December 01, 1999 17:20
Charter, AT&T unit to swap certain cable systems
ST. LOUIS, Dec 1 (Reuters) - Cable systems operator Charter Communications Inc. said Wednesday it agreed to swap certain cable systems with a unit of AT&T Corp. as part of a plan to build regional cable "clusters" that are cheaper to operate.
Charter, the fourth-largest cable company and brainchild of Microsoft Corp. co-founder Paul Allen, said the agreement with AT&T Broadband & Internet Services would create more efficient cable operations and speed the delivery of broadband services such as digital cable and high-speed Internet access to more customers.
Financial terms were not disclosed.
Charter plans to take over AT&T cable systems serving about 704,000 customers in the St. Louis area and additional communities in Missouri, Illinois, Alabama and Georgia.
AT&T's broadband unit would take over certain Charter cable systems serving about 632,000 customers, and receive an undisclosed amount of cash.
"Charter's strategy for growth from the beginning has been to geographically cluster our cable systems to gain operating efficiencies and economies of scale," Jerald Kent, president and chief executive officer of Charter, said in a statement.
"Operating regional clusters -- like the 800,000-customer cluster we will serve in Missouri and Illinois, which includes some 500,000 customers in metro St. Louis -- helps us accelerate technology at even greater speeds," he said.
"We are upgrading our cable infrastructure to offer customers digital cable television, high speed Internet and to build in the capacity for full broadband portal services."
The proposed swap is subject to completion of definitive documentation and must receive regulatory approvals, which is expected to take several months. Until then, all properties included in the swap will continue operating under their current management, Charter said.
Ahead of the news, shares in Charter Communications, which was priced at $19 when it went public in November, closed up 1-11/16 at 24-7/8. AT&T's shares ended down 1-1/8 at 54-3/4.
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