& cplSiteName &

TWC: Charter's Got Nothing on Us

Alan Breznick
1/30/2014
50%
50%

In case there were any doubt, Time Warner Cable made it clear Thursday that it's determined to remain independent.

Executives at Time Warner Cable Inc. (NYSE: TWC), which is desperately fighting for its life, came out swinging Thursday morning and defiantly laid out an ambitious three-year plan to restore it to its glory days and keep it free from the clutches of Charter Communications Inc.

In a 90-minute earnings call with analysts, company officials spelled out their strategy for boosting TWC's revenue and profit margins by rolling out new video products, hiking broadband speeds, accelerating business services growth, increasing capital spending, improving customer service, and cutting operational expenses.

"We feel very good about our ability to run this business" and create value for shareholders, said Rob Marcus, who took over as chairman and CEO a month ago. "I'm confident that our best days are ahead of us."

To buttress their position, TWC executives made the case that they have already started turning around the second-largest US MSO after a disastrous third quarter in which it shed more than 300,000 video subscribers, more than 100,000 voice subscribers, and 24,000 broadband subscribers. Though TWC reported losing 217,000 video subscribers in the fourth quarter, it also that said the losses lessened each month, and that the trend has continued this year. Executives also said the company has started adding broadband and voice customers again, leading to renewed gains in customer relationships. (See TW Cable Hemorrhages Subs.)

"Net-net, I'm very pleased with our subscriber trends," said CFO Artie Minson. The company has added 25,000 customer relationships, reversing last January's loss of 28,000. "Last year's subscriber trends were dismal," but "we've made significant progress."

Marcus said he has challenged his management team to add 1 million residential service customers by the end of 2016, "starting with positive customer adds this year." Last year, TWC shed 825,000 video and 167,000 voice customers while picking up 211,000 broadband subscribers. It closed out the year with 14.4 million customer relationships, including 11.2 million video, 11.1 million broadband, and 4.8 million VoIP subscribers.

The turnaround plan
TWC's three-year revival plan is strikingly similar to what Charter has proposed to do if its takeover bid succeeds. First, as Marcus declared in a third-quarter earnings call in late October, TWC aims to sign up 500,000 cable modem subscribers over the next 12-18 months by targeting DSL markets with low-priced "lite" broadband offerings. In these markets, it is rolling out a 2 Mbit/s downstream, 1 Mbit/s upstream service to price-sensitive consumers for about $15 a month.

The MSO plans to boost maximum download speeds to 50 Mbit/s on its standard broadband tier and 100 Mbit/s on its turbo tier. Taking a page out of Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s book, it intends to introduce an ultra tier with download speeds as high as 300 Mbit/s.

TWC hopes to spur video subscriber growth by upgrading and re-branding TV products in various ways. Plans call for upgrading Los Angeles and other markets to all-digital service; New York and a few other markets have already been upgraded. The company also intends to install new DVR tuners and offer more HD channels and video-on-demand programming.

Over the next year, TW Cable will roll out its new cloud-based programming guide and user interface to more digital set-tops. It now offers the guide on 2.8 million set-tops, and it plans to raise that figure to 6 million by next January.

The the TWC Max initiative, the MSO plans to transform its cable systems into customer service showcases. It will carry out all the digital, IP video, and broadband upgrades on a market-by-market basis, starting with New York City and Los Angeles this year. Marcus said TWC Max will be rolled out to 75% of the company's footprint by the end of 2016.

If all that's not enough, TW Cable intends to rebrand its residential services offerings, just as Comcast and Cablevision Systems Corp. (NYSE: CVC) have done. Officials said they will introduce the new brand name this year.

On the business services side, where it continues to enjoy strong growth, TW Cable is not looking to fix anything. It's counting on spurring growth by investing heavily in fiber and coax connections to commercial buildings and cell towers. It now has links to 860,000 buildings and 14,000 cell towers in its footprint.

Phil Meeks, COO and executive vice president of Time Warner Cable Business Class, has set a target of $5 billion of annual revenue by 2018 for the commercial services unit. The division's revenue grew 21.6% last year to $2.3 billion, including a record $616 million in the fourth quarter. (See Meeks Sees Business Boom at TWC.)

