Cablevision may launch WiFi voice service; warns of 'significant' impact from Hurricane Sandy

Cable operator loses 10,000 video subscribers in Q3 2012
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Cablevision (NYSE: CVC) may eventually use its extensive WiFi network in New York, New Jersey and Connecticut to market a voice service to subscribers, Cablevision CEO Jim Dolan told analysts on the company's third-quarter earnings call Tuesday.

Dolan spent much of the earnings call discussing the impact of Hurricane Sandy, noting that 535,000 Optimum customers still don't have power, and that Cablevision may permanently lose subscribers whose homes were destroyed by the super storm. But he also touted Cablevision's investments in building WiFi access points, saying that more than 47,000 of its hotspots remain functional in the tri-state region, where it Cablevision can still offer wireless broadband to subscribers that have lost power.

Dolan told an analyst near the end of the call that Cablevision may be able to use WiFi to deliver voice services to subscribers. "In the future, you could have a data product that includes voice," Dolan said.

Cablevision has trademarked the brand Optimum Mobile, and patented technology that could be used to offer a WiFi-based phone service. The MSO has said previously that it is looking at ways to offer a hybrid phone product that would rely on its WiFi infrastructure and cellular networks.

Questions about Sandy dominated Cablevision's third-quarter earnings call. Dolan and CFO Greg Seibert said most of the impact of the storm will be reflected in Cablevision's fourth quarter report. "Suffice it to say the impact could be significant," Seibert said.

Dolan said that Cablevision may also feel the impact in subsequent quarters, since it does not yet know how many subscribers have permanently lost homes in parts of New Jersey and and Long Island that were washed away by Sandy.

"We're in conversations with the power company. They have told us that there are certain areas that they have no plans to restore power for. I can only guestimate how many of them there will be. But there will be some," Dolan said.

Cablevision reported that it lost 10,000 video subscribers during the third quarter, but it picked up 28,000 high-speed Internet and 22,000 voice customers.

Dolan, who said in February that Cablevision would freeze the prices on its subscription prices, told analysts that the company is considering a rate hike. "We're keeping our options open. We do not want to announce a rate increase on our investor call. And as soon as we have something to say, we'll tell you," he added.

Cablevision reported a net loss of $3.8 million (1 cent per share), compared to net income of $39.3 million (14 cents per share) in the third quarter of 2011.

Also worth noting from Cablevision's third quarter earnings report and investor call.

  • Dolan said that Cablevision is looking at selling its Optimum West cable systems that it acquired from Bresnan Communications. "We have decided to explore a potential transaction," he said.
  • Dolan said Cablevision hasn't seen Verizon (NYSE: VZ) expand its FiOS network in the New York area, but that the telco is battling Cablevision with aggressive introductory offers to new subscribers, and extending the offer periods after they expire. "That's how they hang onto their subscribers. I don't think that's a sustainable model for them, and they will eventually need to go to regular pricing. But meanwhile, we are very much holding our own, and I think we will continue to do so," Dolan said.
  • Cablevision's Optimum Lightpath division generated $81.1 million in Q3 revenue, up 4.9 percent compared to this time last year.
  • Asked to gauge the impact that carriage deals Cablevision signed recently with CBS, NBCUniversal and other programmers could have on the MSO's programming costs, Dolan said, "Well, it won't lower them."

For more:
- see the release

Special Report: Cable in the third quarter of 2012

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Cablevision develops technology for WiFi-based mobile phone service
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