Acquisition boosts Knology Q1 sub count, revenue intake

[cablewithaview]

A recent acquisition gave Knology Inc. a boost in the first quarter, as the Georgia-based competitive cable operator saw an influx of new subscribers and revenue.

But it wasn’t all sunshine, as Knology did slip into net loss territory as well during the quarter.

Knology did indeed see much stronger customer gains in the quarter, but more than likely that was driven by an influx of customers from its $75 million acquisition of Dothan, Ala.-based Graceba Total Communications, which closed on Jan. 4. The cabler did not provide Graceba subscriber numbers for comparison.

Knology added 6,407 video customers – a substantial improvement from the 151 subscribers lost in the fourth quarter and ahead of the 2,258 customers added in the prior first quarter.

Data also saw strong growth, again likely driven by the Graceba acquisition. The 11,567 high-speed data customer additions were up from 3,282 added in the fourth quarter and 4,528 added in the first quarter last year.

In voice, the competitive cabler added 11,246 customers, with 11,269 net on-net customers offsetting the 23 customers lost in off-net connections. That compares to just 394 total voice additions in the fourth quarter and 2,474 added in the first quarter 2007.

Average monthly revenue per user came in at $50.36 up from $49.17 in the fourth quarter and $49.16 for the first quarter of 2007. Churn, meanwhile, improved to 2.4% compared to 2.5% in the fourth quarter and the prior first quarter.

The customer gains and rising ARPU also boosted total revenue, which came in at $101.3 million, well ahead of the $94.8 million posted in the fourth quarter and $69 million in the first quarter last year. That growth was driven by gains in individual voice, video and data revenue segments, with the strongest growth seen in video.

Video revenue totaled $42.4 million, up from $39.2 million in the fourth quarter and $30.7 million in the first quarter 2007 – an increase was driven by increasing digital penetration of 48.9% compared to 36.3% in the first quarter a year ago as well as HD and digital video recorder box sales, which rose 46% year-over-year.

Data revenue rose more modestly, totaling $22.6 million compared to $21.2 million in the fourth quarter and $16.3 million in the first quarter 2007. And voice revenue improved to $34.7 million, up from $33 million in the fourth quarter and $21.1 million in the first quarter a year ago.

Despite these gains, Knology did trend once again into the red overall, posting a net loss of $3.2 million. But that was an improvement from the nearly $6 million net loss in the fourth quarter and the $6.7 million net loss in the prior first quarter.


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