Cox Bundled Broadband Works

Solid growth in new services fuels healthy financial results for Q1. Meanwhile, Cox and EarthLink agree to test sharing its cable networks with independent ISPs.

by ISP-Planet Staff [April 27, 2001]

Cox Communications, Inc. this week reported financial results for the first quarter of 2001. Jim Robbins, Cox president and chief executive officer said 2001 is off to a strong start.

"We made significant gains in selling advanced communications services and achieved solid financial and operational results," Robbins said. "We also added 271,000 new-service revenue generating units (RGUs) in the first quarter, putting us on track to achieve our stated goal of adding more than 1 million new-service RGUs during 2001.

Robbins attributed much of the cable company's growth to its successful self-install cable modem program and cable telephony service bundles.

"Additionally, we experienced vigorous growth in residential telephone service, adding about 4,000 customers per week by the end of March, achieving 11 percent penetration of telephone ready homes," Robbins said. "Our bundling strategy is continuing to yield positive results. Company-wide, we now have 750,000 households that subscribe to at least two or three Cox products."

Total revenues for the three months ended March 31, 2001 were $947.9 million, a 12 percent increase over revenues of $846.3 million for the three months ended March 31, 2000.

Residential data and residential telephony revenues for the first quarter of 2001 doubled to $56.6 million and $40.1 million, respectively, from $28.1 million and $19.9 million, respectively, in 2000 due to customer growth. A spokesperson for Cox Communications said the cable provider connected 587,180 subscribers at the end of March.

Commercial revenues for the first quarter of 2001 increased to $30.6 million from $18.5 million for the comparable period in 2000 due to growth in both high-speed data and telephony customers. Advertising revenues decreased 6 percent to $69.7 million due to a general economic softness affecting local and national advertising spending.

Cox on trial
In related news this week, EarthLink and Cox agreed to conduct a technical trial of EarthLink's Internet services over Cox's broadband cable network. The six-month trial will allow both companies to test the service with the option of negotiating a definitive open access agreement.

During the field tests, scheduled to begin in the third quarter, EarthLink and Cox will work together to develop and roll out Internet service over Cox's cable network in the company's El Dorado, Ark., cable system. Both EarthLink and Cox are based in Atlanta.

"We see cable as an important component of EarthLink's overall broadband strategy, so joining forces with Cox on this trial was an easy decision," said Mike Lunsford, EarthLink's executive vice president of broadband services. "This trial demonstrates the willingness of Cox to work with Internet partners to promote consumer choice and foster the development of broadband services. We are excited to be the first unaffiliated ISP to work with Cox and look forward to establishing a long and mutually beneficial relationship."

The agreement marks the third such deal EarthLink has reached with one of the five largest U.S. cable operators in the last six months. In November, EarthLink reached a definitive agreement with Time Warner, and in March, it agreed to Philadelphia-area trials with Comcast. In addition, EarthLink has been working with Charter Communications to deliver broadband service since 1997.

"We look forward to working with EarthLink as we initiate our first multiple ISP trial," said Dallas Clement, senior vice president of strategy and development for Cox Communications. "We are eager to explore the technical feasibility of offering more than one ISP on our network in anticipation of forming a relationship that allows both of us to realize the significant business opportunities that exist in the high speed Internet access market."

With more than 288,000 broadband subscribers, EarthLink is one of the leading broadband Internet service providers. EarthLink DSL is currently available in more than 70 major metropolitan markets through more than 2,650 central offices. The company also offers its Internet services through cable, satellite, Ricochet and fixed wireless technologies.

Cox Communications, a Fortune 500 company, serves approximately 6.2 million customers nationwide, making it the nation's fifth largest cable television company. A full-service provider of telecommunications products, Cox offers an array of services, including Cox Cable; local and long distance telephone services under the Cox Digital Telephone brand; high-speed Internet access under the brands Cox@Home, Road Runner and Cox Express; advanced digital video programming services under the Cox Digital Cable brand; and commercial voice and data services via Cox Business Services.

Cox is an investor in telecommunications companies including Sprint PCS and Excite@Home, as well as programming networks including Discovery Channel, The Learning Channel, Outdoor Life and Speedvision.

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