%High-speed subs/penetration: 3,350/.003%2001 Revenue: $1.77 billion2001 EBITDA: $51 millionRevenue per sub: $41.04/month 15 WideOpenWestBasic Subscribers: 310,000For Mark Haverkate, president and CEO of WideOpenWest, 2003 will have a decidedly high-speed focus. "We want to be the best Internet service provider in our market," he says, "and we just introduced it, so it's a hot item for us right now."Having launched a three-tiered high-speed Internet service in January, WideOpenWest is looking to make inroads among dial-up holdouts who haven't made the leap to faster service because of pricing. Customers can now get their choice of speed: a value tier of 112 KB up and down service for $19.95 a month, along with a mid-priced 300 KB up/500 KB down service and a faster 300 KB up/1.5 MB down speed. WideOpenWest is also making stronger efforts toward customer retention in the coming year and continues to improve its central call center.Mark Haverkate, president/CEO900 W. Castleton Rd. #200Castle Rock, CO 80104303.663.0771www.wideopenwest.comPrivately heldBasic Penetration: 24%Pay homes/penetration: 100,000/7%Digital subs/penetration: 35,000/12%High-speed homes: 10,00016 Service Electric CorporationBasic subs: 297,000 Cable pioneer Service Electric Corp. remains a family affair, with Margaret Walson serving as CEO while son John is president and Edward Walson and daughter Rosalie Walter each head divisions. While each system has its own agenda, some priorities are shared by all. "Everyone's focus at this point is on the deployment of digital converter boxes," said John Walson. For John's own system, which covers the Lehigh Valley area, there are also other goals to tackle. "We currently have about 21,000 digital households," he said. "By the end of 2004, I would hope to have about 30,000." The MSO's continuing addition of digital channels may help to spur that along. Walson is also aiming to grow his system's total number of modem homes from 3,000 to 5,000 by the end of 2003.Margaret Walson, CEO201 W. Center St. Mahanoy City, PA 17948 570.773.2585www.seco-tv.comPrivatly held: Walson familyBasic Penetration: 71%Digital subs/penetration: 31,000/10.5%High-speed homes/penetration: 6,000/2%17 Tele-MediaBasic Subscribers: 255,864Tele-Media knows a little something about the phoenix rising from the flames, having been there a few times before. "This is really our fourth time around in the business," said Robert E. Tudek, chairman/CEO/president. Having started in 1970, the MSO sold 85 percent of its subscribers in 1984, only to rebuild, sell and rebuild again. Tudek said the cycle is likely to continue."We've had some good offers for some of the systems we have," he said. "Also, at the same time we're looking to buy."Tele-Media is in the process of upgrading 87,000 homes with access to digital and data products. "Our penetration right now is 20 percent, so it would be nice to take that up another 5 or 10 percent," Tudek said. He'd also like to see modem homes grow to 10-12 percent from 7 percent by the end of 2003.Robert E Tudek, chairman/CEO/president320 West College AvenuePleasant Gap, PA 16823814.359.3481www.tele-media.comPrivately owned: Robert Tudek and Everett I. MundyBasic Penetration: 71.7%Pay subs/penetration: 100,486/39.3%Digital subs/penetration: 25,568*/20.1%High-speed subs/penetration: 3839*/7.7%2001 Revenue: $94,644,0002001 EBITDA: $42,777,000Est. 2002 Revenue: $101,990,000Est. 2002 EBITDA: $45,234,000Revenue per sub: $38.61/month *Includes subscribers that TeleMedia manages under joint ventures with Adelphia18 Northland CommunicationsBasic Subscribers: 228,000 Founded in 1981 by chairman/CEO John S. Whetzell, Northland's major operating clusters are in Texas, across the Southeastern U.S. in Georgia, North and South Carolina, Mississippi, Alabama, and in the Northwest U.S. in Washington, Idaho and California.Northland is currently rolling out Internet services and expects to make them available to 100,000 homes passed by the end of 2002. It has already passed about 9,000 homes to date with various launches in test phases. Digital tiers got up and running in 2001-2002 and are now available to about 80 percent of Northland's subscriber base. The company has no immediate commitments to invest in VOD offerings or telephony but will instead focus on the Internet, a top priority, over the next 12-18 months.John Whetzell, chairman1201 Third