Cablevision Boosts Internet Fees for First Time in Decade
Stock Chart for Cablevision Systems Corp (CVC)
Cablevision Systems Corp. (CVC), the fifth- largest U.S. cable company, is increasing the price of its high- speed Internet service for all users by $5 a month in early 2013, the first increase for broadband in a decade.
The new pricing will result in an average increase of 3.2 percent on monthly bills for Internet customers who aren’t currently receiving promotional pricing, the company said in an e-mailed statement.
Cablevision, which has 3.25 million video customers and about 3 million Internet subscribers, didn’t increase rates for video, broadband, or phone service at all in 2012. The Bethpage, New York-based cable operator has spent $140 million improving its infrastructure and building the largest Wi-Fi network in the nation, with more than 50,000 indoor and outdoor hotspots that are free to Internet customers.
“This is a huge deal,” Amy Yong, an analyst at Macquarie Securities in New York, said in an interview. “Investors have been scared because of the expenses related to Hurricane Sandy. The fact they feel they can raise prices is fantastic.”
Cablevision Chief Financial Officer Gregg Seibert said last month Hurricane Sandy costs from damages and crediting customers for outages could be “significant.”
The hurricane may result in a decline of as much as 30 percent in adjusted operating cash flow in the fourth quarter from a year earlier, Tom Eagan, an analyst with Canaccord Genuity Corp., said in a note to clients last month. Eagan downgraded his rating on Cablevision to hold from buy on Nov. 27.
Phone and cable-TV prices will not be increased, according to the statement.
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