• by Wayne Friedman , May 31, 2006

Although there has been mounting excitement over digital platforms in recent months, Kagan Research says not to forget about cable system companies.

Cable stocks rose almost 20 percent in 2006--which outpaced the broader stock market pricing by three times, according to the Carmel, Calif.-based research company. In particular, cable TV system operators have witnessed major revenue and cash flow improvements.

Future cable growth will be generated by the industry's so-called triple play of video, voice, and data services. Ian Olgeirson, senior analyst for Kagan Research, said in future years, cable should gain share and ratchet up revenue from these products. Olgeirson also believes that other high-tech products such as video-on-demand and digital video recorders will further strengthen the bottom line.

Kagan estimates that overall, the U.S. cable business will grow to $14 billion in 2015. The company says that residential revenue per subscriber per month valuation will nearly double to $142.37 in 2015--as compared to $80.16 in 2005.

Kagan predicts that the cable industry will have 28.7 million telecommunications customers and 45 million cable modem subscribers in nine years' time.