While WideOpenWest’s $309 million IPO came up about $90 million short of its target, CEO Steven Cochran believes it was ultimately a success.
Unshackled from its balance sheet, the Englewood, Colorado cable operator will now be able to catch up on network infrastructure investment and participate in what is now the good life for small to mid-sized publicly traded cable companies—solid growth of residential high-speed internet and business services, conservative video programming strategy and possible acquisition by a giant like Altice.
The accessible Cochran is a 15-year WOW! veteran who has ridden through the company’s growth into the nation’s sixth-biggest cable operator, as well as its bump in the road when it acquired a bit too much debt several years ago. He gave FierceCable a solid half hour of phone time last week. Here’s what we discussed.
FierceCable: It’s a good time to be a debt-free cable operator on Wall Street, yes?
Steven Cochran: There’s now a much greater appreciation for the value of networks. For a period of time, it felt like programmers ran the business. We were just their distributors. But the need for internet has become so much more relevant and prolific. And the network has become so much more valuable.
FC: How is WOW! going to use its $309 million from the IPO?
Cochran: It started a few years ago when we acquired Knology [for $750 million]. We ended up with a really expensive capital structure. The IPO allows us to completely pay off the high-priced bonds we had and get back into free cash mode. We can make investments in our network again.
FC: Some have spun the IPO as a disappointment, given that you didn’t hit the $400 million target. But you don’t see it that way?
Cochran: We were disappointed it didn’t price as high as we hoped. But the most important thing is that the deal got done and improve our balance sheet.
FC: So now that you’re free, what are you going to do first?
Cochran: We have two major projects outside of the normal capex needed to improve our speeds and reliability. We’re going ‘edge out’ and move into the next community over. In the majority of the markets we service, we don’t cover the entire DMA. We also have a fiber-to-the-tower build we’re doing in Chicago. We’re building 1,500 miles of dark fiber there. There’s lots of opportunities in the commercial space, lots of opportunities to expand.
FC: Are you going to enter the 1-gig gold rush?
Cochran: We offer 1-gig service in about 15% of our footprint, but we want to advertise something people want to buy. If you’re offering 1 gig at $120-$150 a month, not many people are going to buy it. Even in markets where 1 gig is offered for $100, take rates are not worth expanding capital vs. expanding our footprint. We’re very focused on what the customer wants as oppose to what we think the customer should do.
FC: You guys are favoring DOCSIS 3.1 over fiber, correct?
Cochran: We’re very bullish on DOCSIS 3.1. It’s got a long life ahead of it, and we feel the amount of investment we can make makes more sense than fiber to the home.
FC: How does WOW! see video? Still a business?
Cochran: We’re probably not as negative on video as other cable companies around our size. We still think there’s a lot of customers who want to bundle their video with data. In fact, 60% of our customers take video. There’s still value to us, and value to the customer. But we don’t look at video as a growth mechanism.
FC: So are you ready to get purchased by Altice?
Cochran: I don't think we’d ever run the business that way. There’s definitely a lot of consolidators out there right now. But we run our business because we think we have a great growth platform. We’re just really excited to have the IPO behind us. After 11 years, to go from really strong growth, to four years where we had to fight our way out of a hole, it’s just great to be in growth mode again.