& cplSiteName &

TW Cable Sizes Up Google Fiber Threat

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
9/14/2012
50%
50%

Welcome to the broadband and cable news roundup, T.G.I.F. edition.

  • Time Warner Cable Inc. (NYSE: TWC) is taking Google Fiber's foray in the Kansas Cities seriously, but TW Cable's CFO Irene Esteves says Google (Nasdaq: GOOG)'s 1Gbit/s and TV service bundle doesn't pose a huge threat to the cable operator's overall business. Of the 300,000 homes that Google Fiber is expected to pass in the area eventually, Esteves estimates that TW Cable has 100,000 Internet and 100,000 video subs. "We're talking about less than 1 percent of our [national] subs at risk of this eighth competitor coming in," Esteves said Thursday at a Bank of America/Merrill Lynch investors conference. Among the other competitors in the Kansas cities market are DirecTV Group Inc. (NYSE: DTV), Dish Network LLC (Nasdaq: DISH), AT&T Inc. (NYSE: T) and SureWest Communications (Nasdaq: SURW). Esteves thinks the Google threat will remain localized. "We can't imagine an economic model that makes sense for them to expand it beyond this Kansas City experiment," she said. Also on Thursday, Google revealed its construction plan for "fiberhoods" that qualified during the first round of buildouts. (See KC Gets Google Fiber for Real in October.)

  • Meanwhile, it's still early days for IntelligentHome, TW Cable's home security and monitoring product. Esteves said the MSO has about 9,000 IntelligentHome subscribers, with the average revenue per user running in the range of US$33 to $40, depending on the level of service. As rollouts expand and more customers sign up, she said she expects profits to fall between what TW Cable gets today with video and cable modem services. (See Will Service Providers Steal ADT's Customers?)

  • Nintendo of America Inc. set Nov. 18 as the launch date for the Wii U, a $299.99 HD-capable console that will support Netflix Inc. (Nasdaq: NFLX), Hulu LLC and other usual over-the-top video suspects. The device looks to be an obvious one for cable operators to target with TV Everywhere apps. Among the more interesting aspects is the Wii U GamePad, a tablet-like device that supports an app called TVii, which turns the device into a fancy remote control and a guide to help users navigate pay-TV services. Nintendo said the new platform is also integrated with TiVo Inc. (Nasdaq: TIVO) DVRs.

  • Mexico's Megacable Comunicaciones is in talks with TW Cable about forming a strategic phone alliance that would let TWC's customers receive calls from Megacable customers without incurring long-distance charges, reports Reuters. Megacable CEO Enrique Yamuni stressed that the discussions were still in the exploratory stage.

  • The Society of Cable Telecommunications Engineers (SCTE) revealed more details about next month's Cable-Tec Expo in Orlando, announcing an all-women technology panel on Wednesday, Oct. 17 that will feature: Bright House Networks President Nomi Bergman; Comcast Corp. (Nasdaq: CMCSA, CMCSK) SVP of infrastructure and operations Charlotte Field; TW Cable EVP, East Region, Carol Hevey; and Cablevision Systems Corp. (NYSE: CVC) EVP, Engineering and Technology, Yvette Kanouff. Industry analyst and Multichannel News columnist Leslie Ellis will moderate.

    — Jeff Baumgartner, Site Editor, Light Reading Cable



    (8)  | 
    Comment  | 
    Print  | 
  • Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
    craigleddy
    50%
    50%
    craigleddy,
    User Rank: Blogger
    12/5/2012 | 5:21:02 PM
    re: TW Cable Sizes Up Google Fiber Threat


    Regarding TWC's IntelligentHome, we recently released a Heavy Reading Cable Insider on cable's smart home services that noted, "MSOs are asking customers to pay about $30 to $50 per month plus an installation fee amid a down economy and uncertain consumer demand for home automation."


    Selling these services is a challenge given what the MSOs are charging. The MSOs appear to be betting that they can start with a price in the $30 to $50/month range and, even if the uptake is low, the margins are fantastic. But then you have to wonder at what point will they need to either lower prices, bundle in the services or add other sweetners to keep penetration rolling.


