Atlantic Broadband CRO Isenberg: ‘MetroCast is a spectacular operational fit’

Atlantic Broadband President and Chief Revenue Officer David Isenberg.

Atlantic Broadband’s $1.4 billion purchase of Northeast cable operator MetroCast was a “spectacular operational fit” that will deliver “about as low risk integration as you could possibly have.” 

So said Atlantic Broadband President and Chief Revenue Officer David Isenberg, who talked to FierceCable via phone from Atlantic Broadband’s Quincy, Massachusetts, headquarters on Thursday, about 10 days after his company and its Canadian parent, Cogeco Communications, announced the acquisition of 236,000 MetroCast residential and business passings in New Hampshire, Maine, Pennsylvania, Maryland and Virginia. 

Of course, Atlantic Broadband’s $200 million purchase of MetroCast’s Connecticut systems two years ago gave the operator a good idea of what it was getting into. Part of Atlantic Broadband’s confidence, Isenberg said, “comes from the the fact that we’ve done this before. But also it’s because our back-office operations match up so well. We both use CSG International’s billing platform, for example, and we both use Cisco’s DOCSIS platform. We have the same telephony vendor and the same VOD structure.”

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RELATED: Atlantic Broadband buys the rest of MetroCast for $1.4B

The compatibility, Isenberg said, will allow Atlantic Broadband to transition its newly acquired MetroCast systems to its own pricing and branding within as little as two months after the deal closes. 

When the acquisition does close, Atlantic Broadband will solidify its position as a “midsized” U.S. cable operator, now ranking firmly on a list of top 10 operators, servicing 11 states that span from Maine to Florida. It will pass more than 800,000 homes and service more than 400,000 customers, while employing close to 1,200 workers. Combined annual revenue is expected to surpass $700 million. 

The MetroCast deal, Isenberg explained, offers parent Cogeco a means of growth. One-quarter of the Montreal-based operator’s footprint has access to fiber-to-the-home, while another 25% has access to “fiber-to-the-node” services. Amid the competitive landscape, Cogeco has been growing annual revenue at only around 3%.

Atlantic Broadband has been growing revenue at about a 6% clip, Isenberg said.

“About 70% of our footprint is still DSL,” he said. “For MetroCast, about 90% of their footprint is DSL services.”

For its newly acquired customers, Isenberg said Atlantic Broadband will follow the same integration path it used to convert MetroCast’s Connecticut customers two years ago: increase broadband speeds and deliver upgraded, next-generation TiVo-powered TV experiences, all with the aim of upping the level of double- and triple-play customers. 

“Their flagship speed when we acquired the Connecticut system in 2014 was 25 Mbps, with a top speed of 75 Mbps,” Isenberg said. “Now our most popular speed is 100 Mbps with a top speed of 1 gig. From a TV perspective, they don’t have an advanced DVR platform like TiVo or X1. Their platform is based on a Rovi guide, which is a serviceable but basic guide, and does not deliver the advanced capabilities today’s customer is looking for.”

The competitive outlook for pay-TV services in the Metrocast footprint is big, Isenberg explained. 

Around 82% of homes in that footprint subscribe to a traditional pay-TV service, but MetroCast only delivers video services to about 32% of available homes. Only around 5% of the footprint has access to Verizon FTTH service, meaning much of the market is using satellite TV services that are highly vulnerable to Atlantic Broadband’s bundled offerings of high-speed internet and advanced TiVo-based video service.

“We’re focused on multiproduct triple- and double-play sales,” Isenberg said. “Our aim is to get the majority of our user base into triple-play bundles.” He added that about 45% of the MetroCast customer base is multiplay.

“For Atlantic Broadband, that number is 55%,” he added. “So there’s a full 10 percentage points of difference between the two of us. … We believe that having a strong video product is an important growth driver.”

When it was suggested that Atlantic Broadband’s video strategy contrasts sharply with the more nihilistic perspectives of other midsized cable operators, notably Cable One, Isenberg noted, “The name of the game on every sales interaction is, ‘how do I take an internet sale that might be a $50 transaction, and turn that into a $150 sale by packaging other services?’ We’re able to do that more of the time than Cable One.” 

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