Cox Sees Double-Digit Revenue Growth

Author:
Publish date:
Updated on

Cox Communications Inc. expects new services like digital
television, telephony and high-speed Internet to drive revenue growth to the 11 percent to
14 percent range in 1999, with cash flow to rise somewhat more moderately.

Cox officials also predicted at the annual Smith Barney
Global Entertainment, Media and Telecommunications Conference in Scottsdale, Ariz., last
week that three new residential services will lead the way: Cox@Home, Cox Digital
Telephone and Cox Digital TV.

The company estimated that revenue-generating units for the
three services will reach 450,000 to 500,000 by the end of the year. RGUs are a measure of
customer counts for each individual service. For example, a household subscribing to Cox
Cable, Cox@Home and Cox Digital TV would account for three RGUs, two from new services.

Although new offerings are expected to fuel growth, Cox
does not expect its core cable business to remain stagnant. The company predicted that
subscriber numbers for cable service will increase by between 2 percent and 2.5 percent
during the year.

RGUs are also expected to grow by 375,000 to 400,000, or 9
percent to 11 percent. Pro forma operating cash flow is expected to rise by an estimated 8
percent to 10 percent.

That extra revenue will allow Cox to continue investing in
its broadband network, officials told analysts. Cox plans to have 67 percent of its plant
upgraded to 750-megahertz two-way capacity by the end of the year. The company hopes to
have about 80 percent of the network upgraded by year-end 2000.

"We anticipate healthy growth for new services in the
coming year, as we launch services in additional markets and expand the footprint in
existing markets for telephone and high-speed Internet services," said Jimmy Hayes,
senior vice president of finance and chief financial officer of Cox, in a prepared
statement.

"We also continue to focus intently on integrating new
services into our core business operations into the year ahead," Hayes added.

Related