Cablevision Systems Corp. plans to at least double
cable-modem penetration this year, extending an aggressive retail campaign through its The
Cable-modem sales rose 65 percent in the fourth quarter to
52,000 subscribers, largely through sales at The Wiz stores in the New York area.
Cablevision CEO James Dolan told analysts last week that he plans to expand that campaign.
"[The year] 2000 is going to be the year of the cable
modem at Cablevision," Dolan said during the analyst call, adding, "100,000
[cable-modem subscribers] is the least we will do, and we expect to do much, much more
Cablevision also reported subscriber growth of 2.7 percent
-- one of the highest rates in the industry -- in the fourth quarter, and its
"Optimum" advanced-analog customer count rose by 29,000, or 33 percent, to
Revenue rose 17 percent and adjusted operating cash flow
rose 8.5 percent to $250 million. For the year, revenue rose 16 percent to $3.8 billion
and adjusted operating cash flow was $909.6 million, up 8 percent.
SG Cowen Securities Corp. analyst Gary Farber said cash
flow was a bit below his forecast -- he expected $276 million -- but other growth offset
"The modem rollout is going great, the disposition of
the Boston and Michigan systems seems imminent and there is the potential upside of their
[wireless] licenses," Farber said. "There really isn't a stock in the
sector that has as many triggers going forward."
Cablevision owns stakes in wireless licenses covering about
50 million homes. Some analysts value those licenses at $750 million or more.
Dolan said Cablevision is still working out the details of
its planned tracking stock for Rainbow Media Holdings Inc.'s programming,
entertainment and sports assets, which he hopes to issue by midyear.
He added that plans to sell Boston and Kalamazoo, Mich.,
cable systems -- with about 354,000 and 49,000 subscribers, respectively -- could be
finalized during the first quarter.
One possible bidder for Kalamazoo, Charter Communications
Inc., also enjoyed healthy subscriber growth. Last week, it reported 3.1 percent
year-over-year internal customer growth in its first quarterly statement since going
public in November.
Charter said that at the systems it owned and operated
during the fourth quarters of 1999 and 1998, internal growth was 3.6 percent at Charter
systems and 2.4 percent at former Marcus Cable systems. The year before, Marcus systems
had no internal growth. The 3.1 percent mark was a weighted average.
In 1999, Charter added 3.8 million subscribers with 12
acquisitions, bulking up to its current total of 6.1 million.
Charter also said revenue rose 9.9 percent and cash flow
rose 12.3 percent on a pro forma basis in the quarter.
Charter had 155,000 digital-video subscribers and 66,000
high-speed-data customers at the end of the year.