Cable phone alive and well, but endangered, Cablevision's Varello says

CHICAGO - The cable phone, generally an IP-based voice application on a cable high-speed data service, is alive and still kicking telcos' butts--as Joe Varello, vice president of product management for Cablevision Systems' (NYSE: CVC) put it. But it is endangered.

The phone business, once so hot for cable, is tapering off. It's getting harder to grab remaining phone subscribers from the telcos and the cable industry itself is starting to feel the presence of the wireless cord-cutters.

"The majority of the problem is hitting the telcos," said Philip Nutsugah, vice president of voice product development and management for Cox Communications.

Nevertheless Nutsugah, and fellow panelists in the session "Talk About a Dream: Directions in Cable Voice" showed graphs and other statistics indicating that cable's phone growth will plateau in the next several years.

That's causing operators to revisit the way they market phone services and how they introduce new features. Cox is "in the process now of thinking through the business model" Nutsugah said while Cablevision is following the path to "maintain the best value proposition."

Comcast (Nasdaq: CMCSA), meanwhile, the third member of the panel, is taking a gentle, gradual approach to introducing new features that will keep subscribers on the service and bring new ones in.

"For us it's a natural evolution," said Catherine Avgiris, senior vice president and general manager of communications and data services for Comcast Cable Communications. "We take customers on a journey (and) to keep them engaged we have to take them through it slowly."

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