by Justin Vick
Amid talk of Time Warner Cable increasing its rates next month, Lake Norman’s MI-Connection is considering its first hike since July 2009.
Alan Hall, general manager for MI-Connection, said his board of directors have discussed how they would respond to Time Warner Cable’s monthly rates increasing from $58.95 to $63.99. MI-Connection’s comparable product costs $52.49, he said.
“Our discussion was centered around do we want to either make a lot of noise that we’re $11 or more cheaper than our main competition or do we want to raise rates but still remain priced lower,” Hall said.
The presence of satellite providers, Direct TV and DISH Network, is complicating that decision. Hall will provide his board with up-to-date price comparisons of its competitors at an upcoming meeting.
If approved, a rate increase could occur as early as February.
MI-Connection has previously considered rate increases. In fact, an audit of MI-Connection’s 2010 fiscal year, ending June 2010, states “rates for services are likely to increase.”
“When we did our budget, we anticipated doing a rate increase, but the board decided our primary goal was to grow customers and not raise rates at that time,” Hall said. The company’s mission, he said, is to not only to provide a service of value, but also to become profitable.
MI-Connection reported a $15 million net loss for the 2010 fiscal year, ending June 30. The company reported an $8.9 million loss in 2009.
Management attributed its $6.1 million slide from last year to increases in interest expenses related to increased debt, depreciation for system upgrades and construction and programming costs.
MI-Connection sees opportunities for growth – even during an economic downturn.
Discussion items in the company’s audit state that as subscribers guard their extra income, they should rely more on cable television for their recreation and social needs.
MI-Connection has also tried to appeal to residents by invoking community pride in making the company profitable. The more people subscribe, the less the company has to request from the general funds of Davidson and Mooresville. The towns gave $6.4 million to the company for 2010-11.
Also, MI-Connection unveiled a new marketing plan in August called “Connect My (Blank)” that would enable new subscribers to earn up to $75 for an organization of their choice.
Hall introduced the campaign to elected officials in Cornelius, Davidson and Mooresville in hopes they would help increase buy-in among constituents.
Hall gave them a round number – 5,000, which is how many residents are needed to subscribe to “triple play” packages, consisting of cable television, Internet and phone service, to generate $2.5 million.
While the company has not yet seen a significant influx from the “Connect My (Blank)” campaign, Hall said eight community groups have committed to being part of the campaign.
MI-Connection can lessen the burden on new residential customers by recruiting businesses to adopt its services. In the first quarter of the fiscal year, consisting of July, August and September, MI-Connection signed up 52 commercial revenue-generating units, Hall said, the equivalent of 162 residential customers.
“These are people who need a more robust network and lots of phone lines,” he said.