TWC Moves Wireless Needle

While its latest earnings report was largely underwhelming, Time Warner Cable is quietly continuing to make steady if not spectacular progress on the wireless front.

The second-biggest US MSO announced Tuesday that it wired its 10,000th cell tower during the second quarter, likely making it the first cable operator to reach that milestone. Although Comcast Corp. might have more towers lit up, it has not disclosed its cell tower figures recently, suggesting that it still trails TWC.

As a result, Time Warner Cable produced US$61 million in wholesale transport revenue for the spring quarter, up nearly 39 percent from $44 million in the prior year. For the first half of 2013, the MSO reported $116 million in wholesale transport revenue, up 31 percent from $85 million in 2012, putting it on pace to scale at least $230 million this year.

While that's admittedly not a terribly large sum for a cable powerhouse that will generate more than $11 billion in overall revenues this year, it's not exactly chump change either any more. Cell backhaul is now producing real dividends for TWC, with no signs of slowing down.

Moreover, the brisk backhaul revenue growth is one key reason why TWC's overall business services revenues keep surging to new heights. In the second quarter, TWC took in a record $565 million in commercial revenue, up nearly 22 percent from the same period a year earlier. As a result, it has now collected slightly over $1.1 billion in commercial revenue so far this year, putting it on track to top $2 billion for the first time in 2013.

Unlike fellow MSOs Comcast and Cablevision Systems, Time Warner Cable has not been such a hot shot with WiFi hotspots, getting off to a relatively late start. But it's now starting to make strong gains there as well.

In its recent earnings report, TWC disclosed that it now has installed 19,000 WiFi access points throughout its territories as it builds out such major markets as Dallas, Los Angeles and New York, up from about 15,000 just a month or two earlier. Plans call for raising that total to 25,000 hotspots by the end of the year.

— Alan Breznick, Cable/Video Practice Leader, Light Reading
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