Will Lewis Return to C&W?
This morning's London Times says Lewis's defection from the nascent board of U.K. cable provider NTL Inc. (Nasdaq Europe: NTLI) clears the decks for him to tackle the C&W job, which is open.
A C&W spokesman says the carrier won't comment on the article, which he labels "total speculation." But he acknowledges the carrier has been on the lookout for a new chairman. A management shakeup took place throughout top ranks last month (see C&W Shuffles Managers).
At press time, we were still waiting to hear from Lewis himself. But given his unpredictable track record, it seems as likely that he's gotten cold feet about the U.K. cable scene as that he's decided to return to his alma mater.
Lewis, whose failure to show at Lightspeed Europe 2002 last month launched speculation about his doings (see Former Ebone Chief Resurfaces), resigned from a post that NTL had been reserving for him on the board of its restructured company, which is expected to emerge "sometime very soon," according to a spokeswoman. NTL's statement, part of a restructuring update issued over the Christmas holidays, said that Lewis resigned "for personal reasons." (See NTL Publishes Prospectus.)
But there's plenty in the NTL story that might make Lewis want to bolt. The company filed for creditor protection in May 2002 (see NTL Files Chapter 11), and even though it's reorganized its finances under the auspices of a creditor committee, CEO Barclay Knapp has been criticized by British press and analysts for holding too much power, which some say may have put off Lewis.
NTL plans to recruit a new chairman, post-restructuring, but he will be picked from the existing board -- a board that includes Knapp.
NTL's also been served with a suit for $11.4 million in unpaid fees by Morgan Stanley, and the cable operator says it's considering a counteraction.
Factors like these may or may not have helped Lewis's decision, but at least one analyst points to the sorry state of cable operators in Europe, which may have boosted things as well. Indeed, NTL's woes are just one of a sad chorus, evidenced by a rash of restructurings, such as that of Telewest Communications Networks plc (Nasdaq: TWSTY), which was spoken of in the past as a possible buyer of NTL (see Telewest).
"Cable operators must change their approach, give up the idea that they're in a growth business, and stick to generating cash flow," says Lior Jassur, who heads up high-yield research for Dresdner Kleinwort Wasserstein in Europe.
"They shouldn't spend any more money on broadband Internet connectivity or Internet telephony," Jassur says. It's not working -- penetration of broadband services like cable telephony and Internet is low, competition from incumbent providers is tough, and the push for subscribers in those areas forces the operators to increase capital outlays while lowering margins on their bread-and-butter cable TV service.
Bolstering Jassur's view, a key investor in European cable, Liberty Media Corp. (NYSE: LMG), announced December 30 that it has sold 5 percent of its former 25 percent interest in Telewest to private investor Bill Brennan, along with stakes in Chorus Communications and UnitedGlobalCom Inc.
Back to Lewis. If he's soured on cable companies, Jassur's not sure that means he's eager to run back to C&W. "Cable & Wireless is basically a basket case. Having come from there... I'm not sure if this is a company he'd want to be in... It's more of a job for a corporate restructuring expert, not an operations person."
Lewis also has another job that may not fit well with leading a major U.K. carrier on the comeback trail: He's popped up on another board, having been picked as one of the Supervisory Directors of alternative French carrier CompleTel.
Still, given Lewis's penchant for hide-and-seek with media appearances and telecom boards, anything's possible. We're hoping to hear from him. Stay tuned.
— Mary Jander, Senior Editor, Light Reading