Mediacom CFO Touts Telephony

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New York -- Mediacom Communications Corp. executive vice president and chief financial officer Mark Stephan said the secondary-market MSO is beginning to see some positive results in its rollout of telephone service, with its first market reporting 6% penetration in just five months.

Mediacom launched voice service in its Gibson City, Ill., market in June. At the UBS Warburg LLC Global Media Conference here Wednesday, Stephan said that while it is still too early to tell about the impact of voice on basic-subscriber retention, early signs are positive.

He added that Mediacom has voice service available in 1.2 million marketable homes within its 2.8 million homes passed, saying that the goal is to have the service available in 2.5 million marketable homes by the end of 2006.

Mediacom has about 1.4 million video subscribers, so Stephan said the remaining 1.3 million homes in its footprint with no relationship with the MSO could be targets for phone service. And once they become phone customers, there is a chance that they will buy additional services like video and high-speed Internet.

“What we’re beginning to see [is that] as people walk through the door as a new customer of voice, they buy other products,” Stephan said. “The 1.3 million homes where we have no relationship can be repropositioned.”

Stephan said Mediacom has priced the stand-alone voice product at $49.95 per month. When the customer buys one other product, the price for phone services drops to $39.95, and it falls further to $29.95 per month with two additional products. The triple play of voice, video and data is priced at $99.95.

Mediacom had about 8,000 telephone customers at the end of the third quarter, and Stephan was reluctant to say that the voice product has had an impact on growing basic subscribers, mainly because the product has been available for just five months.

Most of Mediacom’s phone subscribers are existing customers, he said, adding that the product has helped the MSO to retain basic customers and to grow high-speed-Internet customers.