NTL tones down its grand vision

Barclay Knapp used to want to rule cable. Now he just wants to make money

As befits a man who has taken the company he founded to bankruptcy and back, and lost hundreds of millions of dollars of his own money on the way, Barclay Knapp is becoming cautious in his old age. Speaking before NTL announces its first set of numbers since the cable TV group emerged from US Chapter 11 proceedings, the chief executive is careful where he puts his mouth.

On how the long-standing merger talks with rival Telewest are going, he says: "I can't make any comment about Telewest." On whether this week's figures will show that NTL is stemming the tide of disconnections, or "churn" as it is known in the business, he stonewalls: "This is a financial no fly zone."

But anyone who knows the ebullient American also knows he can't go too long without giving some clues about how things are going.

On Telewest, the word is that NTL, which was always hot for a deal even when its rival was cool, is now dragging its heels. Telewest was due to have finished its financial restructuring by now, but this week when it announces its figures, it will not be able to give a final date. Telewest's latest chief executive, Charles Burdick, still sees merging with NTL as high on his priorities. But Knapp appears to be less keen.

"When you talk about investing, we are going to stick to the eight million homes in our areas," he comments.

Reading between the lines, Knapp is saying: "We have enough on our plate competing with the likes of BT, BSkyB and the BBC in the areas in which we operate. We don't want to double the prob- lem." In other words, sorry, Telewest but the deal is off.

The history of the cable TV industry in the UK is one of broken dreams. The initial awarding of franchises in the late 1980s led to a scramble to build the networks – "strip mining people's gardens" was the phrase used by Knapp in his less guarded days.

This was followed by a land grab when everyone merged with everyone else until there were only three major players:, NTL, Telewest and Cable & Wireless Communications (CWC).

None of them appeared to have the marketing or the service to harm their dominant satellite TV rival BSkyB, but at least NTL looked liked it vaguely knew how to compete. Then it bought CWC in 1999 and everything fell apart.

Customer service, financial performance and NTL's balance sheet were sacrificed for a deal that brought problems which Knapp admits are only just being brought under control.

"In 1999, prior to the CWC acquisition, NTL had a market share of 50 per cent in our areas and came top of a survey for best customer service in the telecoms sector," he says. "We lost our way in marketing and customer service but we are now sorting that out."

Knapp claims NTL no longer sees BSkyB as its competitor because the cable company is in the job of bundling multi-channel TV and telecoms into the best- value package for consumers. What he cannot avoid, however, is that BSkyB is the dominant player in digital TV, that it has linked with BT to sell broadband services, and that the BBC is now offering a cut-price digital TV alternative with Freeview.

Nevertheless, Knapp sees opportunities and not threats in the market. "In our areas, only 40 per cent of homes have digital TV," he says. "That leaves another 60 per cent to go for."

Following the departure of Stephen Carter to telecoms regulator Ofcom, NTL has beefed up its board with a new chairman, the US telecoms veteran James Mooney, and a chief operating officer, Simon Duffy, who recently lost out in the battle to become chief executive of Orange.

Duffy is a finance man who held number-crunching posts at Orange and EMI. So does this mean that keeping costs under control is the number one priority at NTL now?

"The new world order," says Knapp, "is that every business has to be reminded that it is in the business of making money."