Hi, Twick. The following is the list of clients that I copied from CSGS's 10-K:
CLIENTS
CableVision Systems Corporation (#7)*Media One Group* (ATT #1)
Century Communications Corporation(#9) Primestar, Inc.
*Comcast Corporation* (#3) *TCI* (ATT #1)
Echostar Communications Corporation Telewest
Falcon Cable TV Time Warner (#2)
If you would like to double check, please go to CSGS's 10-K report for the list of clients and go to teleport.com to verify the top 10 U.S. MSOs.
Also, I agree with you that it is generally good business practice to secure more than one business solution and vendor. However, in the "low tech" biz of processing statements, I don't see cable operators allocate statements to every single competitor they find as it greatly diminishes their volume discount they might enjoy.
To address the second part of your statement, I think it's common knowledge that ATT and company has its eyes set on providing one stop solution (cable, telephony, data, etc.) for consumers. It would be absolutely nonsensical to assume otherwise given that they are paying $2,000 - 3,000 or more PER subscriber to acquire these cable assets.
As you probably know, given CSGS's market share in the cable billing, it's impossible that further growth can be achieved through an increase in the number of subscribers. Management has already stated that they're expecting an addition of only 750K subscribers for Q3, which is a paltry ~3% over Q2. Therefore, to maintain its historic growth rate of 30+%, the $/Subscriber must increase by a disproportionate %. Fortunately, the converging telecommunication trends have played right into the hands of CSGS as they now have the opportunity to earn an incremental source of revenue from processing statements for not only cable subscribers but for other areas as well.
Please don't get me wrong here. I'm certainly not saying that CSGS is certainly a lock for these new business opportunities. If it were, I don't think it'll be trading at a PE to Growth ratio of less than 0.75. However, given its long operating history in serving the cable operators w/ its focus strategy, I believe the company has a pretty good shot of gaining these biz opportunities w/ the MSOs. It makes a lot of business sense to have your cable and data statements bundled and processed under one house (because of the savings in postage, paper cost, etc.). I believe Rory Heiner said that Cox-@Home is currently doing this right now. However, I'm not sure this is happening in TCI and other areas covered by CSGS.
Twick, I just want to thank you for contributing to this thread. The thread's been dead for awhile probably because the stock is languishing. |