— Alan Breznick, Cable/Video Practice Leader, Light Reading

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
DOShea
50%
50%
DOShea,
User Rank: Blogger
2/1/2014 | 2:40:51 PM
CBS
That whole CBS battle must have had some affect on their quarterly numbers, right? Maybe things actually are better than they look, at least until the next big retransmission battle.
DOShea
50%
50%
DOShea,
User Rank: Blogger
2/1/2014 | 11:01:41 AM
Re: Disappointed
Maybe you'll get your wish, Alan. There are some reports this morning that Charter is going to come back with a higher bid.
albreznick
50%
50%
albreznick,
User Rank: Blogger
1/30/2014 | 11:09:41 PM
Re: Disappointed
Nah, Dan. Let's keep talking about this one. It's much morefun and dramatic.

 

 
DOShea
50%
50%
DOShea,
User Rank: Blogger
1/30/2014 | 8:53:57 PM
Disappointed
So much tongue-wagging went into this would-be deal before Charter even made a move, what are we all going to talk about now? Lenovo-Googorola?
From The Founder
The independent evaluation of Nokia's key virtual network functions (VNFs) was a defining moment for the Finnish giant.
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 Documentaries
Leading Lights 2016 Highlights

5|25|16   |   02:26   |   (1) comment


Some of the high points from this year's Leading Lights awards dinner at the Hotel Ella in Austin, Texas.
LRTV Documentaries
Light Reading Hall of Fame 2016

5|23|16   |   05:43   |   (0) comments


Find out who has been welcomed into Light Reading's Hall of Fame this year.
LRTV Custom TV
ZTE TM Forum Highlights

5|23|16   |     |   (0) comments


ZTE showcased its new ICT solutions at TM Forum in Nice.
LRTV Interviews
Gamma's MD on the Emergence of UC2

5|20|16   |     |   (0) comments


Gamma Communications Managing Director David Macfarlane believes the unified communications (UC) market has reached a tipping point.
LRTV Custom TV
The Ultimate 5-Minute Guide to Digital Customer Engagement

5|20|16   |     |   (0) comments


In this short video, you will hear all about how Digital Customer Engagement is the key to meeting customer expectations, keeping them happy, and maximizing revenue. VP Product & Marketing at Pontis, Ofer Razon, breaks down for us the five essential capabilities for successful Digital Customer Engagement. Don’t miss!
LRTV Custom TV
NFV in 2016: Part 1 – NFV Use Cases Get Real

5|19|16   |   05:57   |   (0) comments


Consensus is building around the key use cases for NFV, including managed IP services at the network edge and on customer premises, which can generate new revenues from enterprises/SMBs and consumers; Evolved Packet Core to support LTE migration; and adjacent technologies, such as TAS and IMS, to support VoLTE and next-generation charging and policy control ...
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 3

5|19|16   |     |   (0) comments


Steve Vogelsang discusses the challenges of operational transformation and how Nokia helps its customers. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Level 3: Why UC Is In Demand

5|17|16   |   04:12   |   (1) comment


Andrew Edison, Level 3's senior VP of sales, EMEA region, talks about the drivers of growth in the unified communications services market.
LRTV Custom TV
ARM's OPNFV Action

5|17|16   |     |   (0) comments


At the ARM booth at MWC 2016, Joe Kidder and Bob Monkman speak to Light Reading about OPNFV and their upcoming action.
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 2

5|16|16   |     |   (0) comments


Steve Vogelsang gives advice to service providers on how to move to NFV. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Interoute CTO on NFV's Maturity

5|13|16   |   06:46   |   (1) comment


Matt Finnie, CTO at international operator Interoute, explains how NFV has made life easier in terms of logistics and how Interoute can now enable a 'software-defined moment' for its customers.
LRTV Huawei Video Resource Center
UBBS 2016 Highlights

5|12|16   |     |   (0) comments


Highlights of Huawei's UBBS event in Hong Kong.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
December 6-8, 2016,
June 16-18, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
Hot Topics
DT: Telcos Must Escape Vendor Prison
Iain Morris, News Editor, 5/24/2016
AT&T to Start 5G 'Friendly' Trial by 2016 End
Dan Jones, Mobile Editor, 5/24/2016
WiCipedia: Short Skirts & Back-Up Plans
Eryn Leavens, Special Features & Copy Editor, 5/20/2016
Eurobites: Be More European, EU Tells Streaming Services
Paul Rainford, Assistant Editor, Europe, 5/20/2016
Cable Is Eyeing Its Retail Options
Mari Silbey, Senior Editor, Cable/Video, 5/25/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
Animals with Phones
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.