Light Reading

TWC Cuts Video Losses, Boosts Data Gains

Alan Breznick
4/24/2014
50%
50%

Even if it's just playing for pride right now, Time Warner Cable appears to have raised its game to a new level.

In its most upbeat earnings presentation in some time, Time Warner Cable Inc. (NYSE: TWC) reported notably lower video subscriber losses and higher broadband and voice subscriber gains in the first quarter as the company began prepping for its pending buyout by Comcast Corp. (Nasdaq: CMCSA, CMCSK). TWC also started adding customer relationships again and substantially reduced its customer churn rate after suffering heavy subscriber losses across the board in the second half of last year. (See Comcast to Buy Time Warner Cable for $45.2B and TWC: Charter's Got Nothing on Us.)

Trying to put a positive spin on the continuing erosion of its pay-TV subscriber base, TW Cable said it lost "only" 34,000 video subscribers in the winter quarter, a big improvement over the 119,000 video customers that it lost in the same period a year ago and its lowest quarterly loss in five years. As a result, its total video sub base now stands at nearly 11.2 million.

In fact, TWC Chairman & CEO Rob Marcus said, the first quarter loss "was as good as we've seen in some time." TWC Cable CFO Artie Minson noted that the company's video subscriber performance improved month-by-month during the quarter, ending the period with an actual subscriber gain in March.

Despite the improved video performance, though, TWC's video revenues continued to slide in the quarter. Video revenues dropped to $2.5 billion, down 6.6% from nearly $2.7 billion a year earlier. Due to this drag and a smaller decline in voice revenues, the company's total residential services revenues slid 0.9% to just under $4.6 billion despite a healthy increase in broadband revenues.

On the broadband side, TW Cable enjoyed a truly standout quarter, signing up 269,000 high-speed data customers as it aggressively pursued DSL users. That's more than double the 131,000 broadband subs that it added a year ago and its best quarterly performance in that category in six years.

As a result, TW Cable now has close to 11.4 million broadband subscribers. That makes it the second major US MSO to have more broadband than video subs, joining would-be suitor Charter Communications Inc.

TW Cable also showed marked improvement on the voice front, netting 107,000 new phone subs. The gain, reversing a loss of 35,000 phone customers a year ago, was its best quarterly showing in the voice area in two years. The company ended the quarter with 4.9 million voice customers.

Thanks to these improved subscriber metrics, TW Cable boasted that it added 128,000 total customer relationships in the first quarter, the most it has added in more than seven years, boosting its total beyond 14.5 million. The company also signed up more double-play and triple-play customers, after shedding bundled subscribers in the second half of 2013.

TW Cable executives attributed the lion's share of the gains to reduced customer churn, after bumping up their marketing budget for subscriber retention efforts for the quarter. TWC COO Dinni Jain said the retention gains should be "sustainable" throughout the year even as the company institutes its annual rate increase this spring.

In response to an analyst question about the relatively weak performance of Verizon Communications Inc. (NYSE: VZ)'s rival FiOS service during the quarter, Marcus noted that his company saw its "most significant" churn reduction in markets where it competes with FiOS, such as New York. "That's something we're proud of," he said.

Calling it the company's "best subscriber performance in the last five years," Marcus credited his management team. "We have not taken our eyes off the ball" since the Comcast acquisition was announced two months ago, he said. Minson added that the stronger performance has continued through April so far.

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

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
4/28/2014 | 12:09:33 PM
Re: Video to broadband
SachinEE - Of course it's a different game entirely if TWC is acquired by Comcast, which seems likely. 
SachinEE
50%
50%
SachinEE,
User Rank: Light Sabre
4/28/2014 | 10:35:22 AM
Re: Video to broadband
According to the latest statistics by TWC, broadband subscribers are overwhelming video subscriber as time goes by. This is so despite the positive adjustments in video performance. The recent 11.4 million broad band subscribers at the TWC cable, who have earned the company a position as the second major US MSO, should help rejuvenate its efforts inclined more on the broadband side than on the video side. It is very clear where much of the revenues are. It will be interesting to see what happens when this transition hits the peek. 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
4/24/2014 | 6:14:36 PM
Video to broadband
Looks like the world is moving from video to broadband. It'll be interesting to see when that hits its tipping point, if it has not done so already. 
Flash Poll
From The Founder
Network architects aiming to upgrade their networks to support agile, open, virtualized services in the 21st century need to consider new criteria when choosing between technology suppliers.
Live Streaming Video
BTE 2015 Sponsor Keynote: HP
Dr. Prodip Sen, CTO, Network Functions Virtualization, HP
LRTV Custom TV
Red Hat Demo

