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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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  • Required: It's hard to believe people who just need entry level internet access are willing to pay $65/mo for that, alone. No wonder so many customers are fleei...
  • FredH: I keep hearing that (about trying to eliminate the 7 year no-data-cap requirement) and wonder how it's even possible. I hope the NYS AG will get invo...
  • John: It might be a problem with a person with disablities tries to pay and they charge them....
  • John: Well, time for everyone to start paying them by snail mail, then....
  • Mike D.: And for those who are planning to "cut the cord" after a promotion expires, be aware that Charter is lobbying the new administration and FCC chairman ...
  • Dylan: Huh, that's interesting regarding that Spectrum only saves 3/10 of its customers. Maybe there is something going on. And regarding my own promotion -...
  • Phillip Dampier: You were not on a promotion before which is why you got one this time. One year from now when your bill spikes and you call and complain, they will te...
  • Dylan: It's not that hard to get new customer pricing from Spectrum. I used to be a TWC customer paying $65/mo for 50 Mbps down internet. Once Spectrum came...
  • NM: Phillip, You may be interested in today's online story in Syracuse.com about what Spectrum's customers in CNY think about the merged company: http://...
  • Jim J: Dial tone is dial tone....
  • Julia: Even in life after TWC, if customer complaints remain the same or if a customer service rep claimed to have fixed a problem, but really didn't, you ca...
  • DPNY: As soon as Spectrum took over, my bill went up (a couple of dollars, but still)! I pay almost $250 a month as it is now for the package! I can think...

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