After reporting Friday that Cablevision gained 5,000 total customers in the second quarter, CEO Jim Dolan unloaded on top rival Verizon during a conference call with analysts.
Dolan: Our first direct competition with them was in the landline phone business. From a standing start we took more than 2 million of their residential phone customers and Cablevision became the dominant phone provider in our market.
Verizon has invested billions of dollars in FiOS in the Tri-State area. Today Cablevision serves more than 3.1 million customers, down from 3.34 million customers at our peak in 2008. This is despite Verizon’s heavily funded overbuild and deeply discounted pricing, as well as the economy and other competitive forces. The impact of FiOS on Cablevision has been minimal. To the extent that we have lost customers to FiOS we believe that they are usually promotional shoppers in search of the lowest priced services.
FiOS has almost certainly performed better against the satellite companies than it has against Cablevision. We believe that Verizon FiOS is an unprofitable business today and we doubt that they will ever be profitable. Our strategic plans and investment in the past 3 years have helped to transform Cablevision. Our focus on price discipline has allowed us to grow revenue per customer. Our voluntary churn is down, and we have retained our highest value customers. In addition, today Cablevision operates the nation’s most robust Wi-Fi network, while Verizon has no public Wi-Fi.
Cablevision has changed its culture. We no longer think like a monopoly. And instead we are strategic, effective and competitive. Our approach to connectivity is gaining traction. This is reflected by our growth in customer relationships this quarter.
The Verizon FiOS effect, if there ever was one, in our opinion, is over. Our business is healthy, and I’m confident that it will get even stronger as we move forward.
Update: When asked for comment on Dolan’s remarks, Verizon spokesman John Bonomo sent The Donohue Report a statement Friday afternoon. “We’ll let our FiOS services speak for themselves – better Internet speeds, better connectivity, better TV quality, tops in customer service rankings, and better overall value for our customers. That speaks volumes,” Bonomo said.