Home » Cable One »Competition »Consumer News »Data Caps » Currently Reading:

Cable One’s Costly Internet Service Helps Cable Company Achieve Record Profits

Phillip Dampier November 12, 2019 Cable One, Competition, Consumer News, Data Caps 1 Comment

Using a combination of lack of competition, high-priced service plans, and data caps, Cable One is once again the nation’s most profitable cable broadband provider, charging residential customers a record-breaking average of $72.09 a month.

Late last week, the country’s fifth largest cable company reported excellent results to its shareholders, as the company collected the proceeds from increasing rates on broadband service while shedding unprofitable cable television customers.

Cable One serves small and mid-sized cities, mostly in the mid-south, Rockies, New Mexico and Arizona. It has grown larger with the acquisition of NewWave and Fidelity Communications, and told investors on a quarterly results conference call the company would take some of its recent gains and move towards further acquisitions in the near future. NewWave customers will now face Cable One’s stiff data caps, rolling out across legacy NewWave service areas in November and December. NewWave customers have already found their cable television package pruned back to match the current Cable One package, which omits Viacom-owned networks. The same will hold true for Fidelity’s customers once the two companies merge systems.

 

Laulis

Revenues for the third quarter were $285 million compared to $268.3 million at the same time last year, representing a 6.2% increase. Even with the high cost of service, the number of Cable One internet customers is increasing, primarily because competing phone companies typically offer little beyond DSL. In the last quarter, Cable One added 7,400 new internet customers and boosted broadband revenue by 8.2%.

“Cable One still has one of the industry’s lowest broadband penetration of homes passed at just 32.2% and, with limited fiber-based competition, their ceiling is arguably one of the highest in the industry,” Moffett Nathanson analyst Craig Moffett told investors. “They are at last growing the broadband business at a rate fast enough to drive meaningfully higher penetration.”

Cable One makes no secret it now calls itself a broadband company and has been de-emphasizing cable television service over the last few years. In fact, customers who cut the cord are doing Cable One a favor because broadband-only customers boost their overall profit margins. Unlike cable television, where licensing expenses are growing, the cost to provide and support broadband service is dropping — even as Cable One raises internet pricing and constrains customer usage with industry-low data caps. That forces customers to upgrade to more costly, higher speed service plans to get a larger data allowance. Cable One also offers a $40/mo add-on that restores unlimited service, which is popular with their premium customers. Once a customer uses more than 5 TB, their speed is throttled.

“I think the interesting thing that I took note of is that the higher [the] speed that our consumer takes the higher the percentage of unlimited [plan] selling. So that is to say if you take our gig service the percentage of customers that take unlimited there is the highest of any consumer group,” noted Cable One CEO Julia M. Laulis.

Pricing is expected to rise further unless phone companies compete with fiber broadband, an unlikely scenario in the rural and exurban areas Cable One serves.

1
Leave a Reply

avatar
1 Comment threads
0 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
1 Comment authors
J. Becker Recent comment authors

This site uses Akismet to reduce spam. Learn how your comment data is processed.

  Subscribe  
newest oldest most voted
Notify of
J. Becker
Guest
J. Becker

That’s actually not that “costly” if its reliable internet access. My only reasonable option for internet service is (recently very unreliable) Spectrum internet. Spectrum’s lowest tier offering is 100/10 for $69.99/mo. For my needs, I could get by just fine subscribing to Cable One’s $30 offering if they were in my area, and their data caps wouldn’t be an issue for me. My other option is service w/ AT&T that they advertise as only a 5/1 advertised service, although based upon some AT&T DSL service that I had more than 10 years ago, that service probably doesn’t even reach those… Read more »

Search This Site:

Contributions:

Recent Comments:

  • Paul Houle: Around Ithaca I know many Greens, Pagans and ecologists who ask me about 5G because they know I am a physicist, hacker, and computer programmer. The...
  • Roger Ross: In spite of what you are saying, this strategy will ultimately fail, and it is sad they cannot see it coming. What they should have done was lower pr...
  • Dixie whitehead: What channel number is this sports package on...
  • JOE K: good luck........
  • JOE K: FTR lied to the SEC SPINCO was not integrated neither was CTF. MAGGIE AND THE REST OF THE VP'S TOOK BONUS. CRIMINAL! 1980 IBM MAINFRAME DPI GREEN ...
  • Missie E: Spectrum lied to me and said I did not pay them. When I brought my receipt and bill into the Spectrum office the lady said she remembered when I paid...
  • matt: what channel will sports tier be on...
  • Maureen O’Brien: I also think Charter Cable (spectrum) is a disgrace. Their billing info is a travesty of justice. I would like to know congressmen/women were agains...
  • Phil: I moved into a new build neighborhood late last year in Ohio, was excited to see (on their website, and verified by calling) that they were offering F...
  • U Marc: This is incorrect Information. XFi pods maxim throughput speeds on 2.4 Ghz band is 300MBPS and 867Mbps on the 5 Ghz band...
  • TJE: After 25 years of being a loyal Charter client, I am done. Rate increases, poor service, the worst customer service in history, being on hold forever...
  • Sherry: I also bought equipment and haven’t had very long also please let me know if you file a lawsuit will join...

Your Account: