July 18, 2006 4:05 PM PDT

Cablevision signs up 1 millionth phone subscriber

Cablevision Systems said Tuesday that more than 1 million subscribers have signed up for its phone service.

About one-third of Cablevision's 3 million cable subscribers and half of its high-speed Internet customers have signed up for its phone service, which is based on Voice over Internet Protocol (VoIP), the company said. A year and a half ago, only about 270,000 subscribers were signed up for the company's voice service.

The company sells a "triple play" of services including phone, television and broadband access for $90 a month for the first year. The phone service includes unlimited local and long-distance calling within the United States, Canada and Puerto Rico. Subscribers also can get an unlimited international calling service for an additional $19.95.

After the first year, the phone service costs $34.95, about $10 more a month than a comparable offering from standalone VoIP provider Vonage.

Cablevision's strong growth in phone subscribers mirrors that of other cable operators, which also have reported record growth. Time Warner added 270,000 digital phone subscribers in the first quarter of 2006, its biggest gain ever. And Comcast, the largest cable provider in the U.S., added 211,000 new phone customers during the quarter, more than it signed up during all of 2005.

Increasingly, cable operators and phone companies are competing head-to-head as they each encroach on the other's business. Cable is adding phone service to its list of services, and phone companies are adding TV service.

Cablevision is already facing stiff competition from Verizon Communications, which also offers a package of triple-play services over its fiber-to-the-home network. As it lays fiber throughout Cablevision's territory, Verizon has been busy obtaining franchise agreements from towns, including many in Cablevision's own backyard of Long Island, N.Y. Verizon TV service is already available in Massapequa Park, Hempstead and Oyster Bay. The village of Lynbrook awarded a video franchise to the company on Monday.

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