Tele-Communications Inc 1996 Presentation to Analysts

Note : I always use true proportions rather than percents , and in ASCII , the APL uses the percent symbol '%' for division .

A most exciting company . The recent merger of BellSouth and Nynex gives them 36 million lines on the east coast ; TCI has cable passing 35 million homes from coast to coast . Cable modems ( asymetric ) currently cost about $350 . ( I expect a much higher number of subscribers than anticipated will want fast uplinks . )

An additional reason for my interest in getting to the TCI meeting is that their Principal Financial Officer , Barney Schotters , was Supply Officer ( the position most responsible for enforcement of the shine of our shoes and gleam of our buckles ) for our Battery , Batallion , and finally , the entire Regiment 30 years ago in highschool at Culver Military Academy on Lake Maxinkuckee Indiana .

 [ This all suffers from my not following TCI on a regular basis , nor
  researching them ( more than looking @ their price history ) before hand ]

  ============================: WED.APR,960417 :============================
@ GrandHyatt | Unusual : 1 maybe 2 other Notebook computers in use |8:14|
 BrendanClouston VP COO | plan to grow by mining assets : hi-speed net into
 35M homes . becoming wrld class integrated delivery system . Pump is primed
 , have money to do .
   Cure is growth |   .12 cash flow  take  over last 6 mo .
     400E3 new custs % yr | 400E3 % 35E6 |>| 0.01
   PrimeStar , sumitrak software - like AA sabre - is deployed
               [ incedentally , Sabre is one of the great APL sucess storys ]
 Dad ref : Kipling : If you can .. | NYTimes : Can TCI leader walk his talk -
 John was in argentina w Fred - has flu .
 Bringing it all home to cust : Teknology - consumers want choice &
  simplicity .  do want pakages | Finaly Govt admitted cannot keep up w Tek .
  1st rule : Bandwidth is not a commodity .
  2nd |   Products & pakages sell  | implys partnering .
  3   | Service - execution -  maintains
    Must be local but w global scale . massive door to door effort to get
  stuff into homes  | took 3.5 min to boot up own computer other day .
   passing breakeven for digital programmers . lowered by 2%3 .
  Driven by creators ~ caretakers .
 What is it ?  Shareholder value -
     drive rev growth - fuels new prod launches | mine value : hidden assets
       Bandwidth is heart :  175 - 200 % home to give 75MB
        modems 300 - 350 :  model returns  4.5%1 cash to invested ROI
        Gov in Hartford CT - supplying foen . 3 of 5 top customer rankings in
        CT :  ~ locked into Sprint to tightly to
        Battle @ FCC is what is discount .
        BruceRavinol - satalite doesnt work - aimed to blast software
       Product : Digitally compressed video | w show @ NCTA
        does ~ require tot rebuild |
        500 $ % home for Sat connect | RBOC  1000 |
        can equip avg to get cost down to  ~ 1.5 $ % mo % cust .
        Highspeed data is huge mkt . Ferarris stuk in grage when home .
        internet .
      Integrated Delivery :
  Hidden Assets : Core National Footprint : Liberty doing well . Tinta ?
  discuss w ChuckWillis : power of terestrial nets .
  Have to have ownership :
|8:45| GaryHoward : worked w UnitedArtistCable -  now PrimeStar :
 NYTimes last wk : abt Sat TV : TCI Sat Entertainment - been acqumulating
  substantial retail Sat assets | old C band mature - Netlink gro 2 x industr
  merger w SuperStar | PrimeStar : 6 x  increase since 94 - 1.2 .600 total
vs
  TCI customers | have enormous head start . outsellling DirectTV 2 x in
  areas where compete | expect tot mkt ~ 10 - 15 E6 custs |
  27-36 " vs 18 " dish .
  EchoStar :  8000 tot custs . 2B $  trading 250K mkt cap % subscirber .
 Primestar has brand name : nothing to buy - ~ 1$%day . / scale economics
  700 sales force - Natnl sales ctr : improved call volume handling : 5 x
  reduced wait time & abandonment %9 | traned telemarketers .15 .2 closes .
  continuous 24hr service contact scheduling .
 Unique partnering - w RadioShack , Bose | w rural computer Cos .
  expect 10- 15 M custs by 2000 .
  CompleteRetailSat Focus     | HiPower Satellite future
  Integrated delivery sys IS valuable .  Digital TV is wanted by cust .
|9:4| Intro BruceRavenel : Internet Svc |9:8|: '76 w Intel , 8086 design
 team , one of 6%12 | Knew would be huge , didnt know wat huge meant : meant
 100B$ % yr mkt | TCI posed w broadband connections to interet : twice in
 life @ right place & time . JohnDoor KlinerPerkins : investor | Started
 Internet co yr ago : @Home : need brightest team . MiloDean ? net archetect
 | TCI Interactive : content provider :
  @Home Busn model : Milo : need to build Wrlds Largest backbone - 30-50M
   local community content . MSO .6 .4 split
   branded browser by Netscape . | plan to ride crest but ~ try to control
   Inet wave . Personalized Multimedia Experience .
 Avg home IN user :     18 + 10 % mo  including 2nd foen .
  ISDN : 60 - 180 |  6Mhz - 30Mb%s  for $35 flat | .1 penetration
  Work@Home Internet@Work , Intrane@work , @School . launching in 3 mkts .
  w have backbone next Q .

