Average Revenue Per User (ARPU) Comparisons

It is interesting to note that ARPU for cable, Satellite and Telco service providers have so much of variations. Comcast and Cablevision are the cable operators offer triple pay service bundles so does Verizon, a telco. DirectTV offers only video services via satellite. DirectTV seem to be doing well without having to offer bundled services but surely are at a disadvantage to improve ARPU (unless they look at acquisitions/partnerships or advancement in technology so that they too can offer triple play services). However, if you observe the APRU of Comcast, Cablevision and Verizon, Cablevision appears to be making most in terms of ARPU. This could be the reason why Verizon have been targeting the Cablevision territory as they offer IPTV and HSI services - 25% of the homes Cablevision serves are exposed to Verizon’s FiOS service compared with about 4% for Comcast and Time Warner Cable Inc., according to a Citigroup Research estimate.

Also it also appears that Comcast is pushing to increase their High Speed Internet (HSI) penetration - 27% of "available homes’ and Comcast thinks it can get that number up as eventually 80% of homes in the U.S. will have broadband, up from the roughly half of homes that do now. Of the 450,000 HSI additions, only 25% of Q3 net adds came from dialup, while 61% came from DSL (telco) and 14% came from other cable companies. I am sure the telco are making note of the 61% number and their motivation to provide higher bandwidth internet services.

Other upside revenue potential from Comcast is their phone services - only 9.4% of the 40.3 million homes offered phone service have subscribed, leaving considerable room for growth. They are further targeting the Small and Mid-sized businesses - Comcast has hired roughly 750 sales people and trained about 1,200 technicians for its nascent plan to offer services to small and midsize businesses. Both these targets are aimed at the strongholds of telcos. As the Pali Research report puts it ‘the cable industry is now looking at an all-out war’ (with the telcos).