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TW Cable Has 15,000 WiMax Subs

Jeff Baumgartner
1/27/2011

Time Warner Cable Inc. (NYSE: TWC) intends to keep spending money on wireless initiatives although its current strategy with WiMax and Clearwire LLC (Nasdaq: CLWR) has yet to yield any eye-popping results.

The MSO, which has WiMax available to nearly 75 percent of its footprint, has "almost 15,000 subscribers," TW Cable Senior EVP and CFO Rob Marcus said on Thursday's fourth-quarter earnings call.

He acknowledged that it's "still early days" on that front, "but we're gaining key insights into the wireless business, as well as the wireless needs and desire of our customers."

But that insight is coming at a price. Marcus said fourth-quarter wireless losses were about $20 million, and $50 million for all of 2010.

"We're trying different models, different products," TW Cable President and CEO Glenn Britt said of the MSO's wireless strategy. "And to date, I would say our results are not very impressive and pretty inconclusive, so we're going to stick with it for a while."

However, it will continue to spend in the area. For 2011, "total startup losses" from the MSO's wireless, new home security initiative and new business projects will be in the $75 million range, Marcus said, but didn't break out how that would be spread out to individual projects.

But there's still no firm word on what TW Cable intends to do with the Advanced Wireless Services (AWS) spectrum it bid for and won back in 2006. "We have no current plans to divest the spectrum or otherwise monetize it. At this moment ... we don't have specific plans to utilize it, either," Marcus said. (See SpectrumCo Gets Licenses .)

Financial update
Fourth-quarter numbers were generally solid, with profits rising 22 percent to $392 million ($1.09 per share), and revenues of $4.80, up 6 percent. (See Time Warner Cable Posts Q4.)

On the subscriber front, TW Cable continued a disturbing trend by losing 141,000 basic video customers, more than the 125,000 expected, and driven by losses in analog single play subs. It added 94,000 high-speed Internet subs, off from an expected 107,000. But voice rebounded as the MSO added 72,000 subs, ahead of an anticipated 59,000, according to Sanford C. Bernstein & Co. Inc. .

Other nuggets from Q4:

  • TW Cable has no plans at this point to market video subscription services outside its traditional service areas as it gets closer to offering video on tablets, and Sony Corp. (NYSE: SNE) and Samsung Electronics Co. Ltd. (Korea: SEC) connected TVs. "Right now we purchase the rights from the content companies to distribute programming inside our cable footprint," Britt said. "We're using Internet standards, but we're using it within our cable system." (See CES 2011: TW Cable, Sony Make IPTV Connection and CES 2011: Samsung Puts MSOs in the Picture.)

  • TW Cable added 147,000 "Turbo" Internet subs and 5,000 Docsis 3.0 subs in the quarter, marking the first period in which total Turbo and wideband adds exceeded aggregate basic and "lite" tier customers.

  • As expected, TW Cable's business services revenues in 2010 breached the $1 billion mark, coming in at more than $1.1 billion, up 21.1 percent year-on-year. (See Cable's $5B Biz Services Bonanza .)

  • Britt had some backhanded compliments for Netflix Inc. (Nasdaq: NFLX), noting it has "a wonderful interface, which anybody can hire a bunch of Web designers and do that."

    — Jeff Baumgartner, Site Editor, Light Reading Cable

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