Michels denies row caused Telewest exit

Alan Michels, who abruptly left his job as chief executive at Telewest Communications this week, denied there had been a boardroom bust- up. He conceded, however, that "it is always difficult when you have different corporate shareholders with different views".

In his first interview since confirming he would return to the US with his family, Mr Michels said: "I certainly have a respect for the board. But relations are always a challenge for corporate shareholders and the chief executive."

Telewest is jointly controlled by US telecoms company US West and TCI, the giant media company controlled by John Malone. The two have not always agreed about strategy, and had differing views about Mr Michels' stewardship.

Mr Michels, credited with seeing through the Telewest flotation in 1994 and the merger with SBC Cablecomms last year, was one of the industry's best-known executives. His departure surprised industry observers, who had expected him to remain in place for the rest of his three-year contract.

But there has been growing impatience among the sector's largely American owners about the poor level of penetration, particularly of cable television.

Mr Michels last night had some advice for his successor, Stephen Davidson, regarding Telewest's future growth. "It needs as much telephony as it can get," he said. "This is a very big market, and there is a lot of market share there to get."

But just selling telecoms services will not be enough, Mr Michels said. "The industry has to be creative in its packaging with cable, telephony, the Internet, Sega games channel - and the packages must be easy to use."

Crucially, cable needs to make "a bet" on programming to ensure it can offer content that is not available elsewhere.

Ironically, Telewest signed a long-term supply arrangement with BSkyB, Rupert Murdoch's cable and satellite broadcaster, which effectively ended attempts by cable operators to develop programming to compete with BSkyB.

Mr Michels said that pay-per-view rights, particularly for Hollywood films, should be bought by the cable operators acting together.

If the industry gets its product right, it can finally start to develop a sizeable market in the UK. "Telewest has 4.3 million homes in its franchise areas, and passes two million of them already. Of these, 700,000 are customers. We must build that further."

He added that the penetration of business customers - at just 17,000 of a possible 360,000 - shows there is "a vast opportunity ahead of the company".

Telewest plans to start Internet services later this year, and to introduce digital cable television as soon as BSkyB launches its digital satellite service, by the end of 1997 or early in 1998.