Phone Key to Bundle

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Boston -- Market statistics demonstrated that adding telephony to the bundle is the best way to add basic-cable and high-speed-data customers and fend off poaching by competitive providers.

Analysts at a Cable & Telecommunications Association for Marketing CTAM Summit panel here offered statistics showing that the most aggressive phone marketers -- Cox Communications and Cablevision Systems -- are also trending upward in video subscriptions. Meanwhile, statistics for single-product homes are trending downward. Boyd Peterson, senior vice president of media research for The Yankee Group, predicted that cable-only homes will represent 54% of the marketplace by 2009. Currently, 61% of cable homes have that single product, he said. Telephone-only homes, now representing 61% of the marketplace, will shrink to 42% in three years.

Aggressive telephone marketers gain one new video unit for every four new telephony customers, added Jason Bazinet, director of cable and satellite equity research for Citigroup Investment Research.

Due to the success of the bundle, “We’re upside-down now,” said Jeff Henry, regional vice president of marketing for Time Warner Cable’s Texas region. “We’re a phone company that sells video.”

Henry added that every inbound caller, no matter what product they are inquiring about, is asked the identity of their current phone provider, and the salesperson links the value of the product they wish to buy, such as HD service, with phone service.

The pure notion of choice is resonating with consumers passed by Charter Communications, added Ted Schremp, senior VP and general manager of Charter Telephone. That MSO anticipates passing 6 million-8 million homes by the end of the year. Early customers are embracing the company’s offer of $39.95 per month for unlimited local and long distance service, he added.

Quality service is also key to getting and keeping customers in the segment. Cox’s Orange County, Calif., cluster competes with both Verizon Communications and AT&T, yet it has captured 46% of the marketplace.

Before the CTAM panel, that Cox region was presented with its third consecutive service-quality award from J.D. Power & Associates.

Al Mikolacjczyk, director of broadband marketing for the Orange County region, noted that the system took its time engineering the plant in order to ensure service quality. “People have very low tolerance for lack of dialtone,” he said.

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