About a week before his cable company is expected to officially surpass the 1 million-subscriber mark, Jerry Kent decided to drop a superstition that has followed him throughout his career.
The 24-year cable veteran will head up a company whose name does not start with the letter “C.”
By the end of summer, Cebridge Connections, which he now heads as CEO, will become Suddenlink Communications, as part of a consolidation of acquisitions set to be completed in May and July that will put it past the million-subscriber milestone.
That may seem like a minor sacrifice. But to Kent, it meant a fair amount of soul searching.
Personally, Kent has been affiliated with four companies that began with the letter “C”: Cencom Cable, Charter Communications Inc., Cequel III, and Cebridge Connections. Cebridge is operated by Cequel.
There’s also a certain mythology in the cable industry: Four of the six largest system operators are Comcast Corp., Charter, Cox Communications Inc., and Cablevision Systems Corp., all which begin with the letter C.
'C’ STREAK OVER
“We’ve been superstitious over time,” Kent said in an interview earlier this month. “I guess the string is broken.”
Kent said the time was right to rebrand the company. Late last year, Cebridge announced its deal to buy about 940,000 subscribers in four states from Cox, for about $2.55 billion, according to federal filings. In February, the company announced its plan to acquire another 240,000 subscribers in West Virginia from Charter for $770 million.
“With the acquisitions and all the divestitures, we’ll have close to 90% of our customers coming on board [who] will be new to us,” Kent said. “If there was ever a time that we wanted to rename and rebrand the company, that’s an opportune time to do it.”
Cebridge itself got its first big boost in 2003, when Cequel struck a deal to take over management of another cable operator whose name started with a “C,” Classic Communications. Since then, Kent has trimmed Cebridge’s footprint from about 480,000 subscribers three years ago to about 285,000 today. The vast majority of those systems were sold to other parties. The rest were shut down.
“First we broadly continued to rationalize our holdings by the number of properties, selling some off and shutting some down,” Kent said. “When we took on the challenge of Classic Cable, we weren’t wearing rose-colored glasses. These were spread out rural properties, some so small that upgrading them couldn’t be justified.”
FITS JUST RIGHT
The Cox systems, however, fit “like a sock in a shoe,” Kent said.
Kent said that when the acquisition of Charter’s West Virginia properties closes in or about July, the first step will be to cluster properties together.
About 70% of Suddenlink’s cable systems are in five states: Arkansas, Louisiana, North Carolina, Oklahoma and Texas. The Charter West Virginia systems would make up another 17% of the subscriber base.
“That means that 87% of our systems will be in six key states,” Kent said.
Suddenlink expects to shed about 90,000 subscribers when the acquisition of the Cox systems closes in May. After both deals close and the shedding ends, it expects to have about 1.4 million customers.
That would make it the ninth-largest cable operator in the country, by Kent’s calculations. Insight Communications Co., which would be No. 10, has about 1.3 million subscribers at present.
Kent hired San Francisco-based branding agency Landor Associates to come up with a name in January. After several focus group sessions, Landor came up with Suddenlink.
Suddenlink was chosen because it performed well in surveys of more than 500 customers and potential customers — respondents wanted to do business with the company and learn more about its products and services, said Cebridge spokesman Pete Abel.
Suddenlink also conveyed a sense that the service was technologically advanced, high quality and user-friendly. It also matched up well with Cebridge’s marketing strategy.
“The name was a solid match with the essence of the brand they wanted to build,” Abel said. “A brand that was focused on unlocking opportunities for its customers, on suddenly delighting them with compelling links or connections to the worlds of entertainment, information and communication.”
Cebridge senior vice president of marketing Mary Meier said that the soft launch of the Suddenlink name will begin on May 1 — the same day the Cox deal is expected to close — with a hard launch in July, when the Charter deal is supposed to conclude.
She said the transition to the Suddenlink name should be completed in the Cox systems in about 90 days.
Meier said that the marketing strategy will be three-fold: emphasizing the triple play of voice, video and data; focusing on retention and stressing Suddenlink’s local presence.
“Like every other MSO, we recognize the value of the bundle,” Meier said. “We see the value proved over and over again. Even in the small Missouri markets where we’ve launched telephone service, we’ve seen a boost to our basic, digital and Internet numbers.”
Meier said that the retention program — launched late last year — involves “multiple touch points.” These include contacting the customer before the installation of service, right after the installation, and then again six months later, as well as through regular surveys.
Localism is also key in beating back direct-broadcast satellite and telephone company competition, Meier said.
A LOCAL FOCUS
She said that while the competition touts its size and national reach — aspects that she said many of her customers find “irrelevant” — Suddenlink will instead focus on the customers’ world and by delivering niche services that the Bells can’t or won’t offer.
“For that reason, we’re looking really hard at doing a better job of promoting local programming on our local-origination channels in each market,” Meier said. Additional local programming could appear on customized digital tiers.
But the key weapon in Suddenlink’s arsenal to battle the phone companies will be telephone service, at least for the time being. While its phone service is available in four former Cebridge markets — and in five systems with about 220,000 basic customers it will inherit from the Cox deal — Kent said that plans are to make phone service available across Suddenlink’s entire footprint by the end of next year.
“There’s a lot of heavy lifting that needs to be done to get there, but it will start by the fourth quarter of this year, then roll into 2007,” Kent said of the phone rollout.
EYEING TRIPLE PLAY
Kent has been toying with a $90 triple-play bundle, similar to Cablevision Systems Corp.’s successful promotional package of TV, Internet and phone services.
Pricing hasn’t been set, but in four markets where it has offered a $90 triple play, 12% of basic subscribers (6% of homes passed) took the plan in just four months, exceeding expectations.
Kent wouldn’t estimate how much the phone rollout will cost, but noted that the Cox and Charter systems he is acquiring are fully upgraded to be able to provide voice services.
Two acquisitions in the past six months for a total of $3.2 billion could be a lot to digest. But Kent doesn’t feel he needs a rabbit’s foot to ensure his success.
Still, the cable veteran does have a bit of an insurance policy against any gremlins that decide to show their faces in the future.
Suddenlink’s holding company will be renamed Cequel Communications, technically keeping up Kent’s streak of “C” branded cable companies.
“So it still will start with a 'C’ on Wall Street,” Kent said.
