Nynex CableComms to stick to discount pricing

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The Independent Online

Nynex CableComms, the country's second-largest cable operator, will stick to its discount pricing for telephone services, its chief executive, Eugene Connell, said yesterday. Following cuts in tariffs introduced by BT in the summer, Nynex has offered a 25 per cent discount to BT's published prices for residential domestic and international calls since last month.

It had already been offering limited discounts prior to the cuts in October, as part of a strategy to increase penetration.

Mr Connell made the announcement as he unveiled results for the nine months to 30 September. Revenues from combined cable television and telephony services doubled to pounds 57m in the nine months to 30 September. Losses continued to mount, however, as the company built out its network. From pounds 51m in the comparable period last year, operating losses rose to just over pounds 78m.

The company has franchises covering 2.69 million homes, in the North of England, London and on the south coast, accounting for about 17 per cent of UK franchised homes.

Average revenues per telephone customer have dropped as a result of aggressive pricing, but revenues overall from telephony have risen sharply. Moreover, revenues per cable customer were up 8 per cent like for like. "This is a reflection of our strategy to increase penetration by pricing competitively," Mr Connell said. Nynex has also cut interconnection charges through increased use of its own switching equipment and has cut administrative and sales costs by 21 per cent.

By the end of the period, Nynex's network had passed a total of more than 1 million homes, up from 673,000 at the end of 1994. It added 18,000 customers in the third quarter, for a total of 42,000 so far in 1995. Shares rose by 1p to 130p, still below the company's issue price of 137p in May.