Mediacom spending $1B to expand 1-Gig network across footprint, add more fiber, WiFi

By Jim O'Neill on Mar 14 2016 at 8:00 AM
Mediacom spending $1B to expand 1-Gig network across footprint, add more fiber, Wi-Fi

Want a glimpse of the future? How about this: Tier 2 U.S. cable provider Mediacom is planning to spend $1 billion over the next three years to upgrade and expand its national broadband network, focusing on a wide-scale deployment of a 1 Gbps broadband service to virtually all of the 3 million homes and businesses within the 1,500 communities located in Mediacom’s Midwest and Southeast footprint.

“Project Gigabit,” said founder and CEO Rocco Commisso, will give Mediacom customers “access to one of the fastest broadband networks in the world.”

The service will be built upon the residential gigabit product launches completed by Mediacom in 2015 and the Gigabit+ Fiber Solutions offered to businesses; the first wave of Project Gigabit communities are expected to come online as early as the fourth quarter of 2016.

And, unlike some other gigabit rollouts, Mediacom said it intends to make gigabit speeds available to essentially all of the residences and businesses along its network – using its own money, not federal subsidies.

The move is a good one for the company, the 8th-largest cable provider in the United States with about 855,000 pay-TV and 1.085 broadband subscribers in 22 states.

Mediacom, like most providers, has seen some cord cutting in its business, it lost 35,000 subs this year and about 338,000 over the past five years. It’s broadband business, on the other hand, added 72,000 new subs in 2016 and more than 294,000 in the past five years.

Mediacom already has an all-digital video network, and has launched a variety of advanced broadband services; it’s also deployed nearly 600,000 strand miles of fiber to date.

The cableco isn’t stopping at a gigabit network, it’s also planning to grow its deep-fiber residential video, Internet and phone network in order to pass at least an additional 50,000 homes, and will also “community Wi-Fi access points” throughout high-traffic commercial and public areas across Mediacom’s national footprint.

Both should help satisfy consumers who want better access to more entertainment inside – and outside – their homes, especially on mobile devices.

Mediacom also plans to expand its high-capacity network inside downtown areas and commercial districts in order to create more “lit buildings” within its footprint and bring tens of thousands of new business customers on-net with immediate access to fiber-based communications services.

“We decided to accelerate our capital spending over the next 3 years because our company wants to be the engine that drives economic growth and development for businesses and residents in the communities we serve,” said Commisso.

Mediacom has been aggressive in trying to step into the next-gen entertainment delivery. It’s among only a handful of other operators that have begun to offer Hulu directly to its customers set-top boxes and last year joined a trio of other Tier 2 operators in offering Netflix through its TiVO boxes.

Offering a traditional pay-TV product for operators – especially those not in the same weight classes as Comcast, AT&T/DirecTV and (potentially) Charter/Time Warner Cable – is getting more difficult.

Content costs continue to rise and content owners increasingly are looking to make up margin shrinkage in the deals they have to accept from the Tier 1 players, especially as that space consolidates, giving \big operators more leverage in carriage negotiations.

For Tier 2 – and even more so for Tier 3 – operators making hay with ultra-high-speed broadband offerings, revenue sharing via OTT deals and giving customers more content options, is a future revenue model that can’t be ignored.

And it looks like Mediacom is going after it in spades.

Stay tuned.

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