Losses at the UK’s second largest cable operator, Telewest Communications Plc, continue to grow and in an effort to save costs, the company has announced an operational review which will make a quarter of its work force redundant. The announcement was made alongside the interim results which show widening losses for the six months to June 30 of 142.7m pounds, up from losses last time of 117.7m pounds with revenue growing 35.9% to 181.4m pounds. Chief Executive Stephen Davidson stated that, with Telewest’s cable network now 70% complete, the company’s losses had peaked and it was time for a shift in emphasis away from network construction and towards sales and customer service. This will mean the loss of some 1,400 jobs at a cost of 5m pounds in redundancy payments, but with an estimated cash saving in salaries of 40m pounds in the first year. In addition, the seven regional franchise areas will be streamlined into four and Telewest plans to concentrate on its core products of telephony and cable TV. The company spent 232m pounds on network expansion in the half and expects to spend the same again before the end of the year, but Davidson was keen to emphasize that all the funding necessary to complete the network was already in place. Telewest claims to have added 91,532 new customers in the period while increasing its penetration in the completed franchise areas to 29% (26%) for telephony services and 22% (21%) for cable TV. Davidson refused to be drawn on how discussions with NTL Inc, its US rival, had progressed following an approach from NTL’s chief executive Barclay Knapp regarding a potential merger.
