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Broadband Saves TWC's Sales

Mari Silbey
8/1/2013
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Time Warner Cable Inc. ended the second quarter with 93,000 fewer residential customers in total, compared with three months earlier but still managed to make more money from its remaining subscribers.

The operator ended June with 14.6 million residential customer relationships, yet it reported a 2.7 percent increase in total revenues to $5.55 billion.

The operator was keen to emphasize in its latest quarterly earnings report the importance it places on overall revenues, rather than the total number of residential subscribers. In short, while Time Warner is still losing customers, sales are increasing, primarily because high-speed broadband customers are paying more.

But the numbers look worse when broken down by service. TWC lost 191,000 residential video subscribers, leaving it with just more than 11.9 million video customer engagements, and lost 56,000 voice subscribers. But it did at least gain 8,000 new high-speed broadband customers to take its total to 11.07 million, an increase that helped residential broadband revenues increase by $158 million compared with a year earlier to reach $1.42 billion. That was enough to push the average revenue per user (ARPU) figure past $105 per month.

To explain the latest revenue growth, Time Warner executives cited an increase in modem rental charges, as well as the fact that users are buying higher-priced tiers of service. The company also made reference to new usage-based service offerings; a comment which falls in line with recent reports that Time Warner is offering discounts to users who agree to a bandwidth cap of 30 gigabytes per month. (See TWC Rethinks Its Broadband Strategy.)

The residential subscriber numbers for Time Warner are abysmal compared to the latest reports from Comcast Corp., AT&T Inc. and Verizon Communications Inc.. However, there are bright spots for the country's second largest cable operator. Most importantly, Time Warner's commercial services revenue jumped almost 22 percent year-on-year to $565 million, with continued strong growth predicted through the rest of 2013.

In other highlights, Time Warner said its IntelligentHome offering is now available across 80 percent of its footprint and has 24,000 customers. The number of additions in the second quarter was the strongest since the service launched.

Time Warner has also made TV apps available on more consumer electronics devices and has increased its total number of Wi-Fi access points to more than 150,000 nationwide.

While executives wouldn't comment on rumors that the company is discussing possible mergers and acquisitions with other U.S. cable operators, there was plenty of well-wishing aimed at Chief Executive Officer Glenn Britt, who has announced he will retire at year's end. Robert Marcus, the current President and Chief Operating Officer, will take over as CEO on Jan. 1, 2014. (See Behind Cable's Urge to Merge and Time Warner Cable Names New CEO.)

— Mari Silbey, Special to Light Reading Cable

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DBG
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DBG,
User Rank: Light Beer
8/1/2013 | 10:00:38 PM
re: Broadband Saves TWC's Sales
TWC and many/most MSO's are losing subs every quarter in what used to be their core business... video content delivery. They are losing it to competition due to increased innovation from satellite and OTT players. The MSO's add charges like additional modem fees to inflate their margins in broadband where they offer little to no innovation value, with the luxury of significantly less competition to get away with it.
Carol Wilson
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Carol Wilson,
User Rank: Blogger
8/1/2013 | 7:57:30 PM
re: Broadband Saves TWC's Sales
As noted in reports yesterday, some cable providers are becoming more essential for their broadband service than their TV programming and TWC seems to be one of those.
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