UBS Media Conference News

Recession Scrambles Cable Companies' Expansion Plans

Customers May Choose Cellphones Over Landlines, Internet Service

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NEW YORK (AdAge.com) -- As cable subscriptions continue to outperform the rest of the media industry during the recession, the outlook for cable companies' other product offerings is somewhat cloudy.

Dave Watson
Dave Watson
At the 36th Annual Global Media and Communications Conference in New York, hosted by investment-bank UBS, Time Warner Cable and Comcast Corp. scaled back their predictions on subscriptions for phone and high-speed internet packages over the next three to five years, citing the acceleration of mobile-phone subscriptions in recent years.

Cable and much more
Dave Watson, exec VP-operations at Comcast Corp., said that as of the third quarter, Comcast had 6.1 million phone subscribers, which made the cable giant the nation's fourth-largest phone company. Phone subscriptions have been a key driver for Comcast's triple-play service in recent years, adding more value to subscription packages that include cable and high-speed internet.

"We felt we priced the product at the right price point," he said. "But when you have a slowdown in terms of less moving situations, there's less opportunity to sell phones."

Glenn Britt
Glenn Britt
Glenn Britt, president-CEO of Time Warner Cable, declined to make any detailed speculation about phone's long-term penetration, but suggested the recession was a key factor in recent landline cuts. "We've seen pretty significant substitution among our subscribers, and perhaps that's even driven by the economy. But we're still growing because we're taking share from the [telephone companies], but the substitution is still accelerating pretty rapidly."

Customer service improves
In order to accommodate the increased demand for its suite of products -- not to mention combat the consumer backlash that incited Bob Garfield's "Comcast Must Die" -- Comcast has beefed up its customer service in a big way over the past year and has seen major results. Mr. Watson said service calls have decreased by 4%, service-truck calls and repeat service-truck calls are down 6%, while customer satisfaction is up 10% on a year-over-year basis.

"We think this is one of those rare moments where we will become more efficient, at the same time raising the bar in customer experience," he said.

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