By the end of this year, 30% of Charter Communications' customers should be digital cable customers, marking a milestone in cable history. The ramp-up to 30% digital penetration marks the shortest time to that level of any company in the cable industry. As Merrill Lynch points out in a recent note, ?we view this as a remarkable achievement.?

Charter's fast growth rate to date in digital and other new services may prove difficult for the company to maintain. Merrill Lynch analyst Jessica Reif Cohen pared her estimates for digital and high-speed-data subscribers at Charter and Cox Communications, saying that the pace of new service rollouts is not accelerating as fast as she had previously estimated. The new estimates for the two companies are more in line with management's expectations, Reif Cohen wrote. She had raised her estimates following the extremely strong showings for the first quarter.

Reif Cohen lowered her year-end expectations for Charter's digital subscribers to 2 million versus her prior estimate of 2.2 million. She lowered her estimate for Charter's data subscribers to 600,000 from 650,000. For Cox, Reif Cohen lowered her estimate for digital subscribers to 1.32 million from 1.36 million (she notes her new estimates are more in line with Cox's first-quarter numbers) and lowered her estimate for Cox's data subscribers for 2001 to 936,000 from 962,000.

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