Weak AT&T systems boost Mediacom

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If AT&T Broadband is actually sold, the new buyer can certainly look
forward to big financial improvements if Rocco Commisso's experience is any
guide.

The chairman of MSO Mediacom Communications Corp. said that since buying
800,000 subscribers from AT&T Broadband for $1.7 billion in July, he has
boosted cash-flow margins sharply form 31 percent to 39 percent.

Most of that gain came from the elimination of AT&T Broadband's corporate
overhead, which is substantially larger than that of other operators. Commisso
said the systems came with $27 million in unnecessary costs that he quickly
sliced.

The properties -- mostly midsized-city and small-town markets -- were
actually much higher than AT&T Broadband's 16 percent average at the time
they were sold.

Most operators, including Mediacom, run with margins around 45 percent. But
annual overhead costs totaled $38 per subscriber, or 3.4 percent of revenues.
Mediacom sliced that by more than 50 percent to 1.5 percent of revenues.

Now that the deal has doubled the size of Mediacom's portfolio, 'We intend to
generate more efficiencies in the AT&T assets,' Commisso
said.

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