Light Reading
Also: 9,000 subs for TWC's IntelligentHome; new Nintendo console has bigger TV ambitions; Mexico's Megacable seeks US cable phone ally

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
    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.

    Flash Poll
    From The Founder
    It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
    LRTV Custom TV
    Using Service Quality to Drive WiFi Monetization

    10|22|14   |   6:51   |   (0) comments


    Live from the SCTE conference: Heavy Reading's Alan Breznick explores the forces shaping the WiFi opportunity in an interview with CableLabs' Justin Colwell and Amdocs' Ken Roulier.
    LRTV Custom TV
    Distributed Access Architectures – 2

    10|21|14   |   8:51:00 AM   |   (0) comments


    ARRIS CTO Network Solutions Tom Cloonan discusses why many if not most MSOs will continue with integrated CCAP, while addressing why some are also looking at two futuristic, distributed access architectures: Remote PHY and Remote CCAP.
    LRTV Custom TV
    Distributed Access Architectures – 1

    10|21|14   |   9:01   |   (0) comments


    SCTE Sr. Director of Engineering Dean Stoneback discusses the pros and cons of distributed access architecture (DAA) and its various forms, which range from basic Remote PHY to full CMTS functionality in the node.
    LRTV Custom TV
    The WiFi Road to Riches – 2

    10|21|14   |   3:58   |   (0) comments


    ARRIS Senior Solution Architect Eli Baruch talks about how MSOs can enable public and community WiFi through 1) outdoor access points, 2) businesses seeking to offer WiFi to customers, and 3) residential WiFi gateway extensions.
    LRTV Custom TV
    The WiFi Road to Riches – 1

    10|21|14   |   10:15   |   (0) comments


    SCTE Director of Advanced Technologies Steve Harris discusses WiFi deployments, drivers, challenges and advances, including 802.11ac, carrier-grade WiFi, community WiFi, Hotspot 2.0, Passpoint, WiFi-First and voice-over-WiFi.
    LRTV Custom TV
    Advantech Accelerates 100G Traffic Handling

    10|17|14   |   7:56   |   (0) comments


    Paul Stevens from Advantech explains why handling 100GbE needs a whole new platform design approach and how Advantech is addressing the needs of equipment providers and carriers to give them the flexibility and performance they will need for SDN and NFV deployment.
    LRTV Huawei Video Resource Center
    Holland's Imtech Traffic & Infra Discusses Huawei's ICT Solution and Services

    10|16|14   |   4:49   |   (0) comments


    Dimitry Theebe is from the business unit at Imtech Traffic & Infra which delivers communications solutions for transportations. His partnershp with Huawei began about a years ago. In this video, Theebe speaks more about this partnership and what he hopes to accomplish with Huawei.
    LRTV Huawei Video Resource Center
    Huawei's Comprehensive Storage Solutions Vital for SVR

    10|16|14   |   6:16   |   (0) comments


    SVR Information Technology provides cloud services for academic and special sectors. With Huawei's support, SVR and Yildiz Technical University has established Turkey's largest and most advanced High Performance Computing system. CSO Ismail Cem Aslan talks about what he hopes Huawei's OceanStor storage system will bring for him.
    LRTV Huawei Video Resource Center
    Mexico's Servitron's Impression of Huawei at CCW 2014

    10|16|14   |   6:35   |   (0) comments


    Servitron is a network operator in Mexico that has been in the trunking industry for the past 20 years. Its COO, Ing. Ragnar Trillo O., explains at Critical Communications World 2014 that his company has been interested in the long-term evolution of LTE technology and its adoption for TETRA.
    LRTV Huawei Video Resource Center
    Building a Better Dubai

    10|16|14   |   2:06   |   (0) comments


    Abdulla Ahmed Al Falasi is the director of commercial affairs, a telecommunications coordinator for the government of Dubai. Their areas of service span across multiple industries, including police, safety, shopping malls and more. In this video, Abdulla talks about his department's work with Huawei.
    LRTV Huawei Video Resource Center
    Huawei Lights Up Malaysia Partner Maju Nusa

    10|16|14   |   1:59   |   (0) comments


    Malaysia's Maju Nusa is an enterprise partner to Huawei in networking, route switches and telco equipment. At this year's Critical Communications World in Singapore, CTO Pushpender Singh talks about what Huawei's eLTE solutions mean to his company and for Malaysia.
    LRTV Custom TV
    Evolving From HFC to FTTH Networks

    10|15|14   |   2:19   |   (0) comments


    Cisco's Todd McCrum delves into the future of cable's HFC plant, examining how DOCSIS 3.1 and advanced video compression will extend its life and how the IP video transition will usher in GPON and EPON over FTTH.
    Upcoming Live Events
    October 29, 2014, New York City
    November 6, 2014, Santa Clara
    November 11, 2014, Atlanta, GA
    December 2, 2014, New York City
    December 3, 2014, New York City
    December 9-10, 2014, Reykjavik, Iceland
    February 10, 2015, Atlanta, GA
    June 9-10, 2015, Chicago, IL
    Infographics
    WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
    Hot Topics
    Analysts Warn of Major NFV Gaps
    Carol Wilson, Editor-at-large, 10/22/2014
    Is Health the Killer App for the IoT?
    Jason Meyers, Senior Editor, Gigabit Cities/IoT, 10/22/2014
    Drones Hover Over the IoT Sector
    Jason Meyers, Senior Editor, Gigabit Cities/IoT, 10/23/2014
    1959 Newsreel: Make Phone Calls – From Cars!
    Mitch Wagner, West Coast Bureau Chief, Light Reading, 10/24/2014
    Meet the Phantom Network for NFV
    Ray Le Maistre, Editor-in-chief, 10/23/2014
    Like Us on Facebook
    Twitter Feed