Simmons Buys RCN N.J. System - Multichannel

Simmons Buys RCN N.J. System

Author:
Publish date:

Former Simmons Communications Corp. founder Steve Simmons joined the roster
of former cable executives inching back into the business when he closed his
$245 million acquisition of about 80,000 subscribers from RCN Corp.

Simmons announced the deal to buy the former RCN system, located in
Princeton, N.J., in September.

In an interview, he said his company, Patriot Media and Communications, is
gearing up to provide high-speed-data, video-on-demand and high-definition
television service by next year.

The purchase will end up costing $289 million, including about $44 million
for upgrades. Not including upgrade expenses, the deal works out to about $3,060
per subscriber, or 11 times system cash flow.

Simmons said about 25 percent of the systems have already been upgraded. The
plan is to upgrade the rest of the properties to 870-megahertz capacity by
mid-2004.

Simmons said he sees huge potential in the Princeton systems, perhaps the
most from high-speed-data service. He looks forward to cable-modem penetration
rates of 30 percent to 35 percent in the next few
years.

Related