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San Antonio Express-News

August 16, 2005 Tuesday


By Sanford Nowlin, Express-News Business Writer

From Lexis Nexis

Grande Communications Inc. -- the San Marcos-based phone, Internet and cable provider -- on Monday said it plans to put less effort into expanding its fiber-optic network and more into marketing to customers in areas it already serves.

Grande's network could serve 25 percent of the homes in Texas markets, including San Antonio and Austin. The company now must strike a "balancing act" between expanding the network into new areas and winning more customers where it already has a presence, interim CEO Scott Ferguson said during a call with reporters and analysts.

SBC Communications Inc. and Time Warner Cable, Grande's main competitors, have launched competitively priced deals to lure away customers. And where Grande once was the only company in Texas offering the "triple play" of phone, Internet and cable, SBC now is breaking into the video business and Time Warner is marketing phone service.

"They're coming back after us, and we need to respond," Ferguson said. "We're no longer the novelty. We're no longer the small kid on the block."

Grande also announced Monday that it incurred a net loss of $12.1 million, or 98 cents per share, on revenues of $49.8 million for the quarter ended June 30, 2005. That compares to a net loss of $12.4 million, or $1.01 per share, on revenues of $45.8 million.

Grande founder and CEO Bill Morrow and President Joe Ross last month stepped down, leaving Ferguson temporarily at the helm. At the time, Ferguson said Grande's board wanted new leadership to "turn this into more of a marketing company."

Since forming in 1999, Grande has raised almost $650 million, including some in publicly traded debt, to build a high-speed telecommunications network and competing with former monopolies like SBC and Time Warner.