The past few days, I’ve written a post or two about how in 2Q08, big cable “cleaned big telco’s clock.” I use the term big in recognition of the hundreds of small telcos across the U.S. who may not be experiencing a similar “beat down.” More than likely, these advantages will see-saw from competitor to competitor over time. I’m sure we’ll see big telco take it to big cable in quarters to come. But one particular circumstance is worth noting. It’s Cablevision’s continuing success in meeting the competitive challenge of Verizon FiOS. Cablevision reported somewhat envious numbers for 2Q08 that demonstrate they are in no way ceding their business to Verizon. Some facts to take notice of:
- Basic video subscriber additions up by 7K from 1Q08 – adding basic cable subs in this competitive environment is almost unheard of from cable companies
- Broadband customers additions up 52,000 or 2.2% from March 2008 and 227,000 or 10.5% from June 2007
- Digital voice customers up 81,000 or 4.8% from March 2008 and 367,000 or 26.2% from June 2007 – Cablevision leads all cable companies in voice penetration of homes passed at 37.6%
- Achieved ARPU per Basic Video Customer of $132.29 in the second quarter – another industry leading metric
- Cablevision intends to begin their migration to DOCSIS 3.0 and will also be deploying a mesh Wi-Fi network across their footprint, both of which will build additional value into their product portfolio
Achieving these results alone is impressive. Achieving them in the face of competition from FiOS is borderline amazing. This is not a single quarter phenomenon – Cablevision has been achieving these results for some time. It takes a little thunder out of the FiOS buzz and also reveals that FTTH triple play deployments are not bullet proof. Telecom carriers who are looking to FTTH to address their competitive challenges, especially in the face of declining DSL adoption, should look at this example as a cautionary tale. A FTTH network alone may not be enough. When faced with a competitor who is more than willing to take FTTH head on, telcos could find themselves in a “dog fight.” Cablevision has proved that they cannot only compete against one (with billions in backing by the way), they can succeed against it. As FiOS moves into more Cablevision territory throughout New York City, this pitched battle will be worth watching.
