Time Warner Cable to rebrand service in New York, Los Angeles
Time Warner Cable (NYSE: TWC) will unveil a new brand for its cable service later this year in New York City and Los Angeles, where it plans to launch new wideband Internet tiers and super DVRs containing six tuners, CEO Rob Marcus said Thursday.
"I think our customers will be blown away," Marcus said on TWC's fourth-quarter earnings call, where he also defended TWC's management team and operating strategy, which has been criticized in recent weeks by suitor Charter Communications (Nasdaq: CHTR).
Time Warner Cable will increase the speed of its standard high-speed Internet tier to 50 Mbps in New York and Los Angeles, and increase the speed of its Turbo package to 100 Mbps, Marcus said. It will also offer an Ultra tier boasting speeds of up to 300 Mbps.
TWC, which lost 217,000 net video subscribers in the third quarter and more than 800,000 video subscribers in 2013, faces stiff competition from Verizon's (NYSE: VZ) FiOS TV and Internet products in New York and Los Angeles.
TWC is boosting its broadband speeds by converting systems to an all-digital platform, and deploying DOCSIS 3.0 technology. The MSO has been using the brand "TWC Maxx" internally and in meetings with investors. TWC won't rename the company. Instead, it will introduce a new sub-brand, similar to Comcast's (Nasdaq: CMCSA) Xfinity and Cablevision's (NYSE: CVC) Optimum brands.
TWC will expand the rollout of advanced products to subscribers in other markets in 2015 and 2016, Marcus said.
Marcus spent much of the earnings call defending TWC's upgrade schedule and its management team, responding to public comments from Charter CEO Tom Rutledge, who recently described TWC as "troubled," and Charter COO John Bickham, who told investors earlier this month that TWC had a "flawed go-to-market strategy."
Charter Communications announced earlier this month that it had offered to acquire TWC for $132.50 per share, and executives at Charter investor Liberty Media (Nasdaq: LMCA) have said that Charter's management team would be more effective at running TWC's cable systems.
"I'd argue that our leadership team is as talented and experienced as any in the industry," Marcus said.
Marcus also had new TWC COO Dinni Jain give a presentation on the call. Jain, a veteran of Insight Communications and former British cable company NTL (its systems are now owned by Virgin Media), insisted TWC is headed in the right direction. "I've never been a big fan of the larger cable companies in the U.S.," Jain said. "This is a new Time Warner Cable," he added.
While TWC lost 217,000 video subscribers in Q4, the MSO said that it gained 39,000 high-speed Internet and 1,000 voice customers. Business services was a bright spot, with revenue increasing 19.6 percent to $616 million.
TWC posted $827 million in capital expenditures in Q4, a decrease of $77 million compared to Q4 2012.
The MSO remains a "work in progress," Jefferies & Co. said in a research note Thursday. "TWC is doing what it needs to do to bolster its position ahead of potential M&A. The company is demonstrating the early success of its turnaround efforts with improving monthly trends throughout the quarter and into January."
TWC stock increased slightly following release of its Q4 report and earnings call, with shares trading at $133.30, up $1.20, or nearly 1 percent, at 11:55 a.m. ET.
- see the earnings release
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