|9:22| JerryGaines : Telefony : wireless -wireless wireless catagory is
 exploding | Harvard , ex USWest
  More excited this yr than last . Then showed plans ; now | O&W Wright spent
  3 yrs -><- Ohio KittyHawk public trial - then 3 yrs in OH perfecting in
  barn . They started in `90 so TCI in 6th yr : w have prod sometime this yr
 Opportunity : Wireless w SprintSpecturm 17B$ , WiredBusn : Telenet 35B$
  , wired Residential 45B$ | Stratigy : Brand , pakaging , teknical
  superiority in quality & .25 cost advantage . Natnl Footprint .
 Lines of Busn : The tek does work : cable foen doing 17K calls % day ,
 dramatically better svs .
 why enter wireless ? own licenses for .75 of custs in country . got cheap .
  WDC  > 60K customers in  < 5 mo . most new customers . 1st provider
   full digital svc : can just buy at store & call in to activate . [ neat ]
  Pakagng w Sprint long distance  , getting 50K cust % mo .
 Teleport @ $200mi in revs | providing real choice .
 Wired  residential foen svc :  .5 .5 JVs .
  Residential in ArlingtonHeights IL , CT , & SF Bay area , 1E6 homes passed
  Expand Teleport to 8 mkts | launch SprintSpectrum PCS in 20 to 25 mkts .
  Ex GE w Dr Jack Welch : on Factory automation . no one wants pkgs -
  ' Automate emegrate or evaporate '
|9:41| CamilleJayne : Digital cable TV  market building : Launching :
 Separate men from + in focus grps . intgrated delivery system .
 ' we ain`t sellin  soap ' : from VidalSasson --> America`s Bank .
 brought out 1st pkgd financial prods . Amerimarts . ( yes it is soap )
 Really a science to launch new prouct . Digital TV --> more choice , easier
  surfing , for customer retention need : ' I love this product '
  96Q4 Launch : Dig Svc onscreen guid : can browse while continuing to watch
  same prog . Impulse purchas PPV right from remote . adding 80
  80 + 40 80 |>| 120 160 | f  40 channels   PPV , 40 music .
  Set top box : | Equip avg allows very nominal cost |  beta test Jun1 ,
  allows multiple boxes in 1 house . already have lot of channel capacity
  in place w 7 x  compression | atitudinal segmentation study of why people
  watch TV | VegOut <-> Interact | Sharing <-> Personal | Escape <-> Learning
  | indulgence <-> control | launch Hartford CT Oct30 : 220K homes passed .
|9:59| Brandon : 2nd generation box : simplicity of integrating box w VCR &
 VDisk compression | taking compression from 7 x to 25 x in future ( works
 now ) | Internet brands are being created now .
Break |10:2| |10:17| Brandon : How do you do acnt support for 30M homes .
 FredB? WW dont need IXC investment | return on investment | Head in sky ?
 10-15M
BarryMarshell fast hard & focusd | has & will have best op margins in indus
 100M foen calls % yr ||10:23| : Integrated delivry : what core cable doing
 today : 226K miles  25K people  , 12 M cust , 13k head ends | machine
 3-4 100k (dis)conect orders each mo (?) . Core reliable . expect return to
 traditional .xx growth . JerryGaines . Past regulatory mess | 75K new
 customers so far this yr . same as last several yrs | continue cost
 controled | have more cable systems than anyone else | Major Markets
 w have 5M new customers , 9000 new employees , thru acqs .
 `96 Rate change up in June , ~ nikle & dime . w be comparable to other MSOs
 Secure , technical integrety , signal qual | .3 up to .5 sales of packges
 100k new Star , 1E6 Encore custs | 4hr -> 2 hr window in 2 days timelyness |
 4 regional warehouses - digital boxes , modem etc , instead of 600 locs .
 cost control - w b lowest if ~ already . | Creating new Bandwidth .
|10:38| Dr SadieDecker : ex MartinMarietta | launched rokets | IntegrateDeliv
 Sys : backoffice . be able to sell & support anything . Fiber @ light speed
 BroadBand : Metro areas : Huge rings of unlit fire |
 Transport layer : SummitTrak Internal Delivery Sys Data net : 16 nodes .
 connected to Japan & England . all new in last 3 yrs . largest data net in
 insdustry . file 25 patents . answer any call anywher in US for load
 balancing , customer-centic DB . would be RokStar ME MoonUnit MTV , Thor CA
 King of hill people , thin , 911 ; need to see everything abt Sadie acnt in
