News Articles

TOP 25 CABLE AND SATELLITE OPERATORS

Systems are growing by offering services from DTV to telephony 8/08/2004 08:00:00 PM Eastern
The Leaders
Rank Company Basic Subscribers
*First quarter 2004
**Dec. 31, 2003
***Estimate by Paul Kagan Associates for late 2003
Source: Except where noted, all information was supplied by the companies and covered either the end of the second quarter of 2004 or through June or July 2004.
1 Comcast 21,477,000
2 DirecTV 12,640,000*
3 Time Warner Cable 10,909,000
4 EchoStar 10,000,000*
5 Cox 6,262,688
6 Charter 6,192,000*
7 Adelphia 5,380,729
8 Cablevision 2,941,180*
9 Advance/Newhouse 2,136,000
10 Mediacom 1,533,000*
11 Insight 1,282,400
12 Cable One 711,900
13 Cebridge 440,000
14 RCN 370,197**
15 Bresnan 311,000*
16 Service Electric 293,000
17 WOW 288,000***
18 Atlantic Broadband 255,000
19 Susquehanna 234,051*
20 Armstrong 216,530
21 Midcontinent 200,000
22 Northland 198,466
23 Blue Ridge 178,233
24 Knology 174,957
25 Buckeye 149,640

These are changing times for cable operators. Two of the largest of them are in the midst of Chapter 11 bankruptcy proceedings, and the stock prices of many of the major multisystem operators (MSOs) are disappointing to shareholders. Indeed, one cable giant, Cox Communications, last week announced plans to take itself private so it could operate without having to satisfy shareholder demand for a higher per-share price and work instead on longer-term strategies without worrying about the imediate bottom line (see page 8).

The Top 25 MSOs are chasing new customers by improving digital TV, high-speed data, VOD, HD and telephony. As noted in the listing on the pages that follow, the two DBS operators, DirecTV and EchoStar, combined serve 22 million subscribers, more than the single largest cable operator, Comcast. And, with Rupert Murdoch now in control of DirecTV, cable operators know a battle for subscribers is not far down the road.

DBS providers continue to gain subscribers at the expense of MSOs. In the first quarter of 2004 alone, EchoStar and DirecTV grew by 820,000 subscribers. They now have 22.6 million subscribers while the top 23 MSOs serve 62.1 million basic customers, virtually the entire multichannel universe.

There were a few shifts in the Top 25 from the 2003 ranking. After taking over the old Classic Communications systems, Cebridge Communications moved into the No. 14 slot that Classic held; Atlantic Broadband Finance, which has closed a $765 million deal to buy systems from Charter, jumped up to No. 18; and Knology has expanded to become the No. 23 operator (from No. 28 in a year ago). Tele-Media, the No. 16 operator in 2003, dropped off the list after Adelphia decided to take over direct management control of systems serving about 145,000 subscribers.

Also off the list is Millennium (No. 24 last year), which slipped from 153,200 subscribers to 127,000 this year.

More fluctuations are inevitable in the next few months as operators consider bidding for all or part of Adelphia's cable systems. Major operators like Time Warner Cable, Comcast and Cox rank among the potential buyers, but some smaller players might also try to acquire Adelphia systems. Tele-Media, for example, has expressed interest in acquiring those it used to manage.

Low-priced digital-TV packages offered by DBS providers have slowed the growth of cable digital subscribers, but cable operators hope they can boost digital penetration rates with triple-play offerings and by rolling out VOD, digital-video-recorder (DVR) and HD services. Among cable operators that report penetration rates for their digital services, Time Warner Cable (TWC) led, with 42% penetration of digital subscribers, followed by Advance/Newhouse (40.5%), Comcast (37.5%), Cox (36%), and Cablevision (35.9%) and Bresnan (34%).

Even more-impressive gains were posted in the high-speed-data (HSD) subscriber counts, which grew by 20%-40% at various MSOs in the last year. The operators reporting HSD customers now collectively service 17.9 million customers.

Many operators also report that they are successfully rolling out DVRs and HD-enabled set-top boxes. Time Warner Cable now provides 591,000 set-top boxes with DVR functionality; Advance/Newhouse has deployed 111,000.

VoIP (voice-over-Internet Protocol) service is another hot topic. Many operators say they will test the technology later this year and launch services sometime in 2005. For some, though, the technology is already starting to have an important impact. Early adopters Comcast and Cox have more than a million phone customers each, and TWC promises to offer phone services in all its 31 divisions by year-end.