Ave.Suite 3600Seattle, WA 98101206.621.1351www.northlandcabletv.comPrivately ownedBasic Penetration: 68%Pay subs/penetration: 108,000/45%Digital subs/penetration: 11% 2001 Revenue: $123,914,000 2001 EBITDA: $56,794,000Revenue per sub: $45/month19 ArmstrongBasic Subscribers: 211,200Things are looking busy for Armstrong in 2003, and Michael Haislip, president, said high-speed Internet penetration and improving customer service lead his list of priorities. "We already have good ratings from our customers, but it's going to be imperative that we be a whole lot better,' he said.Armstrong is currently testing telephony, and Haislip said the MSO is busy getting its infrastructure in place and facilitating billing integration. Additionally, he expects Armstrong to have 50,000 modem customers out of the MSO's 211,000 basic customers and 285,000 homes passed by the end of 2003.VOD is also a possibility next year, and Armstrong is testing VOIP. Even though adding digital subscribers is less of a priority, he expects to have about 45,000 digital subscribers out of the 211,000 basic subs.Michael Haislip, president1 Armstrong Pl. Butler, PA 16001 724.283.0925www.armstrongonewire.comPrivately ownedBasic Penetration: 74.2%Pay subs/penetration: 94,000 units/44%Digital subs/penetration: 30,000/14%High-speed subs/penetration: 37,000/17.5%Revenue per sub: $42/month20 Susquehanna CommunicationsBasic Subscribers: 205,742James Munchel, president and COO, listed six strategic initiatives for York, Pa.-based Susquehanna Communications next year: more efficient clustering; rebuilding to ensure sufficient network capability and capacity; building customer loyalty; maximizing employee potential with development programs; maximizing revenue opportunities on digital and data; and launching a residential telephony business. New services, in order of priority, will be ITV, HDTV, VOD and VOIP. "We are really high on the cable modem business," Munchel said. "We are now our own ISP and it is a wonderful product with great potential. We're convinced it's a great customer retention/acquisition tool. It works for us in all size systems."Peter Brubaker, CEO140 East Market Street York, PA 17041 717.848.5500 www.suscom.netOwnership: Susquehanna Pfaltzgraff Co.Basic Penetration: 71.1%Pay subs/penetration: 74,197/36.1%Digital subs/penetration: 40,192/20.1%High Speed Subs: 20,115/9.4%21 Midcontinent CommunicationsBasic Subscribers: 200,843Customer service is top of mind for Mark Niblick, president and CEO of Midcontinent. "We just ramped up our training budget 50 percent in 2002 for both technical and customer skills training, and we're going to maintain that." In terms of new services, Niblick said, "the main one is HDTV. Like everyone else, we offer high-speed data and digital, but I think HDTV's going to get the attention." Midcontinent has 18,000 digital subs now and "we would like that to be at 30,000 in 2003." Niblick would like the company's modem homes to total around 40,000 by the end of next year, up from 26,000 now. Midcontinent doesn't offer VOD, Niblick said, because "we've never had a customer request for it." While the company is always looking to buy and sell systems, Niblick doesn't anticipate major transactions one way or another. "We have the benefit of being very clustered." Mark Niblick, president/CEO410 South PhillipsSioux Falls, SD 57104800.888.1300www.midcocomm.comBasic Penetration: 53.7%Pay subs/penetration: 104,918/52.2%Digital subs/penetration: 18,439/11.3%High speed subs/penetration: 26,703/18.4%Telephony subs/penetration: 3,283/8% 22 Blue Ridge CommunicationsBasic subs: 177,000Launching advanced services has the attention of management at Blue Ridge Communications, according to Mark Masenheimer, general manager. "After we get our VOD launch out of the way, hopefully in August, "we will start focusing on voice over IP. It looks like we'll be able to do either a VOIP trial or full-fledged launch next year. The launch will probably focus on certain areas where we know telephone customers are craving an alternative." By the end of next year, Masenheimer sees Blue Ridge with 23,000 digital subscribers and 26,000 modem homes. Masenheimer listed three challenges for his company: controlling programming costs, battling satellite competition and "giving our CSRs the knowledge and training to sell bundled services."Fred A Reinhard, chairman613 Third St.Palmerton, PA 