DAVIDSON – MI-Connection, the Davidson and Mooresville town-owned telecommunications company, reported one of its highest recorded earnings in the quarter ending Dec. 31.
MI-Connection CEO David Auger told Davidson commissioners Feb. 25 that revenue is up 10.4 percent — jumping from $4,121,000 in the second quarter of the 2013 fiscal year to $4,551,000 this year.
The Earnings Before Interest, Depreciation and Amortization is up 24.9 percent with revenue-generating units (defined as single subscriptions to cable TV, Internet or phone service) increased by 5 percent.
Auger equates the rise in revenue to more customers, but also because of a recent rate increase and the company no longer offering promotional discounts.
He said the average revenue per customer went from $91.25 in 2013 to $96.55 in 2014. That customer base comes from Cornelius, Davidson and Mooresville.
Auger said the increased revenue was also countered with additional expenses, rising $253,217 from second quarter in 2013. Those expenses come from increased rates of video programming, telephone switching, Internet transport and bad debt.
Facility-based expenses also went up by $87,000, which he said came from a $30,000 unbudgeted billing expense and timing performance bonuses.
Marketing expenses also increased, but Auger said they have six months to make it up and hopes it was simply a timing blip.
MI-Connection is working to help contribute to the $7.1 million annual debt, which is predominantly paid for by Mooresville and Davidson. In 2012, the company contributed $277,000 to the debt, but has steadily increased and is on track to pay $1.6 million this year.
Auger said he hopes to raise that to more than $2 million next fiscal year. The towns incur the remaining balance. When asked, Auger said they have at least 20 more years of the debt unless there is a refinancing.
Auger outlined potential goals for the company, including expanding its customers base, selling more products to existing and new customers, increasing monthly revenue per existing product units, becoming the market leader for commercial services and re-engineering operations to become more efficient.
MI-Connection offers a “triple play” of services including cable TV, high-speed Internet and phone for both homes and businesses. The company recently added Fox 2 Sports to their programming.
“We’ve got a segment that’s not growing like I’d like it to grow, but it’s being offset by the others and that’s the phone business,” Auger said.
MI-Connection has nearly 16,000 customers in 37,000 households. Its commercial revenue has spiked from $22,783 in 2012 to more than $87,000 in 2014.
MI-Connection is also changing the way it does business to cut costs and transition to more in-house efforts.
By July 1, MI-Connection will handle all customer service calls in Mooresville, compared to 55.5 percent answered currently. To do so, the company is hiring several customer service representatives.
When prompted by commissioners, Auger said the potential Comcast and Time Warner Cable merger and the potential for Google Fiber to come to the area shouldn’t affect MI-Connection, but the company has no way of knowing.
The firm is also changing contracted companies to handle technical support and billing. Negotiations are in effect to transition by July 1. BVU, which oversees all of this currently, will only continue handling the dial tone for phone service per an agreement, which lasts until Feb. 28, 2015.