Suddenlink parent Cequel reported growth in revenue, growth in basic video subscribers, and increased ARPU. The company said it expects to increase capital spending next year to upgrade its network; this is in accordance with its previously announced Project GigaSpeed.
The company added approximately 2,200 basic video customers, compared to a loss of 3,200 in the third quarter of 2013. Suddenlink said that was its best third quarter net gain ever. Digital video customers increased by approximately 16,000 customers during the third quarter of 2014, an improvement compared to an increase of 14,400 digital video customers in the third quarter of 2013.
On the broadband side, the company increased its residential customer base by approximately 32,200. In the like period a year ago, Suddenlink signed up 21,900 data subscribers. Suddenlink said this was its best Q3 ever for residential broadband additions. Commercial high-speed data customers increased by approximately 1,600.
Residential telephone customers grew by approximately 13,500 during the third quarter 2014.
The additions pushed Suddenlink’s subscriber totals to 1.17 million for basic video, 897,500 for digital video, 1.13 million for residential high-speed Internet, and 548,100 for residential telephone.
ARPU for the third quarter 2014 was $166.64, an increase of 9 percent compared to the third quarter 2013.
Notable is that during the quarter, Suddenlink permanently dropped all Viacom channels because Viacom was insisting on rate increases Suddenlink felt were too high.
Suddenlink Chairman and CEO Jerry Kent said in a statement, “We’ve maintained discipline from a pricing standpoint and have provided our customers with high-quality content. We did this in an environment where another market participant attempted to impose price increases that we deemed commercially illogical and not in the best interests of our customers.”
Programming costs still went up 9.7 percent.
The company reported third quarter revenue of $583.6 million, up 6.6 percent compared to the third quarter of the prior year, highlighted by high speed Internet revenue growth of 16.2 percent. Net income was $10.1 million for the third quarter 2014, compared to a net loss of $7.8 million for the third quarter 2013.
Capital expenditure in the quarter just completed amounted to $114.9 million; the company spent $89.7 million in the third quarter a year ago. During 2014, the company expects total capital expenditures to be approximately $410 million to $420 million.
“Starting in the second half of 2014 and extending through 2017, we expect to invest up to an additional $230 million of capital expenditures, above and beyond our normal expected capital expenditure levels, to significantly enhance our Internet speeds and ultimately position our network to offer speeds of one Gigabit,” Suddenlink reported.
This is Operation GigaSpeed, the company’s initiative to upgrade its data network headend equipment, replace any remaining deployed DOCSIS 2.0 customer premises equipment with DOCSIS 3.0 equipment, and complete its conversion to all-digital video.
“We expect to complete these enhancements in a phased, market-by-market approach, focusing first on our largest and most competitive markets,” the company said. “Once fully phased in, the plan calls for our flagship Internet speed to increase from 15 to 200 megabits and our top speed to increase from over 100 megabits to one gigabit in nearly 90 percent of our service areas. We expect to invest approximately $35 million of the total capital expenditures related to Operation GigaSpeed in the second half of 2014, with the remainder invested during 2015, 2016 and 2017. For the three months ended September 30, 2014, we incurred $18.4 million in capital expenditures related to Operation GigaSpeed.”