Comparisons based on the data should be used with care. Because this report was researched during the middle of the second-quarter earnings season, a number of companies were scheduled to report their subscriber numbers after press time. Also, companies emphasize different financial measures and compute penetration rates in different ways.

Largest Digital-TV Providers
Rank Company Digital Subscribers
*First quarter 2004
Source: Except where noted, all information was supplied by the companies and covered either the end of the second quarter of 2004 or through June or July 2004. Companies not listed either did not have enough subscribers to make the top 20 or did not provide a breakdown of their digital customers.
1 DirecTV 12,640,000*
2 EchoStar 10,000,000*
3 Comcast 8,064,000
4 Time Warner Cable 4,610,000
5 Charter 2,657,400*
6 Cox 2,278,523
7 Adelphia 2,015,346
8 Cablevision 1,055,720*
9 Advance/Newhouse 64,000
10 Insight 418,200
11 Mediacom 372,000*
12 Cable One 220,400
13 Bresnan 106,000*
14 Atlantic Broadband 83,500
15 Susquehanna 56,958*
16 Service Electric 45,000
17 Armstrong 44,200
18 Buckeye 40,698
19 Midcontinent 40,000
20 Blue Ridge 24,350
Top Cable-Modem Providers
Rank Company High-Speed DataSubscribers
*First quarter 2004 ** Dec. 31, 2003
Source: Except where noted, all information was supplied by the companies and covered either the end of the second quarter of 2004 or through June or July 2004. Companies not listed either did not have enough subscribers to make the top 20 or did not provide a breakdown of their digital customers.
1 Comcast 6,005,000
2 Time Warner Cable 3,548,000
3 Cox 2,246,109
4 Charter 1,653,000*
5 Adelphia 1,241,166
6 Cablevision 1,128,930*
7 Advance/Newhouse 702,900
8 Mediacom 302,000*
9 Insight 273,900
10 RCN 174,898**
11 Cable One 152,300
12 Armstrong 85,000
13 Knology 77,174
14 Midcontinent 65,000
15 Susquehanna 55,875*
16 Atlantic Broadband 45,000
17 Bresnan 44,000*
18 Cebridge 40,000
19 Buckeye 33,167
20 Service Electric 16,000

1. Comcast Cable

Steve Burke, president, Comcast Cable Communications/COO, Comcast Corp.
NASDAQ symbols:
CMCSA, CMCSK
Basic subs/penetration:
21,477,000/ 53.3%
Digital subs/penetration:
8,064,000/37.5%
HSD subs/penetration:
6,005,000/16.1%
Phone subs/penetration:
1,225,000/12.5%
Average revenue per sub:
$74.95
2003 revenue:
$17.39 billion
2003 operating income before depreciation and amortization:
$6.35 billion

2003 basic-sub rank:
1
Since taking over the old AT&T systems in October 2002, Philadelphia-based Comcast has improved the operating performance of those systems, which had lost 483,000 subscribers in 2002, while continuing to boost the numbers at its own, older systems.
Comcast expects to produce $7.5 billion worth of cable operating cash flow in 2004, an 18% bounce from 2003. In recent quarters, it has enjoyed some impressive operating gains, with digital subscribers increasing by 15.8% from second quarter 2003 to June 30, 2004, and data subscribers spiking by 36.8%. During 2004, Comcast also expects to add as many as 1.6 million high-speed-data customers and up to 1 million digital subscribers. About 600,000 homes currently have HD set-top boxes.
Comcast has stopped aggressively marketing its existing phone service until it can roll out VoIP in 2005. After suffering some defections, it expects its basic-subscriber base this year to be about what it was in 2003.

