TWC Tees Up More Meters
Speaking on the company's fourth-quarter conference call this morning, TWC COO Landel Hobbs noted that the MSO "will increase the number of cities where we implement consumption-based billing this year."
In addition to where that policy will be implemented next, the other big question is how TWC will set up the new metered billing model. The operator has already taken some heat for the trial in Beaumont for a less-than-generous approach that charges $1 for every Gigabyte consumed beyond a given limit: 5 GB for TWC's low-end tier, 20 GB for its 7 Mbit/s offering, and 40 GB for the 15 Mbit/s tier. The MSO, however, has reserved the right to alter those levels in the future. (See Metered Usage Test Rolls On and TWC Tees Up Metered Internet Trial .)
TWC officials were not immediately available to elaborate on what's coming, but given the feedback so far, expect the new consumption tiers to be set at a higher level, perhaps following a less tightfisted approach Rogers Communications Inc. (NYSE: RG; Toronto: RCI) is using across the board today. (See Rogers Takes Internet Meter to the Masses.)
Update: A Time Warner Cable spokesman tells Cable Digital News that current plans call for the MSO to expand metered billing to about four additional markets. Where and when? They're not saying yet.
Although the structure of new metered billing markets will be similar to what's being tested in Beaumont, the MSO, we're told, will be launching a number of new consumption-based tiers to accommodate light Internet users and power users. "There will be more choice at both ends of the spectrum," the spokesman says, adding that the MSO will offer more details on those tiers, including consumption thresholds and pricing, later this year.
Although the broadcast digital transition appears poised for a four-month delay, initial forecasts that cable MSOs could sign up 10 percent of rabbit-eared homes as new video customers may be a case of wishful thinking, to judge from what TWC has witnessed so far in Hawaii and Wilmington, N.C. -- markets that have already made the switch. (See DTV Delay: Game Still On , DTV Transition Could Catalyze Cable, Wilmington Flips the Digital Switch .)
TWC president and CEO Glenn Britt said the MSO has seen "modest results" in both markets. "I think it was a little over 5 percent of the off-air people we thought we gained," he said of the situation in Wilmington. "In Hawaii, the numbers were much smaller, but Hawaii is a historically very highly penetrated market for us, so it's a very different situation."
With residential services signups showing signs of slowing, it's no surprise that TWC will apply more resources to a growth engine with the most revenue potential: business services. (See Time Warner Cable Subs Growth Slows in Q4 .)
Time Warner Cable came close to eclipsing the $800 million revenue mark in commercial revenues in 2008 -- accounting for less than 5 percent of total revenues, but 10 percent of total revenue growth. Those revenues are expected to "grow more than twice as fast as our residential business in 2009," predicted TWC CFO Rob Marcus.
To that end, TWC is appointing an exec in each region to head up commercial services. Each region will also appoint someone to take charge of managing the plant and network operations that support the MSO's business-class offerings.
— Jeff Baumgartner, Site Editor, Cable Digital News