Analyst: Mediacom A Mixed Bag

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Pali Research media analyst Richard Greenfield initiated coverage on Mediacom Communications Corp. last week with a “neutral” rating, citing that the cable operator could be poised for a return to basic-subscriber growth, but expressing doubts about its ability to fend off growing competition.

In his report, Greenfield said that Mediacom was hit hard by recent hurricanes and had lost about 167,000 subscribers over the past three years — it currently has 1.4 million customers. He said that the pressure exerted on Mediacom from the unusually severe storm activity would seem to position it for a recovery in 2006 and 2007. Another reason for some optimism: direct-broadcast satellite providers have largely completed their local-to-local launches in the operator’s markets.

But Greenfield cautioned that the DBS threat still should not be overlooked — he stressed that a key part of Mediacom’s pitch to investors when it went public in 1999 was its relative lack of exposure to satellite.