Local broker Nessuah Zannex said today that it was more optimistic about cable company Matav-Cable Systems Media (Nasdaq: MATV), because several indicators underlying mid-term improvement were emerging.
Analyst Haim Israel said, “Although we are more optimistic on Matav’s future performance we are taking a conservative approach and maintaining our Neutral rating on the company with a positive bias, waiting for the merger between the cable TV companies, which should act as a catalyst for improved performance.”
Nessuah Zannex estimates that basic prices for cable TV services will increase by an additional 5% in the upcoming quarters, while subsidizing for digital set-top boxes will decline. The firm forecasts that Matav’s total average revenue per user will increase by 15% -20% in the mid term as a result of broadband Internet services, digital value added applications and tiering packages. As a result, year 2002 revenue is forecast to reach NIS 488.9 million and operating breakeven is expected by the first half of 2003.
However, Israel said the high speed Internet (ADSL) service offered by telecom operator Bezeq was making steady progress because the cable companies had not yet begun aggressive marketing for their own high speed services.
“We believe that this trend will continue until the merger of the cable TV companies, and consequently, we are lowering our projected broadband Internet customer base for Matav. We are modeling it to reach 24,000 subscribers by the end of 2002, versus our original estimate of 30,000. We believe that content costs will decrease by 25% only by the end of 2002, thereby allowing Matav to hit gross breakeven,” Israel stated.
Shares of Matav were down 1% at NIS 26.81 at web-posting.
Published by Globes [online] - www.globes.co.il - on 16 June, 2002