What's Next for TWC
Having snatched Time Warner Cable from Charter's clutches, Comcast plans to do the same things with TWC that Charter did, only more so. (See Charter Goes Over TWC's Head.)
Speaking on conference calls with the press and financial analysts Thursday, Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC) executives spelled out their ambitious plans for reviving TWC's cable systems and reputation. These plans include upgrading TWC's under-capitalized networks, boosting its broadband speeds and in-home WiFi networks, accelerating its conversion of cable systems to all-digital service, and rolling out IP video and cloud-based video services, just as Comcast has already done in its own territories.
"That playbook has given us real momentum at Comcast Cable," said Comcast Chairman & CEO Brian Roberts. "That's what I hope we can do for Time Warner."
Similar to what Charter Communications Inc. outlined for TWC last month, Comcast said it "will be investing hundreds of millions of dollars annually to improve Time Warner Cable's networks," upgrading them for "higher Internet speeds and greater reliability," among other things. Currently, TW Cable offers relatively low broadband speeds, topping out at 50 Mbit/s in most markets and 100 Mbit/s in a select few markets such as New York City and Kansas City. In contrast, Comcast offers top speeds of 105 Mbit/s across the country and up to 505 Mbit/s in its key Northeastern areas.
Likewise, on the video side of the business, Comcast said it will "accelerate the deployment of advanced technology and the development of new and innovative products and services for millions of [TWC] customers." Those products and services include Comcast's flagship X1 IP video platform, which offers a cloud-based user interface, programming guide, and VoD service. The lineup also includes Comcast's new cloud-based X1 DVR, which recently launched in Boston.
Like Charter, Comcast also intends to speed up Time Warner Cable's adoption of all-digital service, which has lagged well behind the industry pace. With TWC's all-digital rollout less than 20% completed across the US, according to SNL Kagan , Comcast aims to accelerate that pace so that TWC can roll out more HD channels, more VoD offerings, and higher broadband speeds.
In addition, similar to Charter again, Comcast said it will revamp TW Cable's customer service operation, whose reputation has declined over the past few years. Boasting that it has been "laser-focused on improving customer service and the customer experience" recently, Comcast promised to bring that same focus to TWC.
Finally, unlike Charter, Comcast plans to enhance TW Cable's business services offerings. Comcast, the cable leader in the commercial market, said it will add such offerings as hosted voice to TWC's existing business portfolio.
With regulatory review of the $45.2 billion deal expected to take nine to 12 months, TWC executives said they will focus on carrying out their own revival plan laid out late last month. Under that three-year plan, TWC intends to transform the company's operations by hiking capital spending, accelerating all-digital upgrades, rolling out new cloud-based video products, boosting broadband speeds, improving customer service, and spurring new business services growth. (See TWC: Charter's Got Nothing on Us.)
"We're very focused on the operating plan laid out two weeks ago," said TWC CEO Rob Marcus.
Roberts said Comcast officials would welcome whatever progress TW Cable can make on its own. "They put out a very specific plan for the year," he said. "We hope they can meet and exceed it."
— Alan Breznick, Cable/Video Practice Leader, Light Reading