2. DIRECTV

Mitchell Stern, president/CEO
NYSE symbol:
DTV (Fox Entertainment Group, a publicly traded 82% owned subsidiary of News Corp, owns 34%)
Basic subs:
12.64 million*
Average revenue per sub: $63.60*
2003 revenue:
$7.70 billion
2003 operating profit before depreciation and amortization:
$956 million
2003 basic-sub rank:
2
*First quarter 2004, includes National Rural Telecommunications Cooperative subscribers that take DirecTV programming
One major reason for cable's slumping basic-subscriber counts and disappointing stock prices can be found at the El Segundo, Calif., headquarters of DirecTV, where Rupert Murdoch's new management has been aggressively marketing the service, adding new programming, and planning the rollout of advanced set-top boxes with interactive TV and DVR functions. It's also capitalizing on Fox's sports programming, with plans to offer up to 100 HD games on its NFL Sunday Ticket package, and the operator continues to offer more local channels. In June, local stations were available to DirecTV customers in 88 markets. People are noticing: In first quarter 2004, DirecTV added 460,000 customers, but marketing costs to get them were a hefty $645 per head. Some analysts are disappointed by the first-quarter cash flow of $145 million. Second-quarter numbers were being announced just as this report was going to press.

3. Time Warner Cable

Glenn Britt, chairman/CEO
NYSE symbol:
TWX
Basic subs/penetration:
10,909,000/57%
Digital subs/penetration:
4,610,000/42%
HSD subs/penetration:
3,548,000/19%
Average revenue per sub:
$75.39
2003 revenue:
$7.23 billion
2003 adjusted operating income before depreciation and amortization:
$2.99 billion
2003 basic-sub rank:
3
Time Warner Cable lost 21,000 basic subscribers in the second quarter of 2004, but most of its other numbers remained strong. Over the past year, it has added 124,000 digital-TV subscribers, a 13% increase, and 127,000 high-speed-data subscribers, a 24% bounce. A 25% increase in HSD revenues and price hikes for basic packages allowed the company to increase its cable revenues by 10% in the second quarter and improve adjusted operating income before depreciation and amortization by 9%. Average revenue per basic subscriber also increased 10%.
Over the year, the company expanded the number of homes with DVRs to 591,000, 18% of its digital-video customers, and the number of VOD homes to 1.3 million, a 28% penetration. And It has expansive plans for telephony. By the end of the year, phone services will be available in all 31 divisions, up from 15 today. Further growth could come through acquisitions, but, during a second-quarter earnings call, Time Warner Chairman/CEO Richard Parsons stressed that the company will be tight-fisted.

4. EchoStar

Charles Ergen, chairman/CEO
NASDAQ symbol:
(DISH)
Basic subs:
10 million*
Digital subs:
10 million*
Average revenue per sub:
$51.76**
2003 revenue:
$5.7 billion
2003 net income:
$225 million
2003 basic-sub rank:
4
*June 2004 **First quarter 2004
EchoStar Communications passed the 10 million-subscriber mark in June, more than doubling its subscriber base in four years. It offers less expensive programming packages coupled with aggressive marketing to ethnic subscribers. Also, in the recent JD Power survey of customer satisfaction, EchoStar tied with DirecTV for the top spot with a 71 rating, much higher than the nearest cable competitor, Cox, which had a 63 rating. But EchoStar faces challenges. In the first quarter of 2004, the cost of acquiring new subscribers jumped 26% to $604, and free cash flow declined 20% to $224 million.
To compete against DirecTV, EchoStar continues to add local broadcast signals to its offerings and now provides local signals in all 50 states. EchoStar teamed with SBC Communications to provide bundled video and DSL services, and, in the first quarter, that brought EchoStar 40,000 new subscribers.

5. Cox

Jim Robbins, president/CEO
NYSE symbol:
COX (Cox Enterprises owns approximately 63%)
Basic subs/penetration:
6,262,688/60%
Digital subs/penetration:
2,278,523/ 36%
HSD subs/penetration:
2,246,109/21.7%
Phone subs/penetration:
1,133,650/20.8%
2003 revenue:
$5.8 billion
2003 operating income:
$586.9 million
2003 basic-sub rank:
6
Big changes are afoot: Last week, Cox Communications announced a $7.9 billion plan to buy out shareholders and take the company private so that Cox won't have to be a slave to its share price.
Cox was the first cable operator to aggressively introduce bundling, rolling out a triple play of video, voice and data in its Los Angeles systems in 1997. Good plan: Cox was one of the few cable companies to increase its basic-subscriber counts in the past year, seeing 0.6% growth from second quarter of 2003 to the same period in 2004. And, once again, it got the highest customer-service ranking of any MSO in the J.D. Powers annual survey.
The MSO added 97,517 high-speed-data subscribers in second quarter 2004, a 34% increase over a year ago, and 66,265 telephony subscribers, a 35% jump.

