In this morning’s fourth-quarter and year-end earnings conference call, Time Warner Cable President and COO Rob Marcus outlined some of the cable operator’s key initiatives for this year, which included the rollout of a cloud-based user interface on IP set-top boxes and gateways.
Comcast is already out of the starting blocks with its cloud-based X1 platform, and Time Warner Cable made mention of its cloud-based user interface last year in an earnings call and in a Cable Show session.
“Our cloud-based user interface running on IP set-top boxes and next-gen DVRs will deliver the biggest change to the video experience that our customers have experienced in a decade,” Marcus said this morning. “These are scheduled for introduction in the second half of this year.”
Also on the front burner for this year, Marcus said Time Warner Cable is looking at doubling its Wi-Fi hotspots – with an emphasis in New York City where it competes with Verizon – after adding around 10,000 access points last year.
Both Marcus and Time Warner Cable CEO Glenn Britt touted the company’s business services revenue, which grew 26 percent to $515 million in the fourth quarter and 29 percent to $1.9 billion for the year. Time Warner Cable added more than 1,500 new employees to its business services headcount, which was a 35 percent increase, and nearly doubled the number of commercial buildings that were connected to its fiber.
“We posted organic growth of more than 20 percent again in 2012, powered by an expanded sales force, more buildings on net and new products,” Marcus said. “We think we can achieve that kind of growth in 2013.”
In addition to business services, Marcus outlined five key accomplishments from last year that he said would provide a solid foundation for 2013:
- Time Warner Cable enhanced the capacity of its network by starting its analog-to-digital conversion project. Time Warner Cable completed its rollout of DOCSIS 3.0 services last year and used the reclaimed bandwidth to increase speeds on its other data tiers, including a 50 percent increase to 15 Mbps for its Standard tier. In November, Time Warner Cable opened the doors on its first national data center in Charlotte, which enabled it to consolidate its video sourcing and infrastructure for data, cloud and phone services and its internal enterprise system. “In addition, we built out our own CDN so we can efficiently deliver our managed IP video service without reliance on third parties,” Marcus said. “These investments are already paying dividends, but just as importantly, they position us well for the long term.”
- In addition to the speed increases for existing tiers, Time Warner Cable launched 75 Mbps and 100 Mbps tiers in some markets and continued to upgrade its TWC TV apps. In December, Time Warner Cable, an early adopter of TV Everywhere services, added 4,000 on-demand assets to the iOS version of its TWC TV app, while offering as many as 300 channels via the apps to a range of devices in customers’ homes. “The really good news is our customers are starting to make use of and appreciate the apps,” Marcus said. “In December, over three-quarter of a million customers used the TWC TV app, and used it almost four million unique times. We’re now focused on adding out-of-home capabilities to the apps to make them even more valuable to customers.”
- On the customer service front, Time Warner Cable introduced one-hour service windows across most of its footprint and a 30-minute window for the first appointments of the morning in some areas, including New York City. Time Warner Cable is also experimenting with real-time appointments. Time Warner Cable has nearly doubled its self-installation rate; last month, almost 30 percent of its installations were performed by customers, which Marcus said increased customer satisfaction while reducing truck rolls.
- The integration of the former Insight Communications system has gone smoothly, Marcus said, and Time Warner Cable expects to fully realize the $100 million annual run rate for synergies that it identified before closing on the deal last year.
- The 2012 election drove a record year for Time Warner Cable’s advertising sales. Time Warner Cable’s fourth quarter increased 29 percent to $313 million, and 20 percent to $1.1 billion on the year.
Video, voice, data
On the video subscriber front, Time Warner Cable lost about 126,000 subscribers in the fourth quarter, which was relatively flat to the 129,000 it lost in the same quarter a year ago. Marcus said the video subscriber numbers were disappointing after the company hoped for a turnaround last year, but better retention efforts, along with better services, will hopefully reduce churn.
Time Warner Cable added 75,000 new data subscribers in the quarter and 34,000 telephony customers.
“Underlying our 2013 priorities are greater focus and better and faster decision-making, and to that end, the organizational changes we announced last week marked the final step from decentralized geographical operating units to a more centralized structure that we’re internally calling ‘One Time Warner Cable,’” Marcus said. “We expect that over time, this more streamlined organization will deliver new products faster and better, in addition to more reliable services. It will give our employees greater clarity in their roles and responsibilities, and, of course, we believe these changes will help us deliver the operational efficiency and profitable growth that our shareholders demand.”