Comcast trying to sell 46 cable systems

May 26, 2008 5:21:39 AM PDT
Comcast Corp. is trying to sell 46 cable systems serving 400,000 to 500,000 subscribers as it seeks to improve efficiency by shedding outlying operations.

Most of the cable systems are in eight states - Maine, Kentucky, Louisiana, New Mexico, Virginia, Georgia, West Virginia and California.

Robert Serrano, an analyst at SNL Kagan in Monterey, Calif., said Comcast could get $3,000 to $4,500 per subscriber, although the actual cost would vary depending on the asset.

But "it's not about money at all," he said. "They are pruning some of the more outlying areas in order to make a more efficient cluster."

The Times Record in Brunswick, Maine, was the first to report that Comcast was selling 46 systems.

John Goran, chairman of the cable TV regulatory board in Freeport, Maine, said Comcast told him about its plans a week ago. Comcast, the nation's largest cable TV operator, serves 14 towns in Maine, but is looking to get out of 11 towns in the state.

The most logical buyer is Time Warner Cable Inc., which serves 85 percent of Maine and surrounds the 11 municipalities served by Comcast, he said. A Time Warner spokesman declined to comment.

Comcast took over the Maine systems after it acquired Susquehanna Communications in May 2006 for $540 million in cash. The cable giant had already owned 30 percent of SusCom and had valued the entire asset at $775 million.

When a cable system is concentrated in an area, distances between customers are shorter and it becomes cheaper to provide services, Serrano said. If the area also happens to be more affluent, the cable company would have the added benefit of receiving higher revenues per household.

After selling the nearly four dozen systems, Comcast might buy other cable systems that are closer to where it already has a substantial presence, said Bruce Leichtman, president of the Leichtman Research Group in Durham, N.H.

Goran hopes his new cable operator will be able to offer digital voice services, something his Freeport home doesn't get from Comcast even though it's close to downtown.

"We don't have Internet phone, no video on demand or any of those advanced services," he said. "We have standard cable, and high-definition and premium channels and that's it."

Shares of Comcast fell 58 cents, or 2.6 percent, to $21.62 on Friday.


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