New York -- The cable industry should 'stay the course' with respect to
rebuilds and new-service rollouts, despite pressure from Wall Street to curb
capital expenditures, senior cable executives said at a breakfast panel here.
'I have a lot of investors, with the stock prices as they are, [who] think
they should be cable operators,' Insight Communications Co. Inc. president and
chief operating officer Kim Kelly told the audience at the Cable &
Telecommunications Association for Marketing New York breakfast Wednesday,
referring to the amount of free advice she's received from some financial
analysts these days.
Kelly urged operators to keep doing what they're doing and to operate for the
Added Dave Watson, executive vice president of sales, marketing and customer
service for Comcast Corp., 'We need to spend to compete. The name of the game is
to stay the course.'
Executives said there are plenty of success stories in cable, if only Wall
Street would look hard enough.
Although digital-cable growth has leveled off, both Watson and Charter
Communications Inc. COO Dave Barford saw room for growth.
Modem penetration will continue to rise at a faster clip than digital,
'Data's still got a ton of growth ahead of it, which will also be funded by
new applications,' Watson said.
High-definition television will also present cable with some upside. Kelly predicted
that Insight could reach an HDTV-penetration level of 10 percent next year.
'I'm bullish on HDTV,' she said. 'We're well situated with satellite.'
Kelly believes Insight also could achieve a 30 percent penetration rate for
telephony, 'and 30 percent of a $110 billion business is looking just rosy.'
But all of that 'good' news has done little to sway Wall Street.
'There are a lot of people on Wall Street that do not understand our
business,' Kelly said flatly. Even with strong cash-flow growth reported by most
MSOs, she added, 'it's not that it wasn't good enough -- they just don't care at
Which leaves MSOs in a wait-and-educate mode. 'I think
this cycle will be happening for about a year,' Kelly said.