6. Charter

Carl Vogel, president/CEO
NASDAQ symbol:
CHTR
Basic subs/penetration:
6,192,000/52%*
Digital subs/penetration:
2,657,400/23%*
HSD subs/penetration:
1,653,000/16%*
Phone subs:
26,300*
Average revenue per sub:
$63.75*
2003 revenue:
$4.819 billion
2003 adjusted EBITDA:
$1.217 billion
2003 basic-sub rank:
5
*First quarter 2004
Since revelations of accounting irregularities hammered Charter Communications' stock in 2002, the St. Louis-based operator has spent two years reorganizing operations. The company hit on a plan to sell "non-strategic" systems serving about 600,000 subscribers. Sales proceeds and improved results gave Charter a negative cash flow of about $70 million in 2003, a substantial reduction from the $1.5 billion a year before.
Charter added 437,000 high-speed-data customers in 2003, and the company's policy of offering data services at the same price to non-video customers helped attract another 125,200 in first quarter 2004. Charter reduced its basic-subscriber losses and, in the first quarter, gained 68,800 digital-video subscribers, a big bounce from the comparable quarter in 2003, when it lost 31,500 digital customers. CEO Vogel says 2004 is the year Charter will "regain our operational momentum."

7. Adelphia

William Schleyer, chairman/CEO
Ownership:
In Chapter 11 bankruptcy-protection proceedings
Basic subs:
5,380,729
Digital subs:
2,015,346
HSD subs:
1,241,166
2003 basic-sub rank:
7
Following the massive accounting scandal at Adelphia Communications that pushed the MSO into bankruptcy protection in June 2002, a new management team led by industry veteran William Schleyer began working to turn around its operations, which were bleeding subscribers.
Under his direction, the company has added more than half a million HSD subscribers and upgraded its systems. Today, about 93% of Adelphia customers have access to two-way digital-TV and HSD services, up from only two-thirds in late 2002.
But the company continued to lose subscribers—more than 90,000 in 2003—and the prospects of Adelphia's surviving as a separate company remain clouded.
If Adelphia is broken up, analysts have valued the systems at $17 billion to $21 billion, with Time Warner, Comcast and Cox among the possible bidders.

8. Cablevision

James Dolan, president/CEO
NYSE symbol:
CVC
Basic subs/penetration:
2,941,180/35.9%*
Digital subs/penetration:
1,055,720/35.9%*
HSD subs/penetration:
1,128,930/25.6%*
Phone subs:
81,455*
Average revenue per sub:
$79.02*
2003 revenue:
$4.2 billion
2003 adjusted operating cash flow:
$1.1 billion
2003 basic-sub rank:
8
*First quarter 2004
In July, the company took an important step toward spinning its operations off into two companies. If its plan goes through, Cablevision Systems will hold the cable operations and a variety of other assets, and Rainbow Media Enterprises will own Rainbow DBS (called Voom), Rainbow Programming and Rainbow Movies.
On the cable side, the company lost 19,600 basic subscribers in 2003 and another 820 in the first quarter of 2004, the most recent data available at press time. But company executives believe basic subscribers will grow slightly in 2004, and the company's other offerings have been growing at a very healthy rate, adding 150,000 digital subscribers, 71,900 high-speed-data subscribers and 42,200 VoIP customers in the first quarter alone. That has boosted monthly revenues per subscriber by 18% between the first quarter of 2003 and the first quarter of 2004 and produced a 17% increase in telecommunications revenues.

9. Bright House

Robert Miron, chairman/CEO
Ownership:
Private (Advance/Newhouse Communications and Time Warner Entertainment)
Basic subs/penetration:
2,136,000/58.6%
Pay units/penetration:
1,628.000/76.2%
Digital subs/penetration:
864,000/40.5%
HSD subs:
702,900
2003 basic-sub rank:
9
As part of the restructuring of Time Warner Entertainment, Advance Newhouse Communications took over management control of 2.1 million cable subscribers in the spring of 2003 and then rebranded the operations as Bright House Networks. The systems cover several large markets, including Tampa/Central Florida systems, which are contiguous and form one of the country's largest cable clusters. Advance/Newhouse increased its basic customers by about 1.5% in 2003. Digital also showed a healthy bounce, growing by 93,400 in 2003.
To continue those gains, the company remains committed to rolling out new services. Currently, VOD and high-speed data are available to about 95% of all Bright House customers.

