CFOs: Digital Conversion Won’t Drain Capital5/04/2004 11:10 AM Eastern
New Orleans -- Capital expenditures are expected to continue to decline, even with new products like digital-video recorders, cable-telephone services and the push to convert their networks to all-digital technology expected to drain at least some money from cable companies’ coffers, a panel of chief financial officers from top MSOs said Tuesday.
Comcast Corp. co-CFO John Alchin said the nation’s largest cable company plans to spend $1.5 billion-$2 billion on the all-digital conversion alone in the next five years.
But compared with the $40 billion the MSO has invested in its network since 1996, that is a relatively small amount.
Alchin said Comcast’s capital-expenditures budget, at $4 billion in 2003, is expected to drop to between $3.3 billion-$3.4 billion this year.
“I don’t want to make light of this because $1.5 billion-$2 billion is not chump change, but it really is compared with a $40 billion investment,” he said.
He added that Boston and Los Angeles will likely see the conversion first. The rest of Comcast’s markets should be going all-digital in the next two to three years.
Cox Communications Inc. CFO Jimmy Hayes said new services like voice-over-Internet protocol, DVRs and HDTV will cost money but have relatively quick payback periods.
Hayes was not willing to give a time frame for Cox’s all-digital conversion, saying only that it won’t be this year. “The problem would be if you went all-digital platform at the wrong time,” he added. “Today would be the wrong time.”