TWC won't have to buy stake in entity
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NEW YORK -- Time Warner Cable will not have to spend money for now on buying a stake that parent company Time Warner owns in an entity that houses many of its cable arm's subscribers, TWC chairman and CEO Glenn Britt said here Monday.
TW has informed TWC, of which it controls 84%, that it won't sell its stake in the entity given currently depressed cable valuations, he said at a UBS investor conference.
Britt added that TWC is looking at other uses for that cash, including possible acquisitions, dividends or stock buybacks. A bid this year for small cable operator Insight Communications failed, though, he said. Insight ended its auction amid the global credit crunch, which has hampered private equity groups' ability to bid on assets.
However, Britt said at the annual Global Media & Communications Conference that other small cable operators, especially ones without a triple-play product, could come up for sale.
Asked whether the lack of carriage of the NFL Network has had an impact on his firm, Britt shrugged the channel off as "less than exciting" and said he has seen "relatively little consumer reaction."
The TWC boss also told investors that cable systems in Los Angeles and Dallas, which needed much upgrade work after their purchase from Adelphia Communications and Comcast Corp., are stabilized now and will contribute to the cable giant's growth in 2008. next year.
But he also admitted that the two markets have seen some competitive impact from Verizon's FiOS TV and AT&T's U-verse video services. "They have made good headway there, especially Verizon," Britt said. But he also emphasized that the telecom competitors' financial impact on TWC is "pretty small right now."
He also said that his firm is not bidding in the current wireless spectrum auction as he doesn't feel it needs to aggressively push into wireless for competitive reasons for now.
"We will not be in this auction," he said.
Britt added that a consortium of TWC, other cable firms and Sprint hasn't "completely decided" yet how to use some spectrum it owns, but is about to "spending some money" to clear it.
He also allayed investor fears that the cable operator could spend large amounts on wireless. "I have no intention to build the fifth wireless network," because that's already a crowded market and would cost a lot, Britt said.
While he didn't rule out shelling out capital on wireless if there is "a good investment case as an offensive move" in the future, he said TWC will be sensible and invest over years rather than dumping a lot of cash overnight.
Comcast also said Monday that it has decided not to bid in the 700 MHz wireless spectrum auction.
"The 20 MHz of spectrum acquired in the wireless auction last year with our cable partners in SpectrumCo provides us with significant long-term flexibility and many strategic options," Comcast senior vp D'Arcy Rudnay said in a statement. "We will continue to explore how wireless can complement our services through various partnerships and consumer trials.