Atlantic Broadband said it is now the 12th largest cable operator in the United States thanks to its just-completed acquisition of MetroCast from Harron Communications for $200 million. Announced in June, the closing of the deal solidifies Atlantic Broadband's owner, Canada's Cogeco Cable, as a notable player in the U.S. cable market.
"Nearly three years after our initial entry into the U.S. market, we are pleased to be continuing our geographic expansion into key growth markets," said Louis Audet, president and CEO of Cogeco, which entered the U.S. market with its 2012 purchase of Atlantic Broadband's 251,000 subscribers in Western Pennsylvania, Southern Florida, Maryland, Delaware and South Carolina. "This transaction enhances our growth profile through the planned launch of new residential services such as TiVo and Metro Ethernet for businesses."
MetroCast's Connecticut network, which passes 70,000 homes and businesses across nine communities in Eastern Connecticut, services 23,000 TV, 22,000 Internet and 8,000 phone customers. With those additions, Atlantic Broadband now counts around 246,000 total customers.
In its most recent financial report for the period ending May 31, Cogeco said its U.S. cable operations lost 938 TV customers during its fiscal third quarter, a slight improvement over the 1,599 it lost in the same period last year. The company blamed the declines on the "competitive offers in the industry, partly offset by the growth of TiVo's digital advanced television services launched during the first quarter of fiscal 2014." The company said it added 4,407 Internet subscribers in its most recent quarter, up from 3,990 in the year-ago period, "mainly due to the launch of TiVo's services, additional marketing initiatives which focused on bundle package offerings, thus increasing overall demand for the HSI [high speed Internet] residential services as well as increased commercial HSI customers." The company said fully 59 percent of its customers subscribed to two or more of its services during the period; 21 percent subscribed to all three of its services (TV, Internet and telephony).
As for the financials of the company's U.S. cable business, Cogeco reported that its U.S. cable revenues rose almost 20 percent year-over-year to almost $20 million in its fiscal third quarter due to what the company said was "favorable foreign exchange rates compared to the same period last year, PSU growth as well as rate increases implemented during the first quarter of fiscal 2015."
Interestingly, Atlantic Broadband is one of the more progressive cable operators in the country in terms of embracing OTT rivals. The company announced in 2014 it would integrate Netflix into its offering, giving customers up to three months of free Netflix if their sign up for one of the MSO's TiVo bundles. And earlier this year, the company said it would also integrate Hulu into its services.
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