10. Mediacom

Rocco B. Commisso, chairman/CEO
NASDAQ symbol:
MCCC
Basic subs/penetration:
1,533,000/44.4%*
Digital subs/penetration:
372,000/24.3%*
HSD subs/penetration:
302,000/10.0%*
Average revenue per sub:
$57.10*
2003 revenue:
$1 billion
2003 operating income:
$132.4 million
2003 basic-sub rank:
10
*First quarter
Over the past five quarters, DBS providers have been chipping away at Mediacom's customer base, and the operator lost 59,000 basic customers between the end of 2002 and the first quarter of 2004. Digital subscribers declined by 11,000 in the first quarter of this year, but high-speed-data customers jumped by 42,000 to 302,000.
Mediacom is adding local channels and pumping up marketing, and it has introduced a less expensive (but slower) data package. The company hopes to have HD services available in more than 80% of its digital homes by the end of 2004. Sometime late this year, it plans to add phone services to its product mix. Management expects cash flow to increase by 4%-7% to at least $425 million and predicts that Mediacom could lose another 2%-2.5% of its subscriber base this year. Mediacom was releasing second-quarter earnings as this report was being prepared.

11. Insight

Michael Willner, president/CEO
NASDAQ symbol:
ICCI (Comcast owns 50%)
Basic subs/penetration:
1,282,400/54.6%
Digital subs:
418,200
HSD subs/penetration:
273,900/12%
Phone subs/penetration:
61,600/8%
Average revenue per sub:
$64.76
2003 revenue:
$902.6 million
2003 operating income:
$155.3 million
2003 basic-sub rank:
11
By the end of the second quarter of 2004, 97% of Insight Communications' customers were in areas served by a two-way, high-capacity network. That investment helped the company boost its revenues by 12% and its operating cash flow by 13% over last year. While basic subscribers declined over the past year by about 13,400, it saw healthy increases in phone and digital subscribers, and the number of HSD customers spiked by 42%.
The company has rolled out HDTV and VOD in most markets and has been one of the most aggressive operators in interactive TV. The company expects to generate about $50 million in free cash flow and 11% or 12% revenue growth this year.

12. Cable One

Thomas O. Might, president/CEO
NYSE symbol:
WPO (The Washington Post Co.)
Basic subs:
711,900
Digital subs/penetration:
220,400/31%
High-speed subs:
152,300
2003 operating revenue:
$459.4 million
2003 operating income:
$88.4 million
2003 basic-sub rank:
12
To bolster its flight against satellite, Cable One froze basic rates in 2003 and offered a $1,000 bonus to every employee of systems that gained subscribers. That strategy paid off: The company gained about 2,500 basic subscribers in 2003, a major turnaround from 2002, when its systems lost 36,000. Price hikes earlier this year, however, have slightly reduced basic-subscriber counts, which were down about 2,600 since the second quarter of 2003.
Operating in smaller markets, the company has taken a cautious approach to new technologies; it was the last major MSO to roll out digital-TV and HSD services. Those products are now, however, an essential part of its mix, with HSD subscribers nearly doubling since the end of 2002. The MSO has rolled out HDTV services and began offering DVRs last spring. Telephony's coming, too.

13. Cebridge Connections


Jerry Kent
, CEO
Ownership:
Private
Basic subs:
440,000
HSD subs:
40,000
2003 basic-sub rank:
14
Formerly known as Classic Communications, this fast-growing company is led today by Jerry Kent, the former CEO of Charter Communications. It acquired several Houston-area systems from Shaw Communications in mid 2003. So far this year, it has acquired systems from Alliance Communications Partners, LP (January 2004), Thompson Cablevision (March 2004), and Tele-Media Corp., pushing its subscriber counts up to about 440,000 customers in 18 states. Later this year, the company is scheduled to close on a deal to acquire the assets of USA Media, which would further boost its subscriber count to about 480,000. By the end of 2004, it will have upgraded systems serving about 80% of its customers.

