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TW Cable's New Wideband Gambit

Jeff Baumgartner
1/27/2012

11:20 AM -- Time Warner Cable Inc. (NYSE: TWC) is dangling another carrot to attract customers to its Docsis 3.0 service, offering a year of free phone service to new customers that sign up for its 50Mbit/s tier.

Chairman and CEO Glenn Britt noted on Thursday's earnings call that the MSO launched the promotion last week.

It's TW Cable's latest attempt to lure customers to the pricier, high-end service. Last year, it launched a promo in New York City -- where it's competing with FiOS -- that subsidized the cost of EchoStar Corp. LLC (Nasdaq: SATS)'s US$300 Slingbox Pro-HD device to new D3 customers. (See TW Cable Slings for Wideband and Time Warner Cable Faces FiOS Attack.)

And it seems that the strategy is working. The MSO signed up 54,000 wideband subs in the fourth quarter, a high-water mark. It didn't say how many came via the Slingbox deal, but it shows that the MSO's D3 acquisitions efforts are crawling out of the doldrums. After all, it signed up a measly 1,000 wideband customers in the early part of 2010. (See Slow Start for TWC's Fastest Broadband.)

Will the free phone idea work? We probably won't know until TW Cable reports its first-quarter results. But if I was in the market for D3, I'd probably be more interested in getting a free Slingbox than free phone service. TV Everywhere is a sexy topic these days. Phone service? Meh.

But it still shows that TW Cable is getting a bit more serious about Docsis 3.0 after a slow start. Britt identified the completion of the D3 rollout as a capex priority in 2012, placing it alongside the MSO's other big tech projects: its two national headends, more all-digital conversions and the expansion of a content delivery network (CDN) that's the basis of its IP video platform.

TW Cable, by the way, expects its 2012 capex outlay to be in the neighborhood of $2.9 billion to $3 billion, about the same as it was in 2011.

— Jeff Baumgartner, Site Editor, Light Reading Cable



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tmc8080
tmc8080
12/5/2012 | 5:44:09 PM
re: TW Cable's New Wideband Gambit


TW needs to price 50mbit aggressively. @ $99 there will be few people interested even with free dgiital voice. at $65, consumers *MIGHT* be interested and even more @ $50. $50 dual play would have Verizon perk up and take notice.. and even spur Cablevision on to offer similar deals.

Jeff Baumgartner
Jeff Baumgartner
12/5/2012 | 5:44:07 PM
re: TW Cable's New Wideband Gambit
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Yes, if they really were interested in moving the needle,&nbsp; they could drop the price big time. Perhaps J:COM of Japan's&nbsp;competitive situation is different, but they are being very aggressive with D3, pricing the tier just $5 higher than its next fastest tier.&nbsp;&nbsp;But I'd have to guess that US MSOs will explore alot of promos like these before resorting to big price cuts and ensure that&nbsp;their wideband tiers aren't too successful.&nbsp;And given the healthy margins MSOs still get with high-speed Internet, I imagine they'll&nbsp;try to avoid getting into a price war for as long as they can. &nbsp;JB


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