7|2|15   |   10:53   |   (0) comments


Red Hat's Nicolas Lemieux demonstrates how Red Hat is driving innovation through open source communities.
LRTV Custom TV
Red Hat's Approach to OpenStack Adoption

7|2|15   |   5:17   |   (0) comments


Red Hat's Radhesh Balakrishnan outlines his company's open source strategy for both enterprises and telcos.
LRTV Custom TV
The New IP Goes Mobile With vEPC

7|2|15   |   1:12   |   (0) comments


Heavy Reading's Gabriel Brown discusses results of a Light Reading survey sponsored by Brocade that shows a clear commitment by mobile operators to move quickly to virtual EPC deployment.
LRTV Custom TV
Making Business Sense of SDN

7|2|15   |   1:42   |   (0) comments


Results of a Brocade-sponsored survey show that CSPs have a clear sense of SDN use cases but are wrestling with the business case. Sterling Perrin of Heavy Reading looks behind the numbers.
LRTV Custom TV
NFV Will Be Here Sooner Than You Think

7|2|15   |   2:22   |   (0) comments


Forget the usual ten-year cycle for new technologies – NFV will be a core part of CSP networks in five years, based on results of a Brocade-sponsored survey, says Heavy Reading's Caroline Chappell.
LRTV Custom TV
The New IP Gains Traction With CSPs

7|2|15   |   1:42   |   (0) comments


Roz Roseboro of Heavy Reading analyzes results of a Light Reading survey sponsored by Brocade showing that CSPs are getting serious about making the transition to the New IP era.
LRTV Custom TV
It's (Real) Time for Analytics

7|2|15   |   1:42   |   (0) comments


Heavy Reading's Jim Hodges looks at how CSPs say they plan to use analytics to deploy new services in real time as part of The New IP, based on results of a survey sponsored by Brocade.
LRTV Documentaries
IoT in Action

6|30|15   |   1:39   |   (8) comments


Two co-workers discuss the benefits of IoT technology.
LRTV Interviews
Ericsson Opens Up on OPNFV

6|30|15   |   14:16   |   (1) comment


Martin Bäckström, VP and head of industry area Datacom at Ericsson, talks to Light Reading founder and CEO Steve Saunders about the emergence of OPNFV, the importance of standards and Ericsson's OPNFV plans.
LRTV Custom TV
NetNumber Founder Discusses NFV/SDN Impact on SP Networks

6|26|15   |   4:15   |   (0) comments


NetNumber Founder Doug Ranalli examines why SPs need a new network infrastructure for service agility. While NFV and SDN are the tools, the old ways of thinking about signaling control are inhibitors. Doug provides his recommendations.
LRTV Custom TV
Orchestrating NFV vCPE Services Across Multivendor Networks

6|26|15   |   5:46   |   (0) comments


Nirav Modi provides an overview of vCPE, the fastest-growing NFV use case, showing how Cyan's Blue Planet orchestrates vCPE services across a multivendor infrastructure to rapidly deliver new managed services for business customers.
LRTV Custom TV
ZTE at LTE Summit Amsterdam 2015

6|26|15   |     |   (0) comments


As one of the leading global telecommunications providers, ZTE presented its cutting-edge technology at LTE World Summit 2015 in Amsterdam. On display at ZTE's booth were the latest R&D achievements in wireless, 5G development, HetNet, deep convergence of FDD and TDD, and RCS/IMD/iSDN/vCN.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 6, 2015, The Westin Peachtree Plaza, Atlanta, GA
October 6, 2015, Westin Peachtree Plaza, Atlanta, GA
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
All Upcoming Live Events
Infographics
Hot Topics
Who's Feeding Fiber to LinkNYC Hotspots?
Mari Silbey, Senior Editor, Cable/Video, 6/29/2015
What's a Gigabit Good For?
Carol Wilson, Editor-at-large, 7/1/2015
Colt to Jettison Ailing IT Business
Iain Morris, News Editor, 6/30/2015
Eurobites: Activist Investor Takes Stake in AlcaLu
Paul Rainford, Assistant Editor, Europe, 6/30/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Casa Systems has been going from strength to strength over the last couple of years. In 2013, it became the first vendor to ship an integrated CCAP device -- the ...
Cedrik Neike, SVP of Global Service Provider, Service Delivery, at Cisco, talks to Light Reading founder and CEO Steve Saunders about solving service provider customer problems in a virtualized, DevOps world, including multivendor support and the future of network procurement.
Cats with Phones