14. RCN

Dave C. McCort, chairman/CEO
Ownership:
In Chapter 11 bankruptcy-protection proceeding
Basic subs:
370,187*
HSD subs:
174,898*
Phone subs:
246,711*
Average revenue per sub:
$94.37**
2003 revenue:
$484.9 million
2003 net loss:
$499.1 million
2003 basic-sub rank:
13
*Dec. 31, 2003 **First quarter 2004
Over the past year, RCN executives have worked to revamp the heavily indebted overbuilder's balance sheet. Debt was reduced from $2.7 billion in 2001 to $1.7 billion in 2004, and the company put some systems on the block, selling its Princeton, N.J., operation for about $245 million and Carmel, N.Y., system for $120 million. In February, RCN's management began negotiating with bondholders to further reduce its debts. The company expects to emerge from bankruptcy protection in the fourth quarter. Despite its financial troubles, it continues to roll out new services and post reasonably good operating numbers.

15. Bresnan

William Bresnan, president/CEO
Ownership:
Private (William Bresnan and other investors, including Comcast)
Basic subs/penetration:
311,000/54.4*
Pay units:
253,000*
Digital subs/penetration:
106,000/34%*
High-speed subs:
44,000*
2003 basic-sub rank:
15
*First quarter 2004
William Bresnan, a cable-industry pioneer, got out of the business in 1999 but returned four years later, spending $525 million to acquire Comcast systems in Colorado, Montana, Wyoming and Utah, a deal that also gave Comcast an equity interest in the company. Since then, Bresnan Communications has been focused on a $200 million rebuild of the systems, which should be about 96% complete in the third quarter, notes Executive VP, Operations, Steve Brookstein: "We're doing in 12 to 18 months what the industry did in four years."

16. Service Electric Television

Margaret Walson, CEO
Ownership:
Private (Walson family)
Basic subs/penetration:
293,000/70%
Digital subs:
45,000
High-speed subs:
16,000
2003 basic-sub rank:
16
Founded in 1948 by John Walson, Service Electric has the distinction of being the country's first cable system. Today, it's still run by his family, with Margaret Walson serving as CEO and her son as president.
Service Electric has rolled out HD service in about two-thirds of its footprint and plans to offer the service in all areas by first quarter 2005. It plans to begin rolling out VoIP in early 2005 and hopes to have DVRs and VODs available in most communities by the middle of next year.

17. WOW

Colleen Abdoulah, president/CEO
Ownership:
Private
Basic subs:
288,000*
2003 basic-sub rank:
17
*2003 estimate by Paul Kagan Associates
WOW, which sold its Denver operations in 2003, is an overbuilder offering telecommunications services over the old Ameritech systems in four states. It does not release any data on its subscribers or finances.
To lure subscribers away from its main competition, incumbent cable operators, WOW attempts to offer attractive bundles and a wider range of Internet services. It has rolled out HD and DVR services in most of its markets but has no immediate plans to offer telephony.

18. Atlantic Broadband

David Keefe, CEO
Ownership:
Private
Basic subs:
255,000
Digital subs/penetration:
83,500
HSD subs:
45,000
2003 basic-sub rank:
New to list
Founded by cable veterans, David Keefe and Edward Holleran, Atlantic Broadband Finance jumped into the top-25 ranking with a March $765 million deal to purchase systems with 228,000 subscribers from Charter.
Since then, the company has been working to rebrand the operations and to roll out new services. Keefe notes that, after rebranding its systems in May, it relaunched its digital package in July. It has also begun offering a slower but less expensive data service and has increased the speed for its main cable-modem offering. In August and September, it will begin rolling out DVRs and hopes to launch VoIP in 2005. By late 2004 or early 2005, it hopes to have upgraded systems serving about 93% of its customers so they can get HD and DVR services.

19. Northland

John Whetzell, chairman
Ownership:
Private
Basic subs/penetration:
198,466/57%
Pay units/penetration:
96,635/49%
Digital subs/penetration:
20,322/11
HSD subs:
2,499
Average revenue per sub:
$47.60
2003 basic-sub rank:
20
Northland Communications, founded 23 years ago, sold systems serving about 40,000 subscribers in Washington and South Carolina in 2003, leaving it with operations in nine states. Digital tiers, which were first rolled out in 2001, are now available in more than 90% of Northland's subscriber homes. In 2004, the company has been focusing on the rollout of HSD services. There are no immediate plans to launch VOD services.

