Charter hangs up on AT&T bid
Co. pursues 'clustering' strategy with small acquisitions
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Charter CEO Jerry Kent said the St. Louis-based company would grow through sales of new services such as digital cable and cable modems, and currently has no plans to enter competish for AT&T's systems. A $58 billion offer for the AT&T systems by Philadelphia-based cabler Comcast has fueled speculation that rival bids by Charter and others will follow.
"While we are keeping our options open, we are not currently in negotiations with AT&T," Kent said in a conference call. He added that the company isn't interested in joining an AT&T cable bid led by another company.
But the chief exec said Charter would continue to make selected small acquisitions elsewhere, as the company pursues a "clustering" strategy emphasizing growth in targeted markets. Most cable-system operators currently employ such an approach, often engaging in asset swaps with one another to bolster individual markets.
Charter's second-quarter red ink swelled from a $196.8 million loss in the same period last year, amid continued heavy spending on system upgrades to facilitate deluxe services.
Charter marked a 17% rise in quarterly revenue to $928.5 million.
The St. Louis-based company expects 2 million of its customers to take digitial services by year's end, and unlike some other cablers the company stuck by previous subscriber growth forecasts for 2001. Charter said it expects 2001 sales to rise 14%-16% on gains from sales of digital and Internet services.
Charter is the nation's fourth-largest cabler with 7 million subscribers overall. Cox Communications, the No. 5 U.S. cable-systems operator, said last week its basic-service subs would grow by just 1%, or half the highest end of a previous company estimate.
At Charter, good customer service helped the cabler improve its customer retention by over 2% in the latest quarter, Kent said.
But despite the company's relatively upbeat growth projections -- and the absence of any plans for a pricey acquisition -- Charter shares closed down 16 cents, or almost 1%, at $21.55 on Monday.
(Bloomberg News contributed to this report.)
