Cablevision Says They Won't Raise Rates in 2012
Though They're Cutting Back on Certain Promotions
For several years Cablevision wasn't really feeling the heat in their pricing battle with Verizon FiOS, but if their recently release fourth quarter earnings
are any indication, that's starting to change. The company's fourth quarter profits dropped 47%, in large part to the earnings lost from spinning off AMC Networks. Cablevision lost 14,000 video customers, but added 20,000 high-speed data customers and 31,000 digital voice subscribers.
Speaking on the company's conference call, CFO Gregg Seibert stated the company would be taking an additional hit by not imposing any rate hikes this year. On the flip side, Seibert also noted that they'll be cutting back on some of the lower-cost bundle promotions they've been using to keep pace with Verizon FiOS in the NYC metro area:
So, as Jim noted, 2012 will be a year of investment for Cablevision. I will reiterate that we are accelerating several capital projects and expect to see higher capital spending in 2012 than we incurred in 2011. And we expect that free cash flow will be lower in 2012 than what was generated in 2011....Our intention is to maintain discipline in our pricing and packaging, so though you may not have a rate increase this year, we have eliminated the very low price offers that have been in the market in the past few years.
There's still no word on why several Cablevision executives recently jumped ship
(including Tom Rutledge, who became Charter CEO), but the analyst speculation points to either a possible sale, or yet another effort at privatization by the Dolan family.