The two largest U.S. cable operators expect slower customer growth in the current quarter across all their products when compared with the first quarter.

Comcast Corp and Time Warner Cable Inc said subscriber growth is slowing in the second quarter and cautioned that the U.S. economy is still not out of woods.

Chief Executive Brian Roberts said at an investor conference on Friday his company has seen a subscriber slowdown across its TV, Internet and phone services partly due to the slower housing market and widespread job losses.

I would conclude there's a lag effect, said Roberts at Bernstein Strategies Decision conference in New York. There are less opportunities to sell new things right now.

Roberts said U.S. consumers appeared to be resetting their expectations.

The U.S. cable TV industry has been hurt by a combination of a weak economy and competition from satellite TV and phone companies.

Time Warner Cable Chief Executive Glenn Britt told investors at a conference that the rate at which it is adding subscribers in the current period is more similar to the weak growth it saw in the December quarter when its additions dropped off significantly.

Though Time Warner Cable's growth recovered last quarter, outperforming analyst expectations, helped by the publicity around a U.S. government mandated digital switch-over which was originally set for February 17. But last month it warned that it had started to see slower customer additions again. Britt said this was still continuing.

He said that it is not yet clear if the New York cable company would see a renewed bounce in the current quarter even though the digital switch has been delayed till June 12.

He said its local advertising sales had stopped getting worse though he added, It really is bad.

Time Warner Cable, which was formally separated from Time Warner Inc in March, borrowed more than $9 billion to help pay out a $10.9 billion dividend to shareholders.

Britt said the company would concentrate on using its growing free cash flow to pay down some of the debt by March to ensure that it retains investment grade status.

If the company achieves its target to reduce the debt to around 3.25 times its earnings before interest, taxes, depreciation and amortization, investors will likely focus on its capital allocation strategy including returning cash to shareholders through a dividend or share buybacks.

If we can't find some great investment to make we should figure out ways to give it back to shareholders, said Britt. But he declined to be comment on his preferred method of returning cash to investors.

(Reporting by Yinka Adegoke; Editing by Derek Caney)

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