That being said, Knology does not want to get in the price wars, Johnson said. The company is counting on the strength of its customer service and focus on secondary and tertiary markets to bolster its competitive positioning. In addition, Knology is entering 2008 with two completed acquisitions to reinforce its market presence. In a $255 million deal that closed last April, Knology acquired broadband services provider PrairieWave, which provides telephone, cable television, Internet, phone directory and cable advertising services for residential and business customers in South Dakota, Minnesota and Iowa. The latest, on Jan. 4 of this year, brought in a $75 million acquisition of Graceba Total Communications, a digital cable TV, telephone and Internet provider in Dolthan, Alabama.

Johnson said the company if focused on maintaining a balance between organic growth and its acquisitions. Knology will use the synergies from both of the PrairieWave and Graceba acquisitions to continue to promote its bundles and penetrate its target markets. “When we do acquisitions, we leave the synergies as icing on the cake, so to speak,” Johnson said.

Brett McCants, Knology’s vice president of operations, said that more aggressive competition is not an eminent threat. Rather, the existing competition is only getting broader.

“All our cable competitors have now launched a phone product in all our markets except for the rural ILEC,” McCants said. “We are seeing the $99 offer in virtually every one of our markets. Some offer little lower than that when you talk about Charter or MediaCom. But we continue to be competitive in those markets, and we have not seen any great inroads with their telephone product in any of our markets.”

McCants added that the company has also not seen any advancements with AT&T’s U-Verse in its markets, and in Pinellas County, Florida, a larger market, AT&T only provides a limited amount of competition. Johnson pointed out that cable competitor Comcast is also seeing roll off from its triple play packages next year. “It is going to be an interesting dynamic,” he said.