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Tuesday, 18 December, 2001, 14:13 GMT
It's hell for NTL
Nick Higham
By media correspondent Nick Higham

The City appears to have given up on Britain's biggest cable company.

Read the business pages of the newspapers and it's clear that NTL, with debts of 12billion-plus, is on the slippery slope.

There are reports that the company is operating at a loss and close to running out of money, thanks to the interest payments on those huge debts.

Its share price in New York, which at one point stood at more than $130, was last week down to less than 70 cents.

Cable laying
Laying cables doesn't come cheap
The only way out of its present crisis is said to be a Eurotunnel-style solution in which the company's banks take it over by swapping their loans for shares.

Cuts

Earlier this month NTL announced plans to lay off 2,000 staff, on top of 6,000 jobs already cut this year.

It has made big cuts in planned spending next year, abandoning expensive efforts to lure new customers with free set-top boxes to concentrate on reducing "churn" by hanging on to the ones it has already.

But reports at the weekend - dismissed by a spokeswoman as "speculation" - say a deal to sell the company's television transmitters, which it acquired when it was first formed from the privatised transmission business of the old Independent Broadcasting Authority, has been held up.

NTL homepage
NTL is trying to keep the customers it has
Such a deal might have produced up to 2 billion in cash to help tide the company over.

Ambition

There are many reasons for NTL's present difficulties.

Excessive ambition, coupled with the very high costs of digging up the nation's streets to lay cable are probably at the heart of it.

The company gobbled up one rival cable operator after another, acquiring their debts in the process, and ending up as a mish-mash of different technical, management and customer service systems.

Significantly the managing director, Stephen Carter, promised to concentrate on improving customer service in an e-mail to all staff.

The memo was promptly leaked to a website called nthellworld.co.uk - and when a company gives rise to a site like this you know it's in trouble.

Low morale

Scrolling through pages and pages of horror stories from disgruntled subscribers on nthellworld.co.uk is an occasionally entertaining, generally depressing reminder that the UK cable industry's notorious levels of customer service don't seem to be getting any better.

nthellworld.co.uk
nthellworld.co.uk's slogan is "Technology maimed"
Contributions from members of NTL's own staff help to explain why - revealing helplessly low morale, which scarcely surprising in the circumstances.

Or they show a frightening "them-and-us" approach to customers whom some staff clearly view as a whingeing enemy to be outwitted wherever possible.

NTL's problems are deep-seated. A take-over by the banks may save the company from the knacker's yard, but it may make things worse for customers, by distracting senior management and choking off funds to expand call centres and improve staff training.

In the long run a merger with rival Telewest looks inevitable.

But if I were Telewest - which has its own (rather smaller) debts and its own problems with customer service - I'd think very hard indeed about adding NTL's troubles to my own.

E-mail: nick.higham@bbc.co.uk

This column also appears in the BBC magazine Ariel

See also:

16 Dec 01 | Business
NTL debt crisis deepens
10 Dec 01 | Business
NTL cuts 2,000 more UK jobs
07 Nov 01 | Business
NTL losses exceed $1bn
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