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Cablevision Capitulates on New Customer Promos; Verizon FiOS’ Price Slashing Really Hurt

Phillip Dampier February 28, 2012 Broadband Speed, Cablevision, Competition, Consumer News No Comments

The cable company best known for serving suburban New York City.

Cablevision Industries has cried “uncle” in light of relentlessly aggressive competition from Verizon Communications, which offers its fiber to the home FiOS service in much of the cable operator’s service area.

Cablevision’s 4th quarter and year-end financial results, reported earlier today, are underwhelming investors.  Cablevision executives warned the company will have lower cash flow in 2012 due to increased investments in set-top boxes, network upgrades, and more importantly — no planned subscriber rate increases this year.

Some highlights:

Video – Losing Customers Like Everyone Else: Cablevision lost 14,000 video customers in the last quarter, many to Verizon FiOS and ongoing cord-cutting.  Analysts expected just 9,000 defections.  Cablevision will soon launch both HBO and Max Go online video for their customers nationwide.  Additional on-demand video options, online and off, are also anticipated.

Broadband – Cablevision finally admitted its own network was responsible for last year’s faltering broadband speeds that delivered poor marks in ongoing FCC speed tests.  The company originally denied the speed test results were accurate.  Today CEO James Dolan told investors the company invested in its broadband network to improve speeds and service.  Cablevision feels strongly it must compete effectively with Verizon to survive.  The company added 20,000 high-speed data customers and 31,000 phone subscribers in the quarter.  The company is doing well allowing customers easy access to broadband speed upgrades.

Wi-Fi – Cablevision sees strong value in its wireless broadband network as customers increasingly take their content mobile and need connectivity to the web.

Upgrades – CEO Jim Dolan said 2012 will be “a year of investment” in Cablevision upgrades and improvements.  The company is even accelerating projects originally envisioned for 2013.  Cablevision will continue to expand its “next day” installation offer across the eastern United States by the end of the first quarter.

Promotions – The escalating war of promotions between Verizon and Cablevision are likely to cease as Cablevision yanks their most aggressive new customer offers.  Earlier this year, Verizon was pitching a two year triple play offer that included an incredible $500 prepaid card rebate as part of the promotion.  “I don’t think you’ll see those [low introductory rates from Cablevision] again ever,” said Dolan.

“The main theme that people should take away from the call today is that we continue to be focused on moving the business in a direction where we both retain existing subscribers and have attractive, economically sensible offers for new subscribers,” said Cablevision chief financial officer Gregg Seibert.

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  • Nick: This isn't how any of this works... Just changing ownership of a company does not at all change the network infrastructure... If people are gett...
  • Phillip Dampier: Are you quoting promotional prices that only new customers can get or the regular price most customers will pay?...
  • Ian L: Devil's advocate here: 100/25 for $60 per month is better than I can get now on TWC. And if I wanted to pay $20 more than I am now (which I've done be...
  • BobInIllinois: Drahi is simply going after the largest cableco systems left out there, to consolidate. #5 Cablevision is East Coast NYC area, #10 Mediacom is heav...
  • Justin: So with the notification of clear going by the wayside I've already switched my ISP and now officially canceled my clear service. All of that said, is...
  • Lee: 70% cancellation would burn Comcast to the ground along with the sports and Hollywood empires that constantly increase what the cable companies have t...
  • Jess: I've had ACS internet for 5 years now...never a problem, $110 for unlimited internet and another $100 to GCI for cable...$210/mo, no overages, no prob...
  • Lord Beavis: The only way this is going to stop is for 70% of their customers to cancel their service....
  • sgt: Promises since the onset of cable to 'reduce prices once costs are met' (heard this since 1968 or before) have been as dependable as our present POTUS...
  • BobInIllinois: Drahi is an admirer of John Malone and his view of the Cable industry. Enough said, Unloaded One....
  • UnloadedOne: I thought this guy could possibly be an innovator but clearly he isn’t based on what I’m reading here. So maybe it’s a blessing in disguise that he’s ...
  • dawsonfiberhood: It looks like I'll briefly be a customer of the "New Crime House" conglomerate once this deal goes through. Still waiting for the Google Fiber I order...

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