Altrio Plows Ahead with Overbuild Plans
By JOE ESTRELLA and LINDA HAUGSTED -- Multichannel News, 3/26/2001
At a time when other overbuilders have folded or scaled back, Altrio Communications is pushing ahead with plans to enter the Southern California market.
The Los Angeles-based startup has filed for franchises or open-video licenses in Pasadena, Monrovia, Burbank, Glendale and Arcadia, Calif. It intends to offer cable, high-speed Internet access and phone service to some 427,000 homes.
The company is also in talks to secure franchises in Los Angeles and the surrounding county, said spokeswoman Brenda Trainor.
"I think we have the right business plan to make things happen," Trainor said.
That business plan calls for an exclusive focus on Southern California, a region Altrio officials know well from their days as executives with Intermedia Partners.
Elsewhere last week, RCN Corp. moved forward with its Redwood City, Calif., franchise in the San Francisco Bay area.
Altrio chief financial officer Ted Liebst believes the company's $125 million in initial equity financing will be enough to build in all five San Gabriel Valley communities. It has commitments for another $125 million from the same investors.
However, raising additional debt is difficult these days, given the shaky state of the capital markets.
"It's a tough market, but we're confident we'll raise the money," said Liebst, who would not reveal how much debt Altrio is looking to take on.
Liebst believes that unlike some overbuilders-which overextended themselves by trying to build networks in several states at the same time-Altrio is taking a prudent approach by focusing on just one region, albeit one as large as Southern California.
"We want to build here, go slowly and do it right," he said.
So far, Altrio's focused approach has impressed Pasadena officials.
Altrio "hasn't spent a lot of its money, so there's more cash on the books in relation to their franchise markets," said Pasadena IT planning and project manager Lori Sandoval.
Sandoval expects Pasadena residents, who are currently served by Charter Communications Inc., to look closely at Altrio.
"Charter is one of the best operators in the country, but they've had some issues with service," she said.
In Redwood City, RCN is offering bundled service packages ranging from platinum (premium digital service, two phone lines with unlimited local and regional calling, 16 calling features and unlimited Internet access) to offerings for heavy computer users with no interest in cable. It's competing with AT & T Broadband for the city's 28,000 homes.
But RCN also continues to streamline its operations. It is shuttering one of its national call centers, in Lehigh Valley, Pa. Three centers will remain: the facility Wilkes-Barre, Pa., which is expanding; and one each in Massachusetts and Virginia.
Elsewhere, Comcast Corp. may face competition in Tallahassee, Fla., where a small SMATV operator is seeking a franchise to offer residential cable service.
Locally based Capital Engineering and Communications, which already offers video services to area businesses, has an application pending with the city that would allow it to offer residential service as well.
