Cash-Rich TCI to Speed Roll-Out of New Services

Tele-Communications Inc. said Wednesday that its improved financial performance would allow it to accelerate the roll-out of new services to its cable customers this year.

Capping a two-day investors conference at TCI’s headquarters near Denver, John Malone, chairman of the nation’s largest cable company, said it would make digital television services available to all of its customers by year-end and that the company would accelerate the delivery of high-speed data services that had been put on hold by financial difficulties.

The company says it will cost about $100 million to offer digital signals to its 14 million customers. The service, which requires TCI to modify its plant and provide customers with set-top boxes, offers more channels and better picture quality, enabling the company to compete against digital satellite services.

Rebuilding TCI’s cable plants for the two-way communications required for high-speed connections to the Internet is a costlier proposition. The company said it would spend $1.7 billion to $2.5 billion over the next two and a half years to equip its systems for the transmission of data.

TCI was forced to layoff about 7% of its work force last year after spending soared out of control and rating agencies threatened to downgrade its $14.5 billion in debt.

TCI’s stock has tumbled since last October, although it has started to recover in the last week from its $11-a-share low in recent months. It closed Wednesday at $13.812 a share on Nasdaq, up 18.75 cents. While some of that gain is due to improving financial results announced this week, news on Monday of a breakdown in talks between News Corp. and EchoStar Communications may have helped bump up cable stocks.

The two companies proposed launching a new satellite service by the end of the year that would include local broadcast channels now missing from DirecTV.

While TCI continued to lose subscribers in the first quarter because of rate increases, its cost-cutting efforts are beginning to pay off. Preliminary results released by the company Tuesday showed a 24% jump in cash flow over last year. Cash flow, which is the key measure of cable industry performance, was $701 million.

The company spent $82 million in the first quarter, down from its usual $350 million to $400 million in quarterly spending, according to company executives.