Q1 2006 Results

[Bob]

I have listened to the results and thought I would psot some of the things that were said:

• Speed-up the integration process
• OFT approved merger with Virgin Mobile from their point of view on Monday
• As soon as the transaction has closed they will acquire the Virgin Marketing Head to help use the branding as best as possible
• Will generate free cash flow, but havenââ‚ƚ¬Ã¢â€žÂ¢t decided how it will be allocated but they have a range of options
• Premiership †“ they did make and initial bid for the six packages †“ they werenââ‚ƚ¬Ã¢â€žÂ¢t happy with the auction process which they felt favoured Sky †“ no way to bid for a few of the packages at once †“ meaning you could be stranded with one or two inferior packages †“ stressed they will show ALL the football matches
• NTL areas to follow with DVR and HDTV before the end of the year
• 72% of DTV customers have access to VoD
• 84% of their TV base is digital
• TalkTalk not a threat because they believe they are targeting the customers that NTL are trying to avoid
• They hope to have all World Cup matches in High Definition for all customers †“ I assume they mean old Telewest though
• Old NTL price increases for Sky premiums in September
• A fixed/mobile telephony service is being planned
• They are outsourcing some of the fault related staff to IBM †“ starting July
• Removing jobs out of the company to remove any duplication between NTL and Telewest
• 50% of London has been upgraded for broadband and Digital TV †“ including Videotron
• Researching the opportunites for LLU
• Intend to acquire content for a Virgin Sports and Movie channel - will look at possible partnerships (i.e. Setanta, ESPN etc.) - this is being reseached as we speak
• Interesting article here: http://media.guardian.co.uk/broadcas...771050,00.html

The press release regarding the results is available here and the webcast is available here

[Neil]

NTL areas to follow with DVR and HDTV before the end of the year.

Ok.....

They hope to have all World Cup matches in High Definition for all customers – I assume they mean old Telewest though.

Something doesn't quite add up there-either it will be in place for all customers for the World Cup or it won't....

TalkTalk not a threat because they believe they are targeting the customers that NTL are trying to avoid.

So why are they chucking deals at people to keep them via retentions?

Old NTL price increases for Sky premiums in September.

*Sigh*

A fixed/mobile telephony service is being planned.

"Coming Soon"?

50% of London has been upgraded for broadband and Digital TV – including Videotron

This has been going on for years & years-what about the other 50%??

[Edit]-Great post Bob.

[Chrysalis]

sounds like more lies from ntl here.

NTL areas to follow with DVR and HDTV before the end of the year

what areas? all areas? unlikely.

As soon as the transaction has closed they will acquire the Virgin Marketing Head to help use the branding as best as possible

The rubbish about virgin wanting ntl to sort their problems out first before rebranding I think is a publicity stunt, evident with the increased outsourcing to IBM and the current redundancies.

TalkTalk not a threat because they believe they are targeting the customers that NTL are trying to avoid

Whats with the haggling when customers tell them off to talk talk then.

They hope to have all World Cup matches in High Definition for all customers

Right so either they going to get HDTV working on analogue or digital hdtv will be here by june?

Intend to acquire content for a Virgin Sports and Movie channel - will look at possible partnerships (i.e. Setanta, ESPN etc.) - this is being reseached as we speak

Setanta I would think is their top target get those premiership games in the bag.

[Womble]

Angel Dobardziev

Follow-up on NTL Q1 results: bumpy ride ahead

Following yesterday's comment on NTL's Q1 results we listened to the NTL teleconference, and we think it is worth expanding on this important development. The key thing to note was the bullishness of its management about its future prospects. Led by CEO Steve Burch, who brings substantial experience from Comcast in the US, NTL's management was very confident that it could execute on the accelerated integration of Telewest and Virgin, as well as the cost-reduction programme. Interestingly, only about 50% of the 3,400 positions that are to be lost will be through redundancies, the rest through natural attrition.

Management was also bullish about its growth prospects in upgrading its customers to triple and quadruple play, mostly by adding broadband and mobile to the mix. It also announced that NTL will soon look to trial and deploy Fusion-type fixed-mobile convergence (FMC) offerings, rather than stop at pure commercial bundles. Finally, NTL will continue investing in its business customer operations, particularly in the SME space, where, following C&W's decision to focus on large enterprise customers, it sees a major opportunity. Comment: Clearly, it is NTL's management's job is to be positive about the future. We believe it has a good plan, but there are massive challenges involved in executing it, on all fronts.

Looking at its growth strategy, it sensibly aims to drive home the message that quadruple-play bundles will deliver the growth. But that will be tricky. Its TV and telephony customers have been static for a while now, and it is talking about price increases from June in both of these areas, which is hardly going to stimulate further growth. Broadband growth has been healthy at around 200,000 net adds per quarter, but that will become difficult to sustain as the undbundlers, led by Carphone Warehouse, ramp up their efforts. As for the mobile element, Virgin's lack of network ownership and prepaid customer base are far from compatible with its vision of quadruple-play bundles and FMC services.

