Smit: TWC Will Go All-Digital

Comcast Cable Chief Says Integration Team Ready For TWC Merger

Noting at an industry conference today that Comcast has tackled big integrations before, Comcast Cable CEO Neil Smit said the cable giant has already assembled a small integration team for its pending merger with Time Warner Cable, adding that the initial focus will likely be on upgrading TWC plant to all-digital.

Smit, speaking at the Deutsche Bank Media, Internet & Telecom conference in Palm Beach, Fla., said the primary focus will be to keep both businesses running well.

Comcast agreed on Feb. 13 to acquire Time Warner cable in an all-stock deal valued at about $69 billion, including assumed debt.  The merger, which will create a 30-million subscriber cable powerhouse with a near national reach, is expected to be completed by the end of the year.

Comcast does have a strong track record in assimilating large acquisitions – in completed the integration of AT&T Broadband a year early back in 2003 and integrated its 2006 integration of Adelphia Communications systems  ahead of schedule.

Smit said once the deal is closed, the integration team will probably focus on particular markets more aggressively – he declined to name them.

“We expect the integration to go in a fairly quick rate,” Smit said.

Comcast has estimated about $1.5 billion in synergies as a result of the merger over the next three years, with about half being realized in the first year. He added that he believed the bulk of those synergies would be revenue related rather than cost related.

The combined companies will be better able to bundle services and the addition of Time Warner Cable also will allow the combined entity to better address the large enterprise business services market. The near-national scope of the companies also will help boost advertising revenue, both through linear channels and on video on demand  through dynamic ad insertion, he said.