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Cablevision Aims at 200K Cable Modem Customers by Year-End

Cablevision Systems Corp., New York City's largest cable operator, Wednesday revealed expectations that it will have more than 200,000 cable modem customers by year-end.

As of Sept. 30, the company had 139,700 subscribers. Cablevision said that by year-end it will have marketed its cable modem service to about 2 million homes.

The strong expectations are based on accelerating growth in digital cable customers, which saw a 50 percent increase from June 30th with 3,600 customers added weekly as compared to its second quarter weekly add rate of 1,800 customers. If the company hits the 200,000 subscriber mark it will represent a market penetration of 10 percent. In the third quarter last year, Cablevision had penetration of just 4 percent. That rose to 7.9 percent in this year's second quarter and currently rests at about 9.5 percent.

Still, Cablevision is lagging well behind Comcast, which has scored a broadband penetration rate of 17 percent, enabling it to increase operating cash flow faster than revenue.

But Cablevision is pushing hard. During the third quarter it began offering residential high-speed access in a number of New Jersey communities and portions of Westchester, Rockland and Orange Counties in New York. It also expanded its relationship with brick-and-mortar retailer The Wiz -- three more The Wiz stores began selling retail cable modems. There are now 18 The Wiz stores selling high-speed Internet service.

In the third quarter Cablevision also kicked in new telemarketing and direct-mail campaigns and opened the Optimum Online Web site, which will enable customers to order cable modems over the Internet and take delivery the next day.

"Our strategic focus on rolling out new digital products in the New York Metropolitan area is proceeding well, highlighted by a 50 percent increase in high-speed cable modem customers," said James L. Dolan, president and chief executive officer of Cablevision. "Later in the fourth quarter we will begin deploying SONY advanced digital set-top boxes. We anticipate rolling out several thousand advanced digital boxes in Long Island in December and January with a full-scale deployment scheduled to begin in the second quarter of 2001."