David Lieberman updates us on the Cablevision-Verizon “corporate gunfight” taking place in the suburbs of NYC. Charter and Verizon are skirmishing in Keller, Tex., home of the telecom’s first FiOs network and others are facing threats from Verizon and eventually AT&T. Cablevision, though, may be the most formidable cable competitor of all despite its relatively small size compared to Comcast and Time Warner. As Sanford C. Bernstein analyst Craig Moffett explains, “Cablevision’s writing the playbook on how to compete. They’ve started playing offense while the rest of the cable industry is still playing defense.”
Cablevision, with 3.1 million basic subs, was the first cable operator to make phone service available across its footprint and now had more 1 million phone subs or about 22 percent of homes passed. The company also sought to solidify its base before Verizon came in by offering a triple-play bundle for less than $100 a month. A former Verizon phone customer said his phone service alone cost $80-$90 that much; now he gets cable and high-speed, too, for a little more.
FiOS has its supporters, including those who complain about the service when they were Cablevision customers. Verizon says it is getting 10 percent sign-up from possible households but the cable operator says its competitor is only getting 2 percent of its potential customers. Bear Stearns estimates Verizon, which is adding about 3 million homes a year to its FiOS footprint, will have about 2.1 percent of Cablevision’s customers by 2010.
— Former cable exec Leo Hindery, who fought his own battle over the YES Network with Cablevision’s Dolan family, told Lieberman the situation is “very grim” for cable operators who won’t make the kind of hoped-for margins from new services. But, he added, the silimarity of product being offered doesn’t make it easy for Verizon, which “has to achieve penetration. When you have to achieve penetration against an incumbent with comparable technologies, then you tend to compete on price.”
— Most interesting numbers: it costs Verizon nearly $900 to add a potential home and another $715 for the 5-hour, 2-person job that connects a new subscriber home.
Subscriber content
?
Subscriber content comes from Gigaom Research, bridging the gap between breaking news and long-tail research. Visit any of our reports to learn more and subscribe.
Advertisement
Advertisement
Advertisement
Comments have been disabled for this post