Cablevision price cuts irk market
Mon Jun 21, 4:15 PM ET
Meredith Amdur, STAFF
Cablevision fired potentially the opening salvo in a cable vs. telco turf
war Monday, unveiling a cut-price triple-play bundle of video, data and
unlimited local and long-distance voice for $89.95 for new digital subs.
Current cable-only subs will be able to add high-speed Internet and voice
services for $29.95 each per month, for 12 months, when both services are
ordered together.
Wall Streeters, however, were scratching their heads Monday as to what was
behind the steep -- and, some analysts said, unnecessary -- price reduction.
Investors accordingly sent Cablevision stock down 3.5% to $21.22 as they
weighed the negative impact on margins.
The news dragged down the rest of the cable sector -- including Comcast and
Cox -- as investors fretted about a margin-crunching price war.
The Cablevision offer is the lowest-priced such package in the country and
could signal a new round of price wars between telcos serving up high-speed
digital subscriber lines and cable operators anxious to roll out their own
IP-delivered (via Internet) voice services.
"Our greatest fear remains, What will be the competitive response of the
RBOCs (regional Bell operating companies)?" Fulcrum analyst Rich Greenfield
said in a research note Monday. He expects the local phone companies could
discount their own DSL further, as well as launch low-cost
voice-over-Internet-protocol phone services. "It just feels like a price war
will inevitably suck margins and free cash flow out of the cable industry."
Cablevision was among the first cablers to offer a VoIP phone service, and
it currently has more than 100,000 subs paying $35 per month. The standard
monthly intro charges for high-speed data and digital cable are $45 and $40,
respectively.
_____
From: LOBO2999 [mailto:LOBO2999.1889mo@nobody.satelliteguys.us]
Sent: Monday, June 21, 2004 8:10 PM
To:
VOOM@yahoogroups.com
Subject: Re: [VOOM] Way to go Cablevision!!
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--
LOBO2999
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