Look aiming to re-launch sales, marketing activities with revamped TV lineup

Cash-strapped Look Communications Inc. has proposed a new business plan to emerge from bankruptcy protection that includes a re-launch early in 2002 of its wireless cable television service. Perhaps the biggest change will see Look repackage its channel offering in an attempt to increase average revenue per household, which could mean a move away from the company’s central "pick and pay" packaging approach. On Nov. 14, Look announced preliminary details of its proposed new business plan once it emerges from court protection under the Companies’ Creditors Arrangement Act. It also disclosed that it had obtained an extension of the period under which it can operate under the CCAA until December 31, 2001. Craig’s B.C. plans on holdAs Look struggles to get its house in order, Craig Wireless International Inc. still has not moved forward on plans to roll out a wireless cable system in British Columbia. In August, the company told CCR that its SkyCable Pacific Inc. subsidiary would launch in Vancouver in November (CCR, Aug. 15/01), and a news release issued by the company shortly thereafter pegged October as the launch target. According to Decima Publishing’s report on the digital TV market, The Digital Domain, SkyCable currently has no plans to launch any of the new digital specialty channels. The wireless cableco’s subscriber base has remained stable at about 7,500 as of September 30. SkyCable had previously made wireless cable services a priority and the majority of its customers are television subscribers. But it has indicated that it is focusing on the high-speed Internet access business, where the margins are greater. While its cable plans appear to be on hold in the British Columbia market, Craig Wireless announced on Dec. 3 that it would build a 3G (next generation) broadband wireless Internet network in Vancouver. A roll out of the high-speed wireless Internet service to business and residential customers is expected by the second quarter of 2002.Besides repackaging its TV offering, Look is also looking at adding new digital specialty services to its channel lineup. It has already launched Leafs TV and Raptors NBA TV on a trial basis in southern Ontario, and a free preview is being offered until January 2002. It is negotiating carriage with other digital services and has been surveying its subscribers online on their diginet preferences. Under the new business plan, Look plans to grow its TV customer base in multiple unit dwellings (MUDs) and selected residential areas. It plans to focus on MUDs in the Toronto and Montreal markets, where it has the infrastructure, according to Alex Radmonavic of Pelican Communications, which has been hired to speak on Look’s behalf. Look says its business plan involves not only growing its digital television customer base, but also pumping up all business segment products, including DSL access and domain registration, retaining the small office home office (SOHO) and residential dial-up customer, and converting customers to high-speed access. Look had 74,000 digital television subscribers at the end of its 2001 fiscal third quarter ended September 30, compared with 79,300 at June 30. It was the third straight quarterly decline in TV subscribers. "The decline in the customer base reflects mainly normal churn that has not been offset by new customer activations due to a lack of investment in sales and marketing since December 2000," Look states in a Nov. 28 statement announcing its third-quarter financial results. Adds Radmonavic: "They’ve got to stop the erosion of the subscriber base and it’s pretty hard to do that when you have just bad news coming out." Look’s plan hedges on generating funds internally and leveraging the value of its wireless network and Internet Protocol backbone. The plan also involves a corporate restructuring in which Look’s creditors will become the largest shareholders in the company. Existing shareholders will be left "with a stake in the future growth of the company." The ownership stakes of Look’s two largest creditors – BCE Inc. and Telesystem Ltd. – will increase to a combined 70 per cent. Currently, BCE owns 25.9 per cent and Telesystem Ltd. 11 per cent for a combined total of 36.9 per cent. But Radmonavic says the two shareholders have given the company free rein over Look’s business plan, noting that they have agreed to vote with management on any issues that come before shareholders. When BCE and Telesystem took over Look’s $200-million debt from banks in September, they agreed not to provide further financing to the company for the next two years. So while Look will be able to move forward with significantly less debt, it still has to generate sufficient capital to move ahead with its business plan, which goes before creditors for approval at a Dec. 14 meeting in Toronto.

Look aiming to re-launch sales, marketing activities with revamped TV lineup

Broadcast | December 6, 2001

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