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Will T's play thru TWX cut ATHM out of the picture or put it in?



I can see it both ways: T uses TWX as major player/major player to get the cable pipeline into most homes w/ concommitant possibe services. Or, T consolidates all it's efforts in cable, at least for the internet access, under ATHM.



Help me think this thru (mkt seems to have seen the former) as ATHM was up >4 when I read the releast this morn, but closed off 5. Is that 9 points a vote?



jackhlt
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jckhlt,
I would be reluctant to place any specific interpretation on the apparent volatility. I think that is something we are learning to live with, although I suspect that the XCIT proposal has damped some of the fluctuations.

I think you may already know my answer to your main question. T is NOT, IMHO, going to offer CLEC service only to the 52% of homes that have a desktop. Why should they cut themselves off from almost half of their potential market?

Even before today's announcement, T CLEC service was, in my opinion, always going to have a potentially greater market penetration than ATHM. And why not? This is T's core business, and their target is those juicy RBOC margins (if you'll pardon my grammar).

I hope this helps.
John

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I think you may already know my answer to your main question. T is NOT, IMHO,

going to offer CLEC service only to the 52% of homes that have a

desktop. Why should they cut themselves off from almost half of their

potential market?

Even before today's announcement, T CLEC service was, in my opinion,

always going to have a potentially greater market penetration than ATHM.

And why not? This is T's core business, and their target is those juicy

RBOC margins (if you'll pardon my grammar).

I hope this helps.

John







Thanks. If T goes for the national market of cable via TWX , what chance does ATHM have?
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Correct me if i am wrong but AT&T will own 50 plus percent of @home. I see a better chance of an @home roadrunner deal out of this. I think AT&T will leave them as a separate division for now. If @home wins they win if it fails they win. I am long @home :-)
Richard
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Richard, heres a CBS Marketwatch bit:



The companies also haven't fully explained how the joint venture will

treat high-speed Internet services. AT&T, after its acquisition of TCI,

will control At Home (ATHM), a provider of cable Internet service, while

Time Warner is funding a competitor, called Road Runner.



"Each cable operator in this country has retained, and will retain, his

prerogative on the data-services activity. We had no conversations as

part of this joint venture about At Home orRoadrunner," said TCI

executive Leo Hindery, who'll head AT&T's cable services.



Initially, Roadrunner will be offered in Time Warner systems, and At

Home in TCI and affiliate systems, executives said during a news

conference. "I don't see a conflict between the two services," Levin

said.



Above sounds positive for ATHM, as I read it, but would appreciate comments
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JHLT wrote (in post 4065):

Above sounds positive for ATHM, as I read it, but would appreciate comments

I wrote (in post 4022):

AT&T obviously wants to offer phone service over cable anywhere it can.

TWX is the cable service owned by Time Warner.

RoadRunner is a competitor of @Home, but in mutually exclusive markets. It is kind of like Time Warner's equivalent of @Home for their TWX markets.

TWX would benefit from offering phone service in addition to other (e.g. Cable TV, ISP) services. AT&T would benefit from this, too.


Still sounds pretty much right to me. So, what are you asking/saying?

nole1
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I wrote (in post 4022):

AT&T obviously wants to offer phone service over cable anywhere it can.

TWX is the cable service owned by Time Warner.

RoadRunner is a competitor of @Home, but in mutually exclusive markets.

It is kind of like Time Warner's equivalent of @Home for their TWX

markets.

TWX would benefit from offering phone service in addition to other (e.g.

Cable TV, ISP) services. AT&T would benefit from this, too.

Still sounds pretty much right to me. So, what are you asking/saying?

nole1



Think I am coming to see it as you described, or at least hope so. My initial concern was that T (thru absorbing TCOMA and thus effective voting control of ATHM) would prevent ATHM from venturing into telephony--a natural extension of its cable entre. Also, that T's dumping its none-too-successful Worldnet on ATHM would likewise be of no advantage to ATHM.



Jack
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Will T's play thru TWX cut ATHM out of the picture or put it in?

I can see it both ways: T uses TWX as major player/major player to get the cable pipeline into most homes w/ concommitant possibe services. Or, T consolidates all it's efforts in cable, at least for the internet access, under ATHM.


Let's keep it simple. It's all about money right? Roadrunner is privately held and TWX has controlling interest. T, with this joint venture, is now in position to shut AOL out and yet maintain a healthy competition between the two cable broadband providers. Looking ahead, they're able to fend off the FCC concerns of monopolizing the industry.

Looks to me like this move longterm will allow ATHM to accelerate growth without having to worry about excessive margin trim due to competition within the bb cable arena.

This move helps create a better growth enviroment for ATHM. How can it not be seen as a positive?
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My initial concern was that T (thru absorbing TCOMA and thus effective voting control of ATHM) would prevent ATHM from venturing into telephony--a natural extension of its cable entre. Also, that T's dumping its none-too-successful Worldnet on ATHM would likewise be of no advantage to ATHM.

Jack,
In business development terms, ATHM has never possessed what I would call an entree. The entree service is the one that provides the conduit. Cable TV has a phenomenally high penetration, and it is this success that both AT&T (for telephony) and ATHM (for cable access) intend to leverage for their own services.

At the risk of tedious repetition, AT&T's potential market for CLEC service is twice the size of ATHM's.

As for Worldnet, I think we should look on the proposed sale as an exercise to focus on core competencies. The revenue stream, and demand stimulation, help ATHM.
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JHLT wrote:

Think I am coming to see it as you described, or at least hope so. My initial concern was that T (thru absorbing TCOMA and thus effective voting control of ATHM) would prevent ATHM from venturing into telephony--a natural extension of its cable entre. Also, that T's dumping its none-too-successful Worldnet on ATHM would likewise be of no advantage to ATHM.


Of course AT&T is going to separate its telephony and not give it to @Home. @Home is going to go against AOL, not MCI or Sprint! I don't know where you came up with the notion that AT&T was going to set @Home up as its internet telephony branch.

Each company is constrained by laws, by ownership and by competition. As for AT&T's dumping of its WorldNet on @Home, that will give @Home a subscriber base that Excite can work on right away, in addition to the broadband base that is building. It is much closer to the "natural extension" you describe than telephone service by @Home. Nothing troublesome there. Good luck.....

nole1
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