 denver . NASA truck dispatch thru Sat . Gary CFO acnting - need to recreate
 GenLedg sys . Live mkt res & ( huge ) data warehouse w customer privacy |
 Wil use SUMMITrak to manage roll out of dig TV |
 MCI friends & family to 6 mo to build . they could do overnight  Prods to
 Mkt FAST . RBOC have Cobal Perfumed Pigs . | they have integrated the best
 of Silicon Val | GPS dispatch out of Greely w NASA tek |
|10:54| BarbaraMowry comp Systs & Software : Ex Airlines `78 : Customer
 Satisfaction : going from 1 to many prods . 10M spare parts flying in
 formation . Ran Milage+ for 9 yrs ( 82 bill versions ) . expected to die in
 6mo . Consulted on integration . New Operating Model : how to be personal w
 20M customers sys will be standard for industry . have 5 story building soon
 to be 60 . Based on customer rather than Co internal structur . Newspaper
 picture request . Powerful Brand deliverd thru another Brand . 100M foen
 calls --> 6-8 ctrs ( virtually 1 ) internal lok box op | Consistant svc qual
 . 1 stop shopping & bill . timely svc | w b able to review & pay bill thru
 set . can offer qual svc to ' hi milage ' subset of custs . 2 ctrs denver
 June ( HQ ) , Boise Dec | Nordstrom : training ( by parents ) | customer
 designed performance metriks .
|11:11| BrandonClousten : Cost ? all on asset side of Bal Sheet . sv hr % tek
 % day |
|11:14| LarryRomrell : Tek Ventures : Mission : devel futur . most what saw
 today was incubated in his grp . aliances w startups . NetScape investment .
 New Teks :  HeadIntoTheSky /NDTC  | @Home idea only 1.5 yrs old .
 continue working  Cable modem interoperability
  Investments  United Video  UVSG ( online guide ) / NetScape
  LightSpan . Academic Systs   / Virtual i-o
|11:20| TonyCoelho : EduTraininCommun w /TCI : 18k schools conneted . 40M$
 invest since `89 | 500 hrs commercial free edu prog % mo . Corp training |
 will offer internatnl . Software pkgs : ' Xchage ' , ' what on earth ' | get
 along w Edu Assocs . wrk w Discovery & TLC | Goal : one stop shopping for
 administrator | w N. Arizona U. 11 of top 25 edu titles w partners . 1) wire
 & telephone in each class rm | access thru cable & PrimeStar . 10k dishes
 free | 300 hrs Educator training | nassp , nea , nsba , other endorsements
 ETC J.C.Sparkman training ctr | Live from Denver : JohnKlugan : 50 mems
 western | 350 educator % mo visit | inside Natnl Dig TV Ctr . 7 foot ball
 fields . 6-10 channels in 6Mhz | Traning & support for ETC prod | handson
 Teacher traning | empower students to take on own edu | Bob Superintendent
 of E long island schools : TCI cable in classrm mag | next training facility
 in WDC open in June . West coast next yr . Investment was made 6 yrs ago .
 Hard for competion to break into relationships .
 Edu intnl div later this yr in 7 countrys ||11:39| Whats Next ? Media Box
 testing switching fabrics to support . Vision & Trak Record of Success
|11:40| Brendan : assume some understanding of Corp Structure . TINTA ,
 Libery Traking stock | fat 10k | Why TCI w grow ? cause . is now .
 last yr growth  | .19 .13  rev cashflow | core > .12   | TimeWarner & they
 took abt 2.5$ increase | > .5 of TCI w b deregulated by next yr | reg w b
 going away | unit growth : 450K last , > 75K sofar this | Sat w grow to >
 than 1B$ invested | Balance | leverage 6%1 @ EoY , coming down . The pumps
 are primed | internet just needs modems . PC mfgrs w put ' Cable Modem
 Inside on boxes ' | Opportunity never brighter | creation of WrldClas OpCo .
|11:53| ?s | FredViara | Pomeroy CredLyonais ? 30Mbit Moto , Lan City 10Mb ,
 Node 1200 home - subdivided into 4 300 home loads | can support @ .1
 penetration | contnention | @home MSO sign ups , ? in conversations w usual
 suspect | modem avail ? Moto w hav > 100k % mo available . dont expect
 bottlenek | when launc h ?  in sunniyvale , pay cust in SF by E o Summer
 HiSpeed end to end | Hi Powered DBS ? stratigy : medium power w GE sat for 4
 - 12 yr w hier wattage for 27" dishes . HiPow long term asset . 11 slots
 aligned w echostar , see way to migrate to Telesat | opportunity in 10s of M
