Cable operator revenues will prove resilient when fourth-quarter results are announced, argues Sanford C. Bernstein & Co. analyst Craig Moffet.

 

In some ways, cable results likely will mirror telco results as well, in the sense that growth will be seen in the newer lines of service, while there is negative growth in legacy lines of business.

 

In cable's case, that means entertainment video. For telcos, it is landline voice. Moffet expects Time Warner Cable, Comcast (News - Alert) and Cablevision Systems to report basic cable subscriber losses, but growth in the voice and broadband access categories that offset video subscriber losses by about 10:1 or 20:1 margin, with the biggest gains coming at Comcast.

                                               

Moffet points out that the majority of cable average revenue per user growth is tied to increased penetration of high-speed data and VoIP services, not video.

 

Moffet suggests that slower growth, or even some negative results, could occur in the premium services category, such as pay channel subscriptions, digital video recorder service or HDTV services. That would entirely consistent with past consumer behavior in recessions.

 

Leading telcos likely will have similar performances, many of us would predict. Landline voice losses will continue, but will be more than offset by gains in broadband, wireless and video.