Last week Cablevision also came out with its numbers and once again we tried to nail down just what it is doing in WiFi as well. It’s executives talked about lifting WiFi to 1 million hotspots and the words “both inside and outside our footprint” were included in this.
It’s tough to make assumptions here, but past comments from cable executives suggest that perhaps Cablevision had 150,000 planned commercial hotspots at the beginning of 2014, it also said back in 2013 that it now had 1 million Optimum broadband with WiFi, although we have to be careful, it means with WiFi devices which Cablevision controls – some are customer supplied and they probably all have WIFi.
So for Cablevision to announce that it had surpassed a goal of reaching one million WiFi public access points by year end, it could have meant simply that the Optimum WiFi homes had all been turned into Homespot gateways. However that comment about “outside our footprint” seems to suggest that under the Cable WiFi Alliance, it has access to perhaps a further 200,000 hotspots supplied in other territories by other cable companies (Comcast said that it was 250,000 collectively in January and would rise to 350,000 by mid -year).
If we take it to mean that there are perhaps another 200,000 to 250,000 homes out there inside the Cablevision footprint that it still has yet to upgrade to a second SSID, but that it could do this by year end and fulfil its part of the Cable WiFi Alliance bargain to saturate WiFi across the US by 2015.
Its statements seem to be coordinated with those of Comcast, that come early 2015 it will be ready to drop the bomb of whatever it plans to do with this WiFi. Right now Cablevision is pricing its Optimum WiFi way too high and has ARPUs that are unreachable by other cable operators. Its Average revenue per user is $152 a month, which is up $8, and for video homes this goes as high as $174 a month, and that is a rise of $11.7. And this is not about price increases. For the most part this is passing through sports rights charges from content providers. So the price has always been high and most homes continue to accept that.
Verizon is certainly making dents in the rate of Cablevision broadband customer acquisition, and for the first time that we can remember, Cablevision lost broadband subs this quarter, down 9,000 on the quarter.
When asked about it CEO James Dolan suggested that when it rolled out further uses for WiFi, that number would go up.
Analysts seem to be looking for a national MVNO across all the cable operators that uses WiFi First and falls back to cellular, but this draws no comments when suggested at results meetings. It may be simply that new phone apps, which offer TV on the go and harness what is rapidly becoming 10 million or more hotspots across the country (8.3 million Comcast, 1 million Cablevision, plus others) to serve data to those video apps.
Cablevision duly launched an upgrade to its Optimum TV app, which may well be a Trojan horse for video on the move from WiFi. Elsewhere Cablevision had revenues up 3.7% and TV subs off 29,000 and fixed voice lines down 7,000. We think of these as mostly over-pricing miscalculations, and feel these kind of numbers are reversible.
Cablevision was the first of the major US cable operator to harness WiFi aggressively as a wireless branch for its services and it said that the Optimum WiFi service now hosts over 250m sessions a month, averaging 4Gbytes of data per household each month and made the point that on average cellular data plans only offered 2GB a month.
At Comcast’s results call last week, it indicated just how far it intends to push its WiFi network, and revealed that out of 8 million public access points, only 7 million will be in-home gateways, suggesting that it will build at least 1m hotspots throughout the US either on its own or within the Cable WiFi Alliance. Capex for Cablevision is down on last year and will end up around the same as last year, executives said so it is not chasing Comcast in its capex heavy mission to install more and more WiFi.
Cablevision will launch a new voice product called HD Calling to reverse the number of fixed line phones it has lost this quarter.