 price for slots hi . now - Rupert would pay more | Tinta Multi B$ asset ,
 Japan cash flow ? Fred : way ahead of proj : 1.3M homes on way to 3 by eoy
 under franchise . Sumitomo | ATT Returns SummiTrak , Education ? Brandon :
 ATT big customer , Teleport hard to compete w . makes lot of noise in WDC to
 use cable local pipes . Sadie : spent much less than RBOCs would like to
 think - small low 10s Mils , Tony : ETC Big industry , Turnkey in Muskogee
 OK , also CorpTrain : CareerTrak . few mo ago brought in intnl ptnrs , Japan
 wants presentation to their Govt | .42 below 450Mhz , when move to 750Mhz ;
 any deconsolidations ? Barry : Bandwidth not real heavy limitation - rural
 areas may just go all digital . most major mkts upgrading by node . most
 stratigic mkts 1st . 3 pieces : large chunk of co > 450 | Fixed Wireless
 moving into rural mkt | what portion of plant w be data ready when ? 2M
 homes ready , 3 major mkts 1M homes this fall , most of Co by next yr |
 Liberty ? value of Stars 3.5 - 4 M subscirbers . great family movie prods .
 already paid for . Board determines fairness : Dauber : look out for Liberty
 shareholders . may move netlink | what might cause complete split of Lib ?
 traking stok . could look at tax free spinoff . Govt has interest , but
 seems sanguine abt Turner go is TimeWarner | Exclusive programming ? Liberty
 to create & sell to everyone
 | SprintSpec integration ? expect to major channel , cross promotions |
 | wireline switching cost ? T1 contact into cheaper switch - save 100 %
  swithc , cost abt ~ 150 % cust , investments in Teleport already done . |
 Dig 2nd boxes ?  3-400 $ % . analog dig hybrid into home . > 1.75 |
 Internet : asymetrical obselesecnce ? most consumer no hi vol web site from
 home , vast majority of employers satisfied w asymetric , no cad cam @ home
 | Sat Price ? more w have to move to PrimeStar model of supplying
  substantial eqip in home . but also enhanced pkg | Cable prices down , now
  going up , subscriber resistance ? dont expect neg impact on growth . Barry
 : most of neg publicity artificially generated , ~ from custs . w b less
 than before | GSM v CDMA ? only GSM equ , CDMA works & is available .
 bigest q : patching w analog bak office . hand sets w be afailable in vol
 needed for forcasts . WDC may have underpriced @ 150 - 200 $ in mkt where
 comp giving away | modem std ?  1st guy MPEG2 is std . GI box | Acq ?
 oportunistic . dont need to buy territory , dont use stock if ~ mk sense |
 What w TCI look like in 3 yrs ? TCI & ptnrs w b largest local foen co .
  Bs & Bs $ | Internet : low speed over , hi speed under hyped
  Sat Dig TV - w sweep TCI quickly . breakevens much lower .
  w have transformed itself . increase moral & everything | Govt w object
  hoarding too much cash like BillGates | Fred : incredible mngt team
  permission to believe | last q : ETC cap intensive , when payback ?
  ~ running new fiber just for schools w/o contract .  X00 $ % chair .
  keeping equip on TCI books . 8 yr leas  | 265 $ % yr % pupil
  being paid up front . what has been missing is training the teacher .
|12:54| Lunch : Xtal Fountan Rest |12:55| [ waited to eat @ Barney`s table :
 Wow , what complex problems they deal with . Very competent Telecom industry
 analysts @ table . Sadie`s SummitTrak done for abt 30E6 $ . Created one
 vertical slis of company ( one node ) then replicate as need more capacity
| Barney called off to press conference  |18,13:58 ]

  ============================ THU.APR,960418 ============================
The ( > 3E6 byte ) 10k choked my Netscape last night . Looked @ 655KB , 170p
 10q;951114 . Enormously complex company intertwined w every player in the
 information business .

       One rather worrysome comparison between the recently merged RBOCs and
       TCI is Revenue  % employee
NYN    |      13306.6  % 65399         |>| 0.2
BEL    |      13791.40 % 72300         |>| 0.19
TCOMA  |       4936    % 32000         |>| 0.15

TCI`s homepage http://www.tcinc.com/ is not very informative about the company itself .

\ Tele Communications Inc ; 303-267-5500 ; 5619 DTC Parkway/Denver CO 80217-5630 ;

| DDT |>| WED.MAY,960501,11:8