Time Warner executives were cagey in a Wed. earnings call with investors about how profitable newly acquired Adelphia cable systems will be this year and what the firm will have to spend upgrading the network to provide VoIP, broadband, VoD and other advanced services. The company updated its outlook for the year, saying it expects to convert 35%-45% of its adjusted operating income before depreciation and amortization into free cash flow. Beyond that, executives declined to speculate on how the Adelphia takeover would affect the operations’ profit margins.
After a Q1 telecom “rally,” steady growth should continue in the upcoming quarter, experts said this week. Slow, rather than explosive, growth will characterize Q2, analysts said. They term the market in a renewal phase, though some cautioned investors might be overvaluing carriers’ worth and growth potential after several years of undervaluing them.
Time Warner, taking a cue from Carl Icahn, will boost its cable spinoff later this year to reduce business conflicts among the firm’s divisions and spark more content deals with other companies, said investors and analysts. The company plans to give 16% of Time Warner Cable to investors when it completes the $17.6 billion purchase of Adelphia systems with Comcast by June 30 (CD Feb 2 p13). Observers we spoke with agreed that figure likely will reach at least 20% now that the firm has said it’s studying other options for the cable unit in a settlement with the financier (CD Feb 21 p10). Icahn had pushed for Time Warner to completely separate itself from the cable unit, an option one investor said he supports.
LAS VEGAS -- American consumers have adopted wireless technologies faster the past 3 years than experts had anticipated, prompting Hollywood studios and networks to make mobile a top priority, speakers said at the NATPEMobile++ conference here Mon. Alex Bloom, Verizon Wireless assoc. dir.-programming, said “the Internet taught us [that] speed kills,” and “the consumer experience has improved. There is also real revenue now in mobile deliver content.”
LAS VEGAS -- American consumers have adopted wireless technologies faster the last 3 years than experts had anticipated, prompting Hollywood studios and networks to make mobile a top priority, speakers said at the NATPEMobile++ conference here Mon. Alex Bloom, Verizon Wireless assoc. dir.-programming, said “the Internet taught us [that] speed kills,” and “the consumer experience has improved. There is also real revenue now in mobile deliver content.”
With Comcast CEO Brian Roberts making no secret of his ambitions for further acquisitions, consumer advocates are concerned that the biggest U.S. cable operator could become too big. But there’s no clear answer to the question: How big is too big? The U.S. Appeals Court, D.C., in Time Warner v. FCC, found in 2001 that the FCC wasn’t justified in establishing the old 30% horizontal ownership cap and remanded the case to the agency. The FCC has been examining the issue since then but has come to no conclusions.
AT&T said it received favorable tax ruling from IRS on its planned spinoff of AT&T Broadband to Comcast. Under ruling, spinoff will be tax-free to AT&T Corp.’s U.S. shareholders. IRS ruling satisfies condition of proposed merger of AT&T Broadband and Comcast and “marks a significant milestone toward completion of that merger,” AT&T said.
Women still hold few executive or board positions in communications companies, according to 2nd annual Annenberg Public Policy Center (APPC) study issued Tues. There’s been little change since last year’s study, said ex-FCC Comr. Susan Ness, dir. of APPC’s Information & Society Section. “The results continue to be appalling,” she said at news conference. “With few exceptions, we have not moved beyond tokenism in the number of women in top leadership positions or serving on the boards,” she said. Study reported 2001 figures, based on annual reports and Web sites.
AT&T Pres. David Dorman has been named chmn.-CEO, replacing Michael Armstrong when company completes spinoff of AT&T Broadband and merges with Comcast to form AT&T Comcast. Armstrong will leave AT&T at that time and become chmn. of new company. Transaction is expected to be completed at end of year, following regulatory approvals. Dorman, who joined AT&T as pres. in Dec. 2000, was CEO of Pacific Bell when SBC acquired it in 1997. He was named exec. vp of SBC and later became CEO of now disbanded Concert, joint venture created by AT&T and BT Group.
AT&T’s board was weighing its options for its broadband unit at our deadline. Board was meeting Thurs. evening and again Fri. to discuss ways to handle possible spinoff or sale. AT&T Chmn. Michael Armstrong in recent weeks has talked with several companies including AOL-Time Warner, Cox, Disney and Microsoft on either or acquiring or investing in unit. Talks came after AT&T rejected unsolicited Comcast $44.5 billion offer as too low (CD July 19 p5).