    Would you pay $30-50 a month for home security and automation services from your cable provider?     


     

    Jeff Baumgartner
    50%
    50%
    Jeff Baumgartner,
    User Rank: Light Beer
    12/5/2012 | 5:21:02 PM
    re: TW Cable Sizes Up Google Fiber Threat


    Even if it takes time to scale these signups, it would seem to be a good product category for the cable guys to get into just for the retention factor alone.  Once a sub adds that to a bundle, how much more difficult will it be for that sub to churn out?


    But achieving subscriber scale is going to remain a challenge, which is why I think we're hearing rumors that Comcast and perhaps Verizon might be interested in buying ADT's North American residential home security business when Tyco spins it out. JB

    craigleddy
    50%
    50%
    craigleddy,
    User Rank: Blogger
    12/5/2012 | 5:21:00 PM
    re: TW Cable Sizes Up Google Fiber Threat


    Yea, I could see Comcast going after ADT, perhaps with other MSOs in tow. As you've pointed out previoulsy, there's a connection between ADT CEO Ed Breen and Comcast.


    In 2001, MSOs banded together behind the Security Broadband venture that wasn't ready for primetime. Also I recall some folks on the cable financial side explored the potential for rolling up a bunch of the smaller home security companies, with the possibility of getting cable companies involved. But those waves of excitement subsided and now we've got the latest wave.   


     


     

    AESerm
    50%
    50%
    AESerm,
    User Rank: Light Beer
    12/5/2012 | 5:20:59 PM
    re: TW Cable Sizes Up Google Fiber Threat


    That rev number $33-$40 sounds about where ADT is with its $9/week promo. What's the TWC value prop again?

    craigleddy
    50%
    50%
    craigleddy,
    User Rank: Blogger
    12/5/2012 | 5:20:58 PM
    re: TW Cable Sizes Up Google Fiber Threat


    The value prop for TWC and the other MSOs is that this is more than just your usual home security service. It's all tied in with broadband so you can use detection devices and those little spy cameras to monitor your property on various connected devices. Plus you can remotely control your thermostat and lights and do other "smart home" stuff.


    However -- and it's a big however -- the more you start going beyond security and getting into home automation, the more expensive the package and you might have to purchase additional equipment. It can add up pretty fast.            

    victorblake
    50%
    50%
    victorblake,
    User Rank: Lightning
    12/5/2012 | 5:20:53 PM
    re: TW Cable Sizes Up Google Fiber Threat


    According to Time Warner Cable's web site,


    "Irene M. Esteves is Executive Vice President and Chief Financial Officer of Time Warner Cable since July 2011."


    Irene Esteves is the CFO, not the CTO. The article say "CTO."

    Jeff Baumgartner
    50%
    50%
    Jeff Baumgartner,
    User Rank: Light Beer
    12/5/2012 | 5:20:53 PM
    re: TW Cable Sizes Up Google Fiber Threat


    Thanks, that was a typo. It's been changed to CFO. JB

    patentchoi
    50%
    50%
    patentchoi,
    User Rank: Light Beer
    12/5/2012 | 5:20:53 PM
    re: TW Cable Sizes Up Google Fiber Threat


    The key as Esteves is the economic model. However the standard economic model may not be straightforward to apply if google can offer services in an enhanced manner or enhance their ad-monetization. Also google has deep pockets to challenge any standard models. 


    Goog tried their hand at public wifi but that has not expanded its toeprint. They could be doing this to be on the good side of carriers that push android. On the wireline side they do not have such restrictions, but it will be a business relationship challenge to move this to a larger footprint.