We believe its aggressiveness on the integration, cost reductions and efficiency improvement is appropriate. But that doesn't mean its execution is without risks. NTL is effectively reworking the body and the engine of its car, while driving at high speed - a highly risky endeavour. Especially considering that its reputation for service is already poor, and there is a real risk that the disruption may make matters worse before they get any better. NTL stresses that it aims to improve matters here by outsourcing some of its call-centre operations to IBM. That remains to be seen, as outsourcing call centres has been credited with reducing costs, but not always maintaining (let alone improving) customer service levels.

Overall, the new NTL (soon to be Virgin) has a good vision of where it wants the business to be. Much will depend on execution - but even with its best efforts, we believe there is a bumpy ride ahead.


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Originally Posted by Chrysalis

sounds like more lies from ntl here.

Originally Posted by Chrysalis

what areas? all areas? unlikely.

Does it say all areas ? No, it will be gradual, like VoD.

Originally Posted by Chrysalis

Whats with the haggling when customers tell them off to talk talk then.

Presumably because they still want to keep their existing customers.

Originally Posted by Chrysalis

Right so either they going to get HDTV working on analogue or digital hdtv will be here by june?

Well it did they they hope - but either as Bob said, they were referring to just all TW customers, or they have [very] unrealistic hopes.

They seem to know what they want to do, whether it's what their customers want remains to be seen. I'm not convinced that outsourcing support is a good idea, or the way to improve it.

[James Henry]

Originally Posted by Paul M

Does it say all areas ? No, it will be gradual, like VoD.

Presumably because they still want to keep their existing customers.

Well it did they they hope - but either as Bob said, they were referring to just all TW customers, or they have [very] unrealistic hopes.

They seem to know what they want to do, whether it's what their customers want remains to be seen. I'm not convinced that outsourcing support is a good idea, or the way to improve it.

indeed.

So... TalkTalk are targeting customers ntl don't want, however ntl aren't willing to let current customers that apparently they don't want go.

Erm.. which is it? If TalkTalk isn't a threat as ntl aren't interested in the same customers why are they offering half price and below to keep them? Sounds like BS to me to be honest. Either they want these customers or they don't, whether they are current customers or not. If they don't want them they really need to stop commission hungry retentions staff offering discounts.

Researching LLU is amusing. A more appropriate phrase would be researching how much rollout can be done before they get smacked with Significant Market Power and have to open up the networks. LLU 'research' was done by 2004.

London upgrades have slipped nicely behind schedule I guess if only 50% are done. I hope that 50% is just original ntl and doesn't include the Telewest areas of London. Not that it makes that much difference as a huge swathe of London isn't cabled anyway, bizarrely.

I hate this financial gack. They can paint themselves as having achieved 3.9 million operating income. 0.9 million operating loss, or the actual end figure of £119.9 million net loss. Glad I'm not an accountant having to sift through a shedload of poop before I finally get to what actually left the bank account.

If anyone more accounting savvy than me can figure out exactly what all the nonsense means and how much cash ntl made/lost that'd be cool.

Originally Posted by Bob

I have listened to the results and thought I would not some of the things that were said:

• TalkTalk not a threat because they believe they are targeting the customers that NTL are trying to avoid

Now that is the best bit of Bull**** i have heard in a long time.

No the real truth is they

A. Have no answer or package in place yet other than offer silly retention deals.
B. Are becoming very very arrogant about there position in the UK market.
C. Are turning or will turn customers against them when they move customer service to India

Retention deals. I phoned to say you can stuff it and they have now offered me 10meg for life of contract for £12.99 a month . That is how desperate they are to stop customers leaving. so i have taken the deal and will use them until such time as they go down for offering silly deals like that. If they are daft enough to offer that i am daft enough to take it. Sorry but NTL have now hit the bottom of the barrel as far as i am concerned when they dump 6000 hard working people and move customer service out of the country.

[Chrysalis]

Originally Posted by Paul M

Does it say all areas ? No, it will be gradual, like VoD.

Presumably because they still want to keep their existing customers.

Well it did they they hope - but either as Bob said, they were referring to just all TW customers, or they have [very] unrealistic hopes.

They seem to know what they want to do, whether it's what their customers want remains to be seen. I'm not convinced that outsourcing support is a good idea, or the way to improve it.

think about it a second. You say perhaps they want to keep their customers, and ntl say that talk talk are targeting customers they want to avoid, both statements conflict.

talk talk are targeting customers who will jump at the possibility of free broadband and simply cheap service.

ntl are saying they dont want this type of customer, judging by that statement.

retentions haggling with these customers on the other hand says ntl do want this type of customer.

Doesnt seem cut and dry to me.

Regarding the areas if its gradual then they should say gradual, it just says areas why? because people will assume all areas which of course is rubbish. Gradual isnt even correct, VOD is "not" gradual as its possible some areas will "never" get VOD if ntl dont intend on fully rolling out digital which is the status until someone says otherwise.