Phone Key to Bundle

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Boston— Market statistics demonstrate 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 CTAM Summit panel last Wednesday offered statistics showing that the most aggressive phone marketers, Cox Communications Inc. and Cablevision Systems Corp., also are trending upward in video subscription.

Meanwhile, statistics for single-product homes are trending downward. Boyd Peterson, Yankee Group senior vice president of media research, 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.

“We’re upside down now,” said Jeff Henry, regional vice president of marketing for Time Warner’s Texas region. “We’re a phone company that sells video.” He said 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 high-definition TV service, with phone service, he said.

At Charter Communications Inc., Ted Schremp, senior vice president and general manager of Charter Telephone, anticipates passing between 6 million and 8 million homes by the end of the year.

Early customers are embracing Charter’s offer of $39.95 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 Verizon Communications Inc. and AT&T Inc., yet 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 said the system took its time engineering the plant, to ensure service quality. “People have very low tolerance for lack of dialtone.”

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