Cable Technology Feature Article
Cablevision Increases Price of High Speed Internet Service after a Decade
By Tabitha Naylor, Contributing Writer
The fifth largest U.S. cable company, Cablevision Systems (News - Alert) (News - Alert) Corporation, in early 2013, will be increasing the price of its high speed Internet service for all users by $5 a month. In nearly a decade, this is the first increase for broadband. In an e-mailed statement, the company stated that for Internet customers who aren’t currently receiving promotional pricing, the new pricing will result in an average increase of 3.2 percent on monthly bills.
Having 3.25 million video customers and about three million Internet subscribers, Cablevision in the year 2012, did not increase rates for video, broadband, or phone service. With more than 50,000 indoor and outdoor hotspots that are free to Internet customers, New York-based cable operator, the Bethpage, has spent $140 million improving its infrastructure and building the largest Wi-Fi network in the nation.
Image via Shutterstock
“This is a huge deal. Investors have been scared because of the expenses related to Hurricane Sandy. The fact they feel they can raise prices is fantastic,” said Amy Yong, an analyst at Macquarie Securities in New York, in an interview.
Gregg Seibert, chief financial officer for Cablevision, stated that the costs from damages and crediting customers for outages due to Hurricane Sandy that pounded the U.S. Atlantic Coast last month could be significant.
Tom Eagan, an analyst with Canaccord Genuity Corp., stated that in the fourth quarter the hurricane may result in a decline of as much as 30 percent in adjusted operating cash flow. On November 27th, Eagan downgraded his rating on Cablevision to hold from buy. According to the statement, phone and cable-TV prices will not be increased.
With a portfolio of operations that includes a full suite of advanced digital television, voice and high-speed Internet services, valuable local media and programming properties, and movie theatres, Cablevision Systems Corporation was founded in 1973 and is a recognized telecommunications and media company.
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Edited by Brooke Neuman