Cogeco executives said during their third-quarter earnings report that 65% of broadband competition faced by recently expanded U.S. asset Atlantic Broadband is DSL.
The favorable competitive landscape faced by the ninth biggest U.S. cable operator is, of course, a nice hedge for Canadian parent Cogeco. 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%.
Cogeco execs also said their $1.4 billion acquisition of 236,000 MetroCast residential and business passings in New Hampshire, Maine, Pennsylvania, Maryland and Virginia is slated to close in January. The further expansion of Atlantic Broadband’s footprint came two years after the $200 million purchase of MetroCast’s Connecticut systems.
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During their Q3 presentation, Congeco executives continued to tout the operational symmetry of the additional MetroCast customers, noting the growth they’ve managed to kickstart in the earlier Connecticut purchase.
Customers in that system grew 11% from Q3 2016 to Q3 2017, they said, with bundled subscribers up 13%.
With the second MetroCast purchase, Atlantic Broadband now passes 850,000 businesses in secondary markets, and it has around 450,000 residential and business customers. It’s now producing $715 million in annual revenue and has 1,250 employees.
Cogeco’s “U.S. cable business continues to see healthy RGU growth of 3% and ARPU growth of 4%, which we believe is sustainable given its broadband market position and pricing power,” said ScotiaBank analyst Jeff Fan in a note to investors this morning. “Furthermore, because Atlantic Broadband’s footprint is in secondary markets, it is seeing less impact from vMVPD competition that many MSOs are seeing in larger markets."