Tinta sticks to guns despite retreat by cable giant TCI goes in here

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The Independent Online
TCI International (Tinta), the overseas arm of US cable giant TCI, yesterday vowed to continue its dual strategy of investing in both content and distribution, despite signs the parent company was retreating to its core cable business.

Tinta, which controls pay-television company Flextech and 26 per cent of Telewest, the UK cable operator, "will continue to follow its two lines of businesses in major markets", a spokesperson said.

The commitment came as John Malone, chief executive of TCI, told a US newspaper his multi-track strategy of investing in the Internet, telephones and cable had been too ambitious, over-hyped and impossible to carry out on schedule.

"We were just chasing too many rabbits at the same time," Mr Malone told the Wall Street Journal. Mr Malone, who has seen TCI's share price plummet in recent months following poor results and rising debt, said he would focus his attentions on the cable business, where nearly all TCI's past success has come. The moves marks a postponement of his plans to spend more time with his family.

The growth of direct-to-home satellite services in the US has posed a serious challenge to the cable industry in the past year, and Mr Malone said he would work to accelerate the introduction of digital cable services to meet the competitive threat.

But Tinta, 83 per cent-owned by TCI, said its strategy remained unchanged, despite Mr Malone's comments. "We are run separately, and we have the management in place to achieve our goals," the spokesperson said.

It was also confirmed last night that TCI was proceeding with plans to spin off two subsidiaries - Tinta and Liberty Media - to shareholders, as a further sign of refocusing strategy. Liberty Media groups TCI's programming businesses, including part of its joint-venture investment in Fox Sports, in league with Rupert Murdoch's News Corporation.

Tinta welcomed the news of TCI's spin-off plans last night, saying that it made sense to view the international operations of TCI as a separate entity.

Assuming there are no adverse tax implications, TCI will move this year to spin Tinta off to TCI shareholders, which include several leading US and UK financial institutions. Mr Malone controls about 13 per cent of TCI.

In the UK, Tinta owns 51 per cent of Flextech, the pay-television packager, which recently announced it was negotiating to sign a joint venture with the BBC to launch new pay-television channels. As well, Flextech owns stakes in UK Gold, UK Living, Bravo and other pay-TV channels. Overseas, Tinta is also active in Argentina, Chile and Japan.

Tinta's main distribution investment in the UK is the large stake in Telewest, which was recently pushed into second position in the UK cable market by Cable & Wireless Communications, the newly formed UK leader.

Telewest is taking the lead to introduce a digital service by the end of the year, featuring hundreds of channels of programming and pay-per- view films and sport and Internet connections.Telewest is also understood to be in negotiations with at least two cable operators, Comcast and General Cable, about taking them over, in a further indication that Tina's content and distribution strategy remains unaffected by Mr Malone's retrenchment in the US.

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