Light Reading
The No. 2 US MSO defiantly lays out an ambitious three-year plan to return to glory as it continues to reject Charter's takeover bid.

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
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?
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 Huawei Video Resource Center
Interview With Rick Talbot, Principal Analyst, Current Analysis

10|31|14   |   2:12   |   (0) comments


At the NFV Open Cloud Forum 2014, Rick Talbot shared his positive feedback about the holistic and open approach that Huawei adopts for SDN and NFV. He also found the open sharing at the event valuable as it features different perspectives from Huawei experts, telecom operators, industry analysts as well as security experts.
LRTV Huawei Video Resource Center
Interview With David Snow, Principal Analyst, Current Analysis

10|31|14   |   2:24   |   (0) comments


David Snow talked about his understanding of Huawei and its SoftCOM strategy at the NFV Open Cloud Forum 2014, saying that Huawei's wide approach combining IT and CT expertise, introducing big data and analytics into solutions and contributing to the OpenStack community particularly resonate with him and make the company stand out in the industry.
LRTV Huawei Video Resource Center
Interview With Roz Roseboro, Senior Analyst, Heavy Reading

10|31|14   |   3:13   |   (0) comments


Roz Roseboro commented on Huawei's data center capabilities and NFV solutions at the NFV Open Cloud Forum 2014, saying that in addition to covering all three key domains of compute, storage and networking, the company also emphasizes the importance of management capabilities and professional services, which are essential in making NFV a reality.
LRTV Huawei Video Resource Center
Interview With Michael Howard, Co-founder & Principal Analyst, Infonetics Research

10|31|14   |   5:25   |   (0) comments


Michael Howard talked about SDN, NFV, and OpenStack adoption at Huawei's NFV Open Cloud Forum 2014. Particularly, he pointed out that Virtual Enterprise CPE is the top NFV use case that operators plan to invest in over 2014 and 2015 to deliver new enterprise services through virtualized functions.
LRTV Huawei Video Resource Center
Interview With Jerry Caron, Senior Vice President, Current Analysis

10|31|14   |   3:11   |   (0) comments


At Huawei's NFV Open Cloud Forum 2014, Jerry Caron from Current Analysis said that orchestration and management are key to realizing SDN and NFV for global carriers, and the approach that Huawei is taking, with its FusionSphere Cloud OS at the core, is in the right direction to address the challenges.
LRTV Documentaries
Broadband Battles

10|31|14   |   01:39   |   (0) comments


This year's Broadband World Forum featured a number of show floor battles focused on access gear, components and coffee.
Jonestown
Mobile Backhaul: Going to the Dark Side?

10|30|14   |   2:26   |   (1) comment


Heavy Reading's Patrick Donegan shares his view on a dark trend that bubbled up at Light Reading's annual backhaul conference in NYC.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With CEO of SwitchCom

10|30|14   |   4:13   |   (0) comments


SwitchCom, an IT company based in Angola, recommends a variety of Huawei solutions and hardware to their customers in the energy industry.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Ethiopia's Ministry of Water Irrigation & Energy

10|30|14   |   4:08   |   (0) comments


Gosaye Mengistie of Ethiopia's Ministry of Water Irrigation & Energy discusses the collaboration with Huawei in that country.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Dongfang Electronics Corporation

10|30|14   |   5:46   |   (0) comments


Dongfang Electronics Corporation, headquartered in Chengdu, China, is one of China's largest manufacturers of power generators and contractors of power station projects.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Zimbabwe's Customers

10|30|14   |   3:31   |   (0) comments


Representatives of Zimbabwe's Ministry of Power and Development discuss the energy needs of their country as well as new areas of improvement due to enhanced ICT capabilities.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Colbún Chile

10|30|14   |   4:29   |   (0) comments


In Chile, an aging energy infrastructure was in dire need of a modern update. Claudio Valenzuela of Colbún discusses how Huawei's ICT solutions continue to provide crucial information to improve the grid and how an in-country engineer is a cricial asset.
Upcoming Live Events
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
May 6, 2015, McCormick Convention Center, Chicago, IL
May 30, 2015, The Westin Peachtree, 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
Microsoft's Skype Embraces WebRTC on IE
Sarah Reedy, Senior Editor, 10/27/2014
FTC Slaps AT&T With Throttling Lawsuit
Sarah Reedy, Senior Editor, 10/28/2014
Wheeler Gets Down With OTT
Mari Silbey, Independent Technology Editor, 10/29/2014
China's MVNOs Hit the Wall
Robert Clark, 10/27/2014
Let's Not Kill SDN & NFV With Silos
Francois Locoh-Donou, Senior VP, Global Products Group, Ciena, 10/28/2014
Like Us on Facebook
Twitter Feed