Bench Strength on Display

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If you like your MSO data served up as a comprehensive overview, or spotlighting a (hopefully) representative good-news story, it's been easy to find stuff to read and hear recently.

The Traveling Robertses touched down in New York on May 16 for a daylong conference with investors, providing an exhaustive look at how Comcast's mind meld with the former AT&T Broadband is going. Very well, naturally, was the botto line about seven hours after the gathering started.

Nuggets included the cheery news that there have been few "bad surprises" about the state of the AT&T plant. (I guess all those surprises were sprung on AT&T, which bought the systems from Tele-Communications Inc. and MediaOne Group Inc.) Some plant even had been rebuilt, but mislabeled as not-yet-rebuilt.

Comcast's emphasis on improving customer service is also welcome, and something the MSO sensibly highlights. AT&T had outsourced much of its call-center needs. Bringing that in-house helps Comcast save money and put its front-line talent to better use, deploying "save" specialists to deter disconnects and sales specialists to "sell in" multiple services when customers call for video.

Analysts seemed impressed with the Comcast bench strength put on display: 16 presenters at one meeting, as Citigroup Smith Barney's Niraj Gupta pointed out. Even without serving up major news, the Comcast gathering gave Gupta grist for a 20-page report last week (and reason to raise his 2003-end price target for the stock to $40 from $35).

An even more microscopic view was revealed when Cox exposed a little of its bench strength last week. San Diego GM Bill Geppert and San Diego marketing VP Art Reynolds played show-and-tell on a conference call hosted by UBS Warburg's Aryeh Bourkoff.

Lots of interesting nuggets came out of that. Everybody's big worry a couple of weeks ago was over Verizon's getting serious about marketing DSL at discounted rates. Well, SBC's been serious about DSL in California for quite some time. But Cox says it's actually increased its share (to 48%) of its own subs that call Cox their No. 1 ISP, up 13 points in the past year.

Nationwide, Cox already offers a substantial discount on that high-margin service — so high, it doesn't even disclose high-speed-data margins, another Cox exec said on the call — for people who buy the three-service bundle. If you buy phone, cable and high-speed Internet from Cox, the HSI charge is $29.95, down from $39.95 for video-also customers or $49.95 for HSI-only subs.

Here's something that might not hold true for every operator facing a marketing onslaught from Verizon or SBC: Geppert said publicity over SBC's offer caused call-ins to pick up, and Cox's HSI additions in the market actually grew over the last six months. "It really drove our connects to another level," Geppert said.

Cox also keeps adding basic subs in San Diego, where DBS penetration is only about 7%, and plans a midyear 3% rate increase, according to Bourkoff's note on the call.

Just thought you might like to know.

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