Cequel Communications, which operates through subsidiary Suddenlink, provides cable TV, high-speed Internet access, and phone services to about 1.4 million business and residential customers. The company primarily serves rural markets in Arkansas, Louisiana, North Carolina, Oklahoma, Texas, and West Virginia, among other states. It also offers home security system installation and monitoring services. Suddenlink's services for business clients include high-capacity networking and Web hosting. The company's CoStreet division provides fiber optic networking and backhaul services to other carriers. In late 2012 a group of investors and company executives bought Cequel for $6.6 billion, including $4.1 billion in debt.
As a small-market cable provider, Suddenlink's customers aren't big ticket buyers. The majority of its customers, 1.2 million, are residential, basic cable subscribers that receive less than 30 channels. About 835,000 customers subscribe to digital cable and receive up to 300 channels. More than 1 million residential customers also rely on Suddenlink for Internet service, while about 470,000 others have traditional telephone lines. The remainder of Suddenlink's business is made up of equipment rental, advertising sales, and other services.
While most of its customers are basic cable subscribers, growth for that segment is relatively flat year-over-year while the digital video, Internet, and phone segments are growing quickly, turning in double-digit growth in each of the past two years. Its average monthly bill for a basic cable customer increased to $138.61 in 2012, up 10% from $126.35 in 2011.
Sales and Marketing
Competition is fierce for cable and satellite TV customers, with traditional phone providers such as
taking market share away from traditional cable TV providers. Suddenlink uses multiple sales channels to reach current and potential customers, including inbound customer care centers, outbound telemarketing, retail locations, field technician sales and door-to-door sales. It also uses TV, radio, newspaper, direct mail and outdoor advertising. Of course, as a cable provider, TV ads on its own cable systems are available free of charge.
More than half of Suddenlink's $2 billion in sales in 2012 came from its core cable video segment; another quarter was generated by broadband Internet accounts. Total revenue was up 8% for the year, continuing a history of revenue growth, while operating expenses rose nearly the same amount. The company lost $43 million in 2012 due to acquisition expenses and investments in the expansion and upgrade of its cable systems. The company has yet to turn a profit.
Mergers and Acquisitions
As the seventh-largest cable provider in the US, Suddenlink continues to expand its products and services in key regions while divesting operations in non-core locations. In 2012 it sold off basic cable operations in Indiana and Illinois (serving about 2,800 customers) for $4.8 million to an undisclosed buyer.
In 2011 it added 80,000 customers with the 2011 purchase of NPG Cable, a subsidiary of the
News-Press & Gazette Company
. NPG Cable's customers were located in St. Joseph, Missouri; Mammoth Lakes, California; and several Arizona communities such as Flagstaff, Kingman Lake Havasu, and Sedona. Also in 2011 it added online streaming video service called Suddenlink2GO and doubled its video-on-demand capacity.
The previous year, in 2010, Suddenlink sold cable operations in Salem, West Virginia, and Oakland, Maryland, to
for $4.5 million. At the same time it expanded to Mississippi when it bought the operations of Windjammer Communications, a rival small town cable provider, for $20 million.