Upgrading cable systems just begins with planting more wires in the ground. Training the people who deliver and maintain new digital services is easily a bigger investment.
Comcast is spending $654,000 on training 1,000 system managers alone. These folks hail from 75 systems in 23 states, and Comcast flies them into Philadelphia, puts them up for two days, and brings in the senior executives to outline the company's values and strategy.
With roughly 2,000 new digital television customers and 500 high-speed data customers per day, "we need people pulling in the same direction," says Rich Petrino, dean of Comcast University, the division at headquarters where the training is held. Because of acquisitions and swaps, "many of the people who will be coming through here aren't even with the company yet. Thirty percent of the company will be new in the course of this program."
About 50 managers and vice presidents are brought in for each session of the Spirit of Comcast program. They're briefed on the Comcast method of operation, and the company's mantra is instilled: customer service, customer service, customer service.
"It used to be that customers had few options if they wanted more than five channels," Steve Burke, president of Comcast's cable division, tells a classroom full of system executives. Now overbuilders and satellite operators are staking claims.
Expect 50% of systems to be overbuilt within five years, he warns. "That's the first given. The second given is that we'll have more new products: digital TV, high-speed data, telephony, video-on-demand, interactive TV. The sky's the limit."
New products will be cable's bread and butter down the road, he tells them; they're the reason the industry is spending billions to upgrade systems. Digital television is rolling along nicely; Comcast expects to have 1 million digital subscribers by year-end, or double what it has now.
The high-speed data, or Internet service rollout, is a little stickier: @Home customers constitute about 4% of Comcast's customers but generate about 60% of complaints. "But these are $100-plus subscribers," Burke points out. And once they go DSL, they never go back: "If they have DSL, they don't need a cable modem."
Comcast expects to hire 1,000 new employees by the end of the year just to support @Home. The 15,000-employee company currently has 928 job openings.
This story is repeated at cable systems across the board. New services are catching on like wildfire, and companies are scrambling to hire people to install and maintain them. AT & T is signing up new digital customers at a rate of 3,000 per day, Internet customers at 1,000 a day and new cable phone customers at 500 per day.
At Cox, the rates are about 1,100 new digital and 700-plus new Internet customers per day. MediaOne's first-quarter daily sign-up rate was about 570 digital, 640 for Internet and more than 300 for cable telephony.
Each of those installations takes 1 to 1 1/2 hours, which means that AT & T needs 560 to 840 people working eight hours a day seven days a week, not counting travel and bathroom breaks, just for new installations.
Says Insight Communications chief operating officer Kim Kelly, "There's so much going on, it becomes a general resource issue." Insight is the eighth-largest cable operator in the country but, at 1.4 million total subscribers, is still small compared with, say, AT & T at 16.4 million. Unlike most MSOs its size, Insight is aggressively launching video-on-demand and interactive digital service right out of the gate and intends to roll out cable telephony with AT & T at the end of the year. Interactive is the priority now. Approximately 40,000 of Insight's 109,000 digital subscribers have interactive service. The year-end target is 140,000. That's 370 installations every day for the rest of the year, which translates into 370 to 555 worker-hours a day, or 46 to 70 people.
"We're operating in markets with very low unemployment," Kelly notes. "Our No. 1 issue this year is employment and training."
Insight is using contractors for analog installations and retraining its own technicians for the interactive installs. "We have two interactive programs in the field already," Kelly says. "As for digital and high-speed access, it's a matter of finding the time. People working don't necessarily have the time to be taken out of the field to be trained."
MediaOne, forging ahead in the shadow of AT & T's bid to swallow it, expects to hire 3,200 people by the end of the year, excluding attrition. Of those, 90% are "front-line jobs" supporting new services, according to Executive Director for Staffing Debbie Davis. Of MediaOne's 12,500 employees, 80% work on the front lines. "We don't like to call them entry-level jobs because they're the first face to the customer," she explains. "We prefer to call them our front-line positions."
MediaOne is very conscious of first impressions. Technicians and customer service representatives go through an eight-week training course. The customer service reps-those taking orders, queries and complaints over the phone-then go through a "two-week nesting period when they're mentored," Davis says.
MediaOne recruits from vocational schools, the military and other call centers and, most successfully, through an employee referral program. Wages for front-line jobs vary depending on the market, but average is about $10 per hour, as with most cable companies.
In addition to full benefits, MediaOne gives new employees stock options plus an immediately vested 401(k) plan, to which the company matches up to 6% of the employee's salary. Employees get a bonus of 5% of their salaries if they meet certain performance levels.
"Once we find people," Davis says, "it's not difficult to keep them."
First faces are crucial not only to fend off competition but also to retain some semblance of trust from customers. As Comcast's Burke points out at the Spirit of Comcast session, "One-third of all cable systems in the country have been traded or sold in the last 18 months. Twenty million subscribers have a new cable company."
At the end of his lecture, the managers grill him about Comcast's plan to market new services, buy more systems and roll out telephony, as well as about what's happening with open access. Burke evades none of it. Everyone leaves the session knowing that there is a strategy here and that it does make sense, Services will be rolled out one at a time, not dumped on everybody at once.
So what does Comcast get for its $654,000 investment?
"Anecdotally, people in the field are appreciative," Petrino says, "but Ralph Roberts [the company's no-nonsense founder] says, Find a way to measure the impact. 'We've already seen a 6% reduction in the cost of installations. That's not specifically attributable to the Spirit of Comcast program, but it is an overall improvement, and we like to point it out."