webpilot, without trying to get into the hearts or minds of CAWS management, let me suggest an alternative, reasonable motivation for <The Company's strategy ... not to pursue analog-based television subscriber growth.> I suspect there has been no effort to chase away existing customers, but I admit I have no information as to the level of effort CAI has made to retain analog customers. I suspect we are seeing the impact of normal wireless cable system subscriber churn not offset by subscriber adds. If that is correct, it arises from the company policy to retain capital for the eventual digital deployment. (It is usually a $450 - $550 proposition to make a new analog wireless cable install, although some of this cost could be from otherwise dead inventory, e.g., from the pallets of settop boxes and downconverters.) This is exactly the policy that PCTV announced about two years ago, but I am not sure if it is still the PCTV policy.
That CAI management decision made back when may now be second-guessed as right or wrong, but we perhaps should allow for the possibility that in a very difficult situation management kept their eye on the ball and did what they could. Management had to be scrambling to figure out where the capital would come from to move the company in the direction that management felt it had to go, i.e., to digital conversion. Money spent on analog expansion that offered a 2-3 year payback would not seem prudent if you believed that digital conversion could occur in that time frame. In that light, the decision could look like a desperate yet reasonable measure to take.
Hindsight might suggest that these announcements by management were a big red flag that some investors responded to, and some did not. As I recall, they did seem to trigger a slide in stock price for CAWS and PCTV.
I'm not saying that CAI management hearts are pure, but I doubt that the facts surrounding their decisions as to growing vs. milking the analog subscriber base supports a fair conclusion that they must be either incompetent or venal. |