    Educational Resources
    sponsor supplied content
    Educational Resources Archive
    From The Founder
    Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
    Flash Poll
    Live Streaming Video
    Charting the CSP's Future
    Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
    LRTV Interviews
    BT's McRae Sheds Light on 4K Strategy

    5|25|17   |   4:45   |   (0) comments


    At Light Reading's Big Communications Event 2017 in Austin, Texas, BT Group's Chief Network Architect Neil McRae talks about what it took for BT to broadcast live sports in 4K. Catch up with all our BCE coverage at http://www.lightreading.com/bce.asp.
    From the Founder
    How the NIA Aims to Advance NFV

    5|25|17   |   08:07   |   (0) comments


    Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
    LRTV Custom TV
    Better Solutions That Address Growing Scale

    5|25|17   |     |   (0) comments


    For Comcast, the X1 rollout and 17-fold increases in broadband speeds in the past 16 years are among factors driving the need for Energy 2020 solutions that reduce cost and consumption, says Mark Hess.
    LRTV Custom TV
    Ethernity Network Delivers Instant Offloading of Network Functions With All-Programmable Intelligent NIC

    5|25|17   |     |   (0) comments


    David Levi, CEO of Ethernity Networks, explains that programmability of the hardware makes the company's All-Programmable Intelligent NIC uniquely beneficial for communications service providers that need advanced data appliances with agile support of virtualization. Utilizing the company's patented network processing technology, Ethernity offers data path ...
    LRTV Documentaries
    BCE 2017: Vodafone Gets Obsessed With Cloud-Native

    5|25|17   |     |   (0) comments


    Vodafone's Matt Beal updates us on Project Ocean and explains why simple virtualization isn't enough of a goal for network transformation. Catch up with other BCE 2017 keynotes and news at http://www.lightreading.com/bce.asp.
    LRTV Documentaries
    BCE 2017: Intel's Take on Network Transformation

    5|24|17   |     |   (0) comments


    In this BCE 2017 keynote, Lynn Comp discusses Intel's vision for areas such as analytics, automation and service assurance. For more videos and BCE coverage, see http://www.lightreading.com/bce.asp.
    LRTV Documentaries
    Order From Chaos: The Steve Saunders BCE Keynote

    5|24|17   |   17:27   |   (0) comments


    Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability testing.
    Think of this as the video sequel to the recent columns he's written about NFV and the prospect of a telecom app store. (See

    LRTV Documentaries
    Service Provider Panel: Partnering in the Digital Era

    5|22|17   |     |   (0) comments


    Coopetition has always been part of telecom, but the ecosphere now includes data centers, vendors, apps developers, cloud service providers and Internet content providers. This BCE 2017 panel explores the new attitudes among network operators as to the value and variety of ...
    LRTV Interviews
    Site Demo: AT&T's IoT Flow Platform

    5|19|17   |   04:25   |   (0) comments


    At AT&T's R&D center in Tel Aviv, Israel, project leader Eyal Segev talks about the operator's Flow platform and how it helps to prototype IoT applications.
    LRTV Documentaries
    Agent of Change: A Q&A With AT&T's John Donovan

    5|18|17   |     |   (0) comments


    Carol Wilson talks with the man leading AT&T's transformation efforts about the challenge of change.
    LRTV Documentaries
    BCE Service Provider Panel: The New Business Realities

    5|18|17   |     |   (0) comments


    For virtualization to happen, the telecom industry first has to grapple with key functional aspects of SDN and NFV that need to be universal, such as onboarding of virtualized network functions and federation of software-defined networks.
    LRTV Interviews
    BCE Service Provider Keynote: CenturyLink

    5|16|17   |   22:32   |   (0) comments


    Aamir Hussain leads the Product Development and Technology organization at CenturyLink, which includes the company's information technology function. He is an experienced senior technology executive with more than 25 years of proven success in the implementation of global technology operations, operationalization of complex technology, infrastructures and business ...
    Infographics
    With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
    Hot Topics
    Cities Clamor for More Clout at FCC
    Mari Silbey, Senior Editor, Cable/Video, 5/23/2017
    What's Blocking 4K TV Today
    Alan Breznick, Cable/Video Practice Leader, Light Reading, 5/22/2017
    Sonus & Genband Finally Combine to Form $745M Company
    Dan Jones, Mobile Editor, 5/23/2017
    Apple Looking to Cook 5G Test Devices
    Dan Jones, Mobile Editor, 5/24/2017
    Fright Wigs & Cocktails: BCE 2017 in Pics
    Mitch Wagner, Editor, Enterprise Cloud, 5/19/2017
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
    TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
    Animals with Phones
    What Brogrammers Look Like to the Rest of Us Click Here
    Live Digital Audio

    Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.