Cable companies have grown in recent years by bundling high-speed Internet service and Internet phone service along with their digital TV subscriptions. But Bethpage, N.Y.-based Cablevision reported today that broadband and Internet phone growth continues to fall. Cablevision ended the second quarter with 2.2 million broadband subs and 1.4 million VoIP subs, representing a 15% year-over-year Internet sub growth and 42% year-over-year digital phone sub growth. But growth is slowing in both categories.
Cablevision Broadband Internet Subscriber Growth (year-over-year)
Cablevision Internet Phone Subscriber Growth (year-over-year)
This problem isn’t unique to Cablevision — NY-based Time Warner Cable reported similar results last week. And there is still room for growth: 35% of Cablevision’s customers don’t subscribe to their cable modem service yet, and 58% don’t yet subscribe to their Internet phone service. But competition is increasing as telcos like Verizon move deeper into Cablevision’s subscriber area with digital TV service and wireless companies like Sprint Nextel and Clearwire expand their wireless broadband services.
In the second quarter, Cablevision reported $208 million in operating income on $1.57 billion of sales, representing 30% year-over-year operating income growth and 12% revenue growth from a year ago, when it reported $160 million in operating income on $1.4 billion of sales.