A new sense of urgency at Adelphia as it seeks new image
By Ian Katz
Business Writer
Posted August 4 2004
[“Bagan says Adelphia plans to enter the voice over Internet telephone market in 2005, joining Comcast, AT&T Corp., BellSouth Corp. and a bevy of smaller players.”]
[Ntop responded to an RFP from Adelphia about 2 months ago re cable telephony.]
While giving a tour of Adelphia Communications Corp.'s call center in West Palm Beach, company Vice President Chris Melcher keeps referring to a "new" Adelphia -- one that he says is pursuing the latest technology and taking its time with customers.
"We're not so concerned about how long they are on with each caller," he says, motioning toward a customer service agent. "We need to be sure everything is getting done the right way."
Adelphia is beset by bankruptcy, the conviction of its founder for fraud, and its lame-duck status as a company up for sale. But at its Southeast region headquarters, across the street from the call center, executives want to make one thing clear: Today's Adelphia has little to do with the one that created the mess.
To begin with, 10 of the top 16 executives nationwide joined the company within the past year. "I don't think the previous management saw the network [infrastructure] or the customers with the same sense of urgency that we do," says Melcher, vice president for law and public policy.
In the past 15 months, Adelphia has upgraded its system throughout South Florida, spending $200 million alone in Palm Beach County, where it reports 470,000 subscribers. The company says it has 46,000 subscribers in Broward, where Comcast Corp. is the dominant player, and 80,000 in Miami-Dade.
Most Adelphia subscribers in Palm Beach now have access to high-definition TV and digital video recording, or DVR. Areas of east Boca Raton and Boynton Beach are scheduled to be upgraded in the next six weeks.
Adelphia also plans to put HDTV and DVR in Broward by the end of the year. In Miami-Dade, most subscribers already have access to both services.
HDTV transmits a signal with much greater resolution than normal TV. DVRs record TV programs on a hard-disk drive for later playback.
The TV industry is especially upbeat about HDTV. "It's about to explode," says Anita Dorf, Adelphia's regional vice president of marketing. "Stores are reporting that most TVs [sold] are HDTVs."
Melcher and Joe Bagan, senior vice president in charge of the Southeast region, which covers six states and Puerto Rico, can't be blamed for trying to distance themselves from Adelphia's recent past.
The nation's fifth-largest cable operator, Adelphia filed for Chapter 11 bankruptcy in June 2002. Last month, founder John Rigas and his son Timothy were convicted of securities and bank fraud. And the company said in April that it plans to sell all or part of itself.
"New management is doing a good job, and the best it can under the circumstances, but these are not good circumstances," says Aditya Kishore, senior media analyst with The Yankee Group, a Boston-based consultant. "Adelphia's financial capability is limited by its current situation. They don't know where they are going to be in two years."
But Bagan says CEO William Schleyer and Chief Financial Officer Vanessa Wittman are handling the bankruptcy process, allowing the rest of the company to attend to day-to-day operations. "We see the headlines, but a lot of that is about the past," he says. "We were all brought here to take this company out of bankruptcy.
"Sure, the question of will I have a job must creep into [employees'] minds for a minute or two, but they are focused on what they are doing," Bagan says. About 600 of the company's 14,000 employees are based in South Florida.
In July, Adelphia, based in Greenwood Village, Colo., received court approval for an $8.8 billion financing plan to exit bankruptcy. It also hired investment banks UBS and Allen & Co. as advisers to help it sell itself.
But Adelphia could continue to operate independently, working to increase its value before selling. In fact, according to company filings with the Securities and Exchange Commission, CEO Schleyer's employment agreement offers him pay incentives for taking the company out of bankruptcy and improving its financial performance.
For Adelphia, the competitive landscape is becoming more complicated. Since most neighborhoods only have one cable TV company, the primary challenge comes from satellite services, including DirecTV Inc. and DISH Network. The satellite companies don't break out subscribers by geographic area, but they are gaining more than 300,000 nationwide per quarter, while the cable companies are losing TV subscribers.
The battle to sell bundled services is also ratcheting up. Adelphia competes with Comcast, BellSouth Corp. and others for broadband Internet customers. Bagan says Adelphia plans to enter the voice over Internet telephone market in 2005, joining Comcast, AT&T Corp., BellSouth Corp. and a bevy of smaller players. |
