Cogeco’s U.S. broadband business Breezeline returned to subscriber growth in the company’s fiscal second quarter after dipping into negative territory the previous period. The increase helped propel the division to 31% year on year revenue growth.
Breezeline, formerly known as Atlantic Broadband, is the eighth largest cable company in the country. Last year, it acquired WideOpenWest’s (WOW!) Cleveland and Columbus, Ohio markets for $1.13 billion in a deal that closed in September. It subsequently announced the rollout of its new Breezeline branding in January, but said the Ohio markets would continue to operate under the WOW! name until integration work was completed.
During the company’s fiscal Q2 earnings call (for the three months ending February 28, 2022), CEO Philippe Jette said migration of the customer management systems for the Ohio markets is now expected to be completed early in the company’s fiscal Q4.
“That's earlier than originally planned,” he stated. “The integration of the customer management system is a key initiative and key milestone to launch Breezeline’s branding and service offering. Our next steps will then be to further interconnect the Ohio network with the existing Breezeline network and prepare for the launch of our IPTV platform in this market.”
Jette also provided an update on Breezeline’s previously announced plan to expand its fiber footprint to 70,000 new locations across New Hampshire and West Virginia. He said two new communities have already been connected, with another seven set to follow “in the coming months.” Franchise agreements with “many” additional communities are expected to be signed in the current fiscal year, but delays in their signing and permitting will likely push completion of those projects into fiscal 2023.
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Cogeco posted consolidated revenue of CAD $728.5 million (approximately $577.6 million) which was up 14.8% year on year. Profit rose 8.5% to CAD $119.9 million ($95.1 million).
Breezeline revenue jumped 31% to CAD $366.2 million (around $290 million), while revenue for Cogeco’s Canadian broadband business Cogeco Connexion rose 2.1% to CAD $362.3 million (around $287 million). Executives attributed the Breezeline growth primarily to the Ohio acquisition, but also a larger customer base, higher value product mix and annual rate increases for certain services.
Net additions for the U.S. unit came in at 2,830, improving upon a loss of 77 customers in FQ1 but coming in well below the 6,383 it added in FQ2 2021. It ended the quarter with 719,608 internet customers. As of the end of the quarter, 63% of Breezeline customers were on a single play plan, with only 37% taking a double or triple play bundle.
Cogeco Connexion added 2,739 internet customers to end the quarter with 921,043.