Cablevision says Sandy outage hit half of its customers

Reuters News
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Posted: Nov 01, 2012 3:26 PM
Cablevision says Sandy outage hit half of its customers

By Nicola Leske

NEW YORK (Reuters) - Cable operator Cablevision Systems Corp said on Thursday about half of its 3.3 million customers in the New York, Connecticut and New Jersey area had lost power in the wake of superstorm Sandy, causing widespread disruptions to its service.

Cablevision said in a statement that 1.6 million of its customers were without power while 7,265 of the remaining 1.65 million customers who were not affected by power outages still had no access to Cablevision's service.

The company did not respond to questions about how the disruption would impact its financials.

A Barclays analyst, James Ratcliffe, said in a note that "power outages make a good proxy for storm impact on telcos and cable operators, since the same factors which cause power outages (flooding, downed lines) also cause telecom network failures."

Cablevision, which provide Internet, television and telephone services under the Optimum brand, said, "Following this unprecedented event, loss of electrical power continues to be the primary cause of widespread disruptions of Optimum service."

It said it had crews working to restore service and would continue to provide updates.

Last year, Cablevision said it took a hit of $16 million because of Hurricane Irene, a storm that affected the New York area in late August 2011.

"For CVC, with 1.6 million of their subscribers still without power, the impact is likely to be significantly greater than the $16 million cost of Irene; we estimate a $36 million impact," Barclays' Ratcliffe said in his note.

Cable operators Comcast Corp and Time Warner Cable were also having service problems.

Time Warner Cable said it has had no reports of significant damage to its network, but said it was hard to assess the situation because many of its customers have no power.

Cablevision had been due to report earnings November 1, but said on Wednesday it rescheduled the release to November 6.

The company, which mainly serves the New York area but also has operations in Montana and Wyoming, is controlled by the Dolan family. The company also owns a newspaper and TV networks.

Comcast Corp and Verizon Communications also said they had service problems in the wake of the storm, but they did not provide details as to how many customers were affected.

Of all the cable companies, Cablevision has the largest percentage of their subscribers in the area hard hit, Ratcliffe said.

Wireless service providers also struggled to maintain service after the storm due to floods and power outages.

Cablevision stock closed at $17.46 on Thursday, up 0.22 percent.

(Additional reporting by Sinead Carew; Editing by Leslie Adler)