Cox Communications, the fourth largest cable operator in the US, reported Q2 revenue of $1.4 billion, an increase of 14% over Q2 2002 and up from $1.366 billion in the prior quarter. Cox continues to gain traction in advanced services (including digital cable, high-speed Internet access and telephony). It also cited higher basic cable rates and a $5 price increase on monthly high-speed Internet access adopted in certain markets in Q4 2002 for its 14% increase in revenues year-over-year.
Some highlights, as of 30-June-2003:
- 6.3 million basic video customers, up 0.5% from 30-June-2002 and flat from the prior quarter.
10.7 million total revenue generating units (RGUs), up 2% for the quarter, driven by 6% growth in advanced-service RGUs for the quarter. Total RGUs and advanced-service RGUs were up 12% and 34%, respectively, compared to June 30, 2002.
Added 112,452 cable modem customers, ending the quarter with 1.7 million high-speed Internet customers, representing year-over-year growth of 50%. In Q1, Cox added 154,433 cable modem customers. The company cited the end of the school year and other seasonal factors for slower growth, but added that net gains are expected to increase again for the rest of the year. Seventy percent of new cable modem customers are converting from dial-up service.
Added 56,170 Cox Digital Telephone customers, ending the quarter with 0.8 million telephone customers, representing year-over-year growth of 45%. The Cox cable voice network is now handling 29 million calls per day. Cable phone penetration rates for existing Cox customers in Orange County, California has now reached 53%. Service bundling and integrated billing are keys to the success.
Cox said that is VoIP service trial in Roanoke, Virginia is proceeding "very well." The company believes that technology is now sufficiently mature for a major VoIP rollout to begin during 2004. Cox believes it is best positioned among the cable operators to succeed with a VoIP cable service.
Achieved Cox Digital Cable net additions of 69,100 customers, ending the quarter with 1.9 million digital cable customers. Cox Digital Cable is now available to 98% of the homes in Cox's service areas with penetration of the basic video customer base exceeding 30%.
Early results from VOD implementations indicate that VOD customers are buying twice as much video content as households with pay-per-view services.
Video on demand is now available in four markets and will be launched in five more markets by March 2004.
Reduced CAPEX to $337.2 million for the quarter, down 32% from Q2 2002. CAPEX in Q1 2003 was $325.7 million.
For the full year 2003, Cox expects year-over-year growth in basic video subscribers of just under 1%.
- In June 2003, Cox began to move its long distance voice traffic onto its national IP backbone. Cox is using Nortel Networks' Succession cable VoIP solution and Nuera Communications' media gateways. The companies confirmed that this is the first packet trunking deployment by a cable operator in North America.
In May 2003, Juniper Networks announced that Cox Communications had deployed its T-series routing platforms in a national IP backbone. Juniper's T320 platforms serve as peering points in Cox's new IP backbone.
