Adelphia Integration Moving: Hobbs
Time Warner Cable Is Working Out the Back-Office Kinks
By Mike Farrell -- Multichannel News, 12/11/2005 7:00:00 PM
New York — New York— Time Warner Cable has about 200 employees working to integrate the Adelphia Communications Corp. systems it’s buying, and plans to continue introducing some of its newer programs, such as “Start Over” and digital simulcast, across its cable territories.
That update and other operational snapshots — such as hitting the 1 million mark in the rollout of voice-over-Internet protocol phone service — were offered by two of the second biggest U.S. cable company’s top executives during investor conferences here last week.
Chief operating officer Landel Hobbs offered some more details into the cable giant’s integration plans for Adelphia Communications Corp. at an investor conference Dec. 7. Two days earlier, at a different conference, his boss, chairman and CEO Glenn Britt, expounded on the cable company’s telephone rollout, the acceptance of a new interactive-video service and the competitive threat from regional phone companies.
SIX REGIONAL TEAMS
Hobbs, speaking at the Credit Suisse First Boston Global Media Week conference here said that Time Warner has six regional operating teams, 13 functional teams and about 200 employees working on the integration.
Time Warner and Comcast Corp. jointly agreed to purchase Adelphia’s 5.2 million subscribers in April for $17.6 billion in cash and stock. As part of the deal, Time Warner will receive about 3.5 million Adelphia subscribers.
At the conference, Hobbs said the Adelphia integration team is primarily working on back-office and billing issues. It is prohibited by federal law from actually running the Adelphia systems until after the close of the deal, expected in the first half of 2006.
Hobbs also said Time Warner will carry on its history of cutting-edge innovation, citing its “Start Over” service (which allows viewers to jump back to the beginning of a program that has already started) and plans for switched digital service and digital simulcast, which replicates analog-distributed channels in digital form as an interim measure to a full digital conversion. The benefits of digital simulcast include improved video and audio quality to customers and plant-maintenance savings, operators have said.
Hobbs said Time Warner has rolled out digital simulcast in Raleigh, N.C., and in New York City to strong results. He added that digital simulcast should be fully deployed across its footprint in 2006.
Switched broadcast video — a method of reclaiming spectrum used for analog channels — is currently being tested in Austin, Texas, and Hobbs said that about one-third of its divisions should have that capability by the end of 2006.
Hobbs also pointed to interactive-television initiatives, focusing on two tests that center on customer care. Time Warner has already rolled out the ability for customers to upgrade service and pay their bills through their TVs in seven divisions, said Hobbs, and that deployment will continue in 2006.
Citing an example, he said the Austin market received 7,500 upgrade requests through the interactive component in 60 days, more than one-third of all upgrade requests in that period.
At the UBS Warburg Global Media conference on Dec. 5, chairman and CEO Britt said that the MSO has passed the 1 million subscriber mark for its telephony service, reaching that milestone about a month ahead of schedule.
Time Warner Cable officially launched digital voice service in Portland, Maine in May 2003, making it available across its entire footprint by the end of 2004.
It had hoped to hit 1 million subscribers by the end of 2005. Britt said that goal was reached in November.
Britt added that Time Warner Cable has been growing basic subscribers as well as digital, high-speed Internet and voice customers, but that the voice service appears to be the main driver for that growth.
“I think that voice is very powerful and is driving a lot of our results at the moment,” Britt said.
Britt also offered an update on “Start Over,” which launched as a trial in about 18,000 homes in Columbia, S.C., about a month ago.
Britt said usage already is strong: 70% of those customers have used the service an average of about 10 times each. About half of Time Warner Cable customers used video on demand 25 to 30 times per month in that market, Britt said by way of comparison.
Britt said Time Warner Cable will compete with video offerings from telephone companies like Verizon Communications Inc. on three fronts — innovation, better marketing and better customer service — and not on price.
'WE’RE READY TO COMPETE’
He said that while he is not overly concerned with competition from telephone providers, he is taking them seriously.
“There is some question about what their return on investment is, but it doesn’t really matter from where I sit, because I assume they are going to do this,” Britt said. He added cable already has the platform in place and has a low-cost entry into the phone business, something the telcos don’t have with video.
“We’re ready to compete,” Britt said. “By the time they catch up to where we are, we’ll have moved somewhere else with innovation.”
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