Charter Communications Inc. chairman Paul Allen heaped praise on CEO Neil Smit at the cable operator's annual shareholders meeting in Seattle Aug. 29, declaring he's pleased with Smit's first year on the job and the progress the company has made.
“With Neil at the helm, Charter has made significant progress across its entire business,” Allen said. He cited Smit's hiring of several top executives and the company's rollout of telephone service, debt refinancings and the sale of nonstrategic systems that have raised cash to help pay down debt.
“As a direct result of the financial and strategic actions we've taken, Charter today is a more solid company with growing potential,” Allen said.
Charter has struggled under the heaviest debt load of any cable company — it owes about $19.5 billion — but it showed improvement in the second quarter. For the quarter, it reduced basic customer losses to 37,800 from 41,000 a year ago, and reported revenue and cash-flow growth of 8.7% and 4.2%, respectively.
Smit, named CEO in August 2005, said Charter will continue to focus on four initiatives: improving the customer experience; focusing on targeted marketing of new services; focusing on high-return investments, especially in telephony; and taking an opportunistic approach to improving liquidity, extending debt maturities and reducing obligations.
Smit said Charter has already made headway on all four fronts. It has centralized customer-care operations to better serve subscribers and reduce response times.
A targeted marketing program has translated into higher revenue-generating unit growth and higher monthly revenue per customer. Telephony is available in 5 million marketable homes and Charter has raised about $1 billion from the sale of nonstrategic systems while refinancing about $6 billion in debt.
Charter closed two sales in July: 242,600 subscribers in West Virginia and Virginia went to Suddenlink Communications for about $770 million; and 75,200 subscribers in Kentucky and Illinois went to NewWave Communications for about $126 million.
A third deal — selling 43,700 subscribers in Nevada, Colorado, New Mexico and Utah to Orange Broadband for an estimated $75 million — should close in the third quarter.
Allen said later in the meeting that while he expects cable-industry consolidation to continue, Charter has no plans to either buy or sell assets at the moment.
“I think that there is probably going to be some further consolidation in the industry, and opportunities for systems to be swapped as well, between MSOs to further concentrate their systems,” Allen said. “But there is nothing in the offing for us to announce.”