Tele-Communications Inc. Ahead of Schedule on Cable Upgrades

Strategic Insights -

Tele-Communications Inc. is making progress on its cable infrastructure upgrade, which will enable two-way capability on over 90 percent of its network by the end of 2000. The company is ahead of schedule according to officials, who claimed this in a joint teleconference with AT&T, a potential buyer. The upgrade is a crucial step for TCI to provide AT&T with the capacity to enter the local telephone and Internet access markets.

Key Takeaways:

  • TCI's cable infrastructure upgrade is ahead of schedule, with 92-95 percent of the network expected to have two-way capability by the end of 2000.
  • The upgrade will provide AT&T with the capacity to enter the local telephone and Internet access markets.
  • TCI has already spent $400 million to $500 million of the $1.8 billion allocated for the rebuild.
  • The company plans to embed a cable modem in every digital set-top box it sells in the future.
  • AT&T expects significant synergies from the combination, including reducing customer churn and offering attractive service bundles.
  • AT&T's earnings per share assumptions are around $4.60 in 2001 and $5.60 in 2002.
  • TCI's president, Leo Hindery, stated that the company's plan is comparable to that of other major cable companies in the industry.
  • All metropolitan areas will have 750-MHz plant, suburbs will have at least 550-MHz plant.

Statistics:

  • 92-95 percent of TCI's network will be able to handle two-way data and voice transmission by the end of 2000.
  • TCI has already spent $400 million to $500 million of the $1.8 billion allocated for the rebuild.
  • $900 million will be remaining by the time the deal closes.
  • 11 million customers already have access to digital video.
  • AT&T expects earnings per share assumptions of around $4.60 in 2001 and $5.60 in 2002.

Sources:

  • Newsbytes
  • Tele-Communications Inc. (TCI)
  • AT&T Co. [NYSE:T]
  • United States (U.S.A.)