20. Armstrong

Jeff Ross, president
Ownership:
Private (Armstrong Holdings)
Basic subs/penetration:
216,530/70.4%
Pay units/penetration:
82,500/38%
Digital subs/penetration:
44,200/20.5%
High-speed subs/penetration:
85,000/39.5%
2003 basic-sub rank:
19
This efficient cable operator is holding its own. It slightly expanded its subscriber count over the last year, gained market share for high-speed-data products, and attracted 4,250 HD and 3,000 DVR subscribers. Testing for VoIP is set for late 2004, with a launch in 2005.

21. Knology Holdings

Rodger L. Johnson, president/CEO
NASDAQ symbol:
KNOL
Basic Subs:
174,957
High-speed subs:
77,174
Phone subs:
127,859
Average revenue per sub:
$46.95
2003 revenue:
$172.9 million
2003 EBITdA:
$33 million
2003 basic-sub rank:
New to the list
Knology vaulted into the top 25 with the acquisition of about 60,000 Verizon Media subscribers in Florida and California. The company is focusing on the South and, in May, announced plans to sell the Cerritos, Calif., systems for about $14.8 million.
Faced with heavy debt, the MSO's predecessor filed a Chapter 11 reorganization plan in September 2002. After emerging from bankruptcy protection, the new Knology went public last December, raising about $56 million in one of the first cable-sector IPOs since the telecom bubble burst in 2001. The company has used most of the IPO money to complete the purchase of systems and to upgrade the Florida systems, an overbuild competing with Bright House.

22. Susquehanna

James Munchel, president/COO
Ownership:
Private (Susquehanna Media)
Basic subs/penetration:
234,051/66.9*
Digital subs/penetration:
56,958/24.3%*
HSD subs/penetration:
55,875/18.4%*
Telephony customers/penetration:
9,000/25%*
2003 basic-sub rank:
21
*First quarter 2004
Susquehanna Communications last year spent $120 million to acquire a 30,000-subscriber system in Carmel, N.Y., from RCN Corp. That put the company in the voice-over-cable business for the first time, and it plans to test a VoIP system in Williamsport, Pa., this year, with a launch in 2005.
Susquehanna plans to launch DVRs in York, Pa. in late 2004 and expand those offerings next year. It has big plans for HD and beefed up its HSD offering by adding a tier of Internet content.
More acquisitions could be on the way once the company completes construction of a new network-operations center and consolidates its call-center functions. But no deals are imminent.

23. Midcontinent

Mark Niblick, president/CEO
Ownership:
Private (Midcontinent Media and Comcast Corp.)
Basic subs/penetration:
200,000/67%
Pay units/penetration:
80,000/40%
Digital subs/penetration:
40,000/15%
HSD subs/penetration:
65,000/21%
Phone customers/penetration:
20,000/14%
2003 basic-sub rank:
22
Midcontinent, which manages systems it jointly owns with Comcast in four states, equaled or exceeded most of its subscriber goals over the past year, adding 15,000 data subscribers, 15, 000 digital subscribers and 10,000 telephony customers. VP of Public Policy Tom Simmons attributes much of that success to better customer service. Over the past year, it has doubled the speed of its high-speed-data product and, in the next two years, plans to expand its rollout to 55 more communities and small towns.

24. Blue Ridge

Fred Reinhard, president
Ownership:
Private (Pencor Services)
Basic subs:
178, 233
Digital subs/penetration:
24,350/12%*
High-speed subs/penetration
37,652/12%*
2003 basic-sub rank:
23
Blue Ridge is working to bolster its competitive position against satellite by adding VOD, SVOD, DVRs and HD services to its digital offerings. DVR services were launched in July 2004, and the company has been adding VOD programming. HD, DVR and VOD services are now available in most markets, helping boost the company's digital-subscriber numbers by more than 10,000 in the past year. HSD subs have climbed by more than 11,000. It launches VoIP in some markets next year.

25. Buckeye CableSystem

Walter H. "Chip" Carstensen, president/general manager
Ownership:
Private (Block Communications)
Basic subs/penetration:
149,640/55.1%
Pay units/penetration:
36,446/20.5%
Digital subs/penetration:
40,698/27.2%
HSD subs/penetration:
33,167/22.2%
2003 basic-sub rank:
25
Although Buckeye lost about 3,000 basic subscribers in the past year, it has posted healthy gains elsewhere as it beefed up its digital offerings, rolling out HD and VOD services. Since the middle of 2003, it added more than 12,000 pay units, more than 7,000 digital subscribers and more than 8,000 high-speed-data customers.

 

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