18071Phone: 610.826.2552www.brctv.comPrivately held: Pencor Services Inc.Basic Penetration: 85%Pay subs/penetration: 33,500/40%Digital subs/penetration: 8,000/10%High speed subs/penetration: 14,000/14%23 Millennium Digital MediaBasic Subscribers: 157,946 More than 64 percent of Millennium's customers are served by cable plant operating at 550 MHz or better. The company also has approximately 759 miles of state-of-the-art fiber optic lines throughout its systems. Next year, Millennium will focus on "growth, customer service, churn reduction, greater penetration of new products and services and managing programming costs and other significant expense categories," said Kelvin Westbrook, president and CEO. New products that get the most attention will be "high-speed data, digital and VOD/SVOD," Westbrook said, adding that he hopes that the company's digital penetration will be at 25-30 percent by the end of next year and that of cable modems at 15-17 percent by then. Millennium will be looking to buy systems in high-growth areas adjacent to major metropolitan markets."Kelvin Westbrook, president/CEO120 South Central AvenueSuite 150St. Louis, MO 63105314.802.2400www.mdm.netBasic Penetration: 49.7%Pay subs/penetration: 51,986/32.9%Digital subs/penetration: 28,934/18.3%High speed subs/penetration: 18,928/12%24 Buckeye CablevisionBasic subs: 153,034Buckeye Cablevision runs two distinct systems. The larger one serves 135,00 subs in Toledo, Ohio, where Buckeye parent company, Block Communications, has its headquarters. The Erie County system of 20,000 subs sits an hour's drive east in Sandusky, Ohio. "Our most visible priority next year is upgrading our Erie system to 860 MHz," stated Florence Buchanan, senior manager for marketing and programming. "We should be completely digitized by the end of 2003." Another change will involve the marketing of cable modem services. Neighboring cable operators from Charter have increased demand for high speed modems in the region by introducing a multi-priced system. Buckeye should have its own tiered system by next year. In addition, task forces are currently planning for the rollout of HDTV and VOD in 2004 for both systems. Walter H. "Chip" Carstensen, president/general manager5566 Southwyck Blvd. Toledo, OH 43614419.724.9802www.buckeyecablesystem.comOwnership: Block CommunicationsBasic Penetration: 62.4%Pay subs/penetration: 69,645/45.5%Digital subs/penetration: 9,841/7.59% High speed subs/penetration: 17,428/7.3% 25 US CableBasic Subscribers: 149.485This Montvale, N.J. based MSO has systems in Minnesota, Wisconsin, South Carolina, Georgia, Florida, Missouri, Texas, New Mexico, Colorado and New Jersey. Operating units include Warp Drive Networks, which provides high-speed data and Internet services to the business community, and three Smart City companies. Smart City Networks provides last mile services to the convention and hospitality industries, such as the Walt Disney World Resort Complex and nearby commercial and residential areas in central Florida. At the top of the list of priorities for 2003 at US Cable is "increasing revenue per sub through increased digital penetration and modem deployment," said Gary MacGregor, the company's director of sales and marketing. By the end of next year, MacGregor hopes US Cable Group will have 24,000 digital subs and 5,000 modem homes.James D. Pearson, president/CEO28 West Grand Ave.Montvale, NJ 07645 201.930.9000 www.uscablegroup.comOwnership: 48% by AT&T Broadband/52% by principalsBasic Penetration: 52.0%Pay subs/penetration: 60,335/40.4%Digital subs/penetration: 12,420/8.3%High speed subs/penetration: 1051/0.7%Telephony subs/penetration: N/A2001 Revenue: $66,514,756 Est. 2002 Revenue: $73,660,000Revenue per sub: $39.37/month 2001 percent revenue from new services: 2.5%Broadband GiantIf AT&T and Comcast were already one, here's what the numbers would say: Basic Subscribers: 21.768 millionBasic Penetration: 55.1%Pay units/pay penetration: 20,015 million*/86.5%*Digital subs: 6.473 millionHigh Speed Subs: 2.803 millionTelephony subs: 1.220 million2001 Revenue: $14.489 billion2001 EBITDA: $3.912 billion Est. combined 2002 Revenue: $16 billion-$16.2 billion**Est. combined 2002 EBITDA: $4.2billion**Revenue per sub: $54.27/month*Calculated from Paul Kagan Associates estimates**Calculated from company projections

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