“This will develop in exciting ways that we really can’t quite imagine today. I think there’s going to be a whole array of products using these types of networks in the future,” TWC CEO Glenn Britt said on today's fourth-quarter earnings call. “This is the early beginning – I don’t think any of us can fully imagine what the products are going to be. But it’s an exciting opportunity.” (See TWC Posts Q4.)
TWC began marketing its Road Runner Mobile product in Dallas and parts of North Carolina and Hawaii late last year, using Clearwire LLC (Nasdaq: CLWR)’s WiMax network. (See TWC Revs Up 'Road Runner Mobile' in North Carolina and Cable Plays Clearwire Card.)
Future possibilities: WiMax video and voice
The MSO said that Road Runner Mobile is only the “first product” to launch on the proto-4G network, noting it could also be used to sell video and other advanced products, and help the operator evolve its hybrid wireline/wireless strategy.
“I think the networks of the future are hybrid networks where similar products are going to be offered to a whole variety of devices,” Britt said. “I think what we’re doing with Clearwire is just the beginning,” he added.
Britt said Time Warner has the capability to develop a 4G wireless voice product, and that it’s working with Clearwire and Sprint Corp. (NYSE: S) on development. But he stopped short of saying that the MSO would market voice services through WiMax, noting that “there are plenty of voice providers out there in the cellular business.”
“There doesn’t appear to be a crying demand for another one. Nor does it appear we really need that in our product portfolio. But we have the capability if we actually need it. But right now, I don’t think [we] do,” Britt told analysts.
Core cable update
Turning to its digital phone service, Time Warner COO Landel Hobbs said that during the second quarter the MSO will launch a phone portal, which will allow viewers to manage their phone account and access voicemail and caller ID via the PC.
Hobbs said Time Warner will also step up advanced advertising products that rely on Enhanced TV Binary Interchange Format (EBIF). The MSO counts about 900,000 EBIF-ready set-tops in New York City alone, and expects to have 7 million EBIF-ready set-tops deployed nationwide by the end of 2010, Hobbs said.
Time Warner lost 105,000 basic video subscribers during the fourth quarter, which chief financial officer Rob Marcus noted is an improvement on the 119,000 basics the MSO lost during the year-ago quarter. Time Warner balanced that out by adding 122,000 high-speed Internet customers during the fourth quarter, along with 84,000 digital phone customers, 58,000 digital cable subscribers, and 105,000 DVR customers.
Other highlights from today’s earnings call:
- Time Warner spent $944 million on capital expenditures in the fourth quarter and $3.2 billion for the full-year 2009. Marcus said the MSO expects to post “less than $3 billion in capex in 2010.”
- Time Warner’s “Start Over” feature now reaches more than 7 million households, or half of the MSO’s digital subscriber base.
- Time Warner will begin to market a multi-room DVR later this year.
- Hobbs said the MSO is increasing its focus on signing up new customers through TimeWarnerCable.com, noting that the site is “becoming a bigger portion of our sales channel activity.”
- The MSO expects to step up the rollout of its Docsis 3.0 service in 2010. In New York City, still the only market where TWC has launched Docsis 3.0 service, Time Warner posted 2,000 net additions for its wideband product during the fourth quarter, Hobbs said. (See TWC Fights FiOS in NYC.)
— Steve Donohue, Special to Cable Digital News