US cable operator Cox Communications showed the way in broadband subscriber count as it increased 3.7 million at the end of 2007, 11.3% annual growth. Calling itself the “pioneer of the three product bundle of digital telephone, video and Internet services,” Cox said more than 62% of its residential subscribers were bundling with two or more services. More than 30% were in a full three-product bundle.
Cox anticipates surpassing four million bundled customers in 2008. Cox and most other cable TV operators are missing a mobile phone service, which would give them a quadruple play to offer in their bundles. Cox, together with Comcast, Time Warner Cable and Bright House, has a seemingly troubled joint venture with Sprint called Pivot that’s supposed to give cablecos a mobile phone service to sell.
Cox added 357,000 net new residential phone customers in 2007, a 17.7% annual increase. It had 2.38 million telephone subscribers at the end of 2007.
Cox gleefully pointed out that while it was adding a third of a million phone subscribers during 2007, AT&T, Verizon, Qwest and Embarq cumulatively lost about 10 million residential phone customers. It of course did not point out the large increases in mobile phone subscribers that AT&T, Verizon Wireless and Qwest reported.
“Residential and commercial customers are increasingly looking elsewhere for their communications needs. While the telcos continue to focus their efforts at designing and deploying video services, we’re very happy to deliver the value their existing phone customers need,” said Cox president Pat Esser.
Cox is also going for the telcos’ commercial phone customers. Cox Business, its commercial services arm specializing in small to medium businesses, increased phone customers by nearly 30% and total customer relationships including broadband and pay-TV by over 16%. It said it meets the needs of businesses that are “underserved by the incumbent phone companies.”
As a privately owned company Cox does not have to publish its financial results to the general public but reported double-digit growth in each of its core digital services – digital cable, high speed internet and digital telephone. It said it had cut customer churn to record lows for each of these services.
Other statistics that Cox reported were 5.96 million total residential customer relationship, up 1.6%; 3.1 million digital cable subscribers, up 10.8%; and 557,000 “non-video” residential customers which grew at 24.5%.
Defending its pay-TV results, Esser said, “Despite fierce competition from phone and satellite companies, we saw less than a 0.4% reduction in basic video subscriptions, and digital penetration continues to grow (now 58% of basic) as customers are increasingly upgrading to enjoy high definition, on demand and DVR services.”
Esser said Cox’ early lead in selling bundles and its commitment to quality customer care “places us in a powerful competitive position.”
Cox spokesman David Grabert said demand for high definition TV remains very strong and is a significant driver in subscribers’ upgrading to digital, along with DVR and On Demand. Cox is testing DOCSIS 3.0, the technology that will allow it to offer super-fast speeds. No deployment dates have been announced. DOCSIS 3.0, he said, is a key factor in its competitive strategy.
Meanwhile US cable giant Comcast added just 1.7 million broadband subscribers during 2007, an increase of 15% but down from the 1.9 million it added in 2006. At the end of 2007 Comcast had 13.2 million broadband subscribers, 27% of the residences that its wires pass.
The broadband money keeps pouring in. With average monthly broadband revenue per subscriber of $43, Comcast’s broadband operations brought in $6.4 billion in 2007, an 18% increase.
Comcast is growing its digital phone business too – and at the expense of the telcos who continue to report declining residential phone numbers. It added over 2.5 million phone subscribers in 2007, a 61% increase over the 1.6 million it added in 2006. Comcast ended 2007 with a total of 4.4 million digital phone customers, 10.4% of the residences where it is available.
It increased the number of residences that it can provide phone service to by nine million for a total of 42 million – 86% of the residences in Comcast’s footprint.
Comcast added 2.5 million new digital cable TV subscribers in 2007, a 33% growth over 2006. Its total digital TV subscribers is 6.3 million and 42% of them took advanced services such as digital video recorders (DVR) and high-definition TV (HDTV). That’s up 36% from the 4.5 million it had a year ago.
Its revenue from pay-TV increased 7% to $17.7 billion in 2007. The company said the increase came from “growth in digital cable customers and increased demand for advanced digital features including ON DEMAND, DVR and HDTV, as well as higher basic cable pricing. Pay-per-view revenue increased 22% to $774 million in 2007.