Getting to Know You: TWC Dials Up Analysts

On Wednesday Time Warner Cable executives hosted a conference call with industry analysts. The get-together came the day before TWC’s shares made their debut on the New York Stock Exchange, which prompted one analyst to jokingly ask if CEO Glen Brit and other executives if they were sure they wanted to go through with being a publicly traded company.

A lot of numbers were tossed around for analysts, including that TWC is predicting EBITDA to increase this year in the mid to upper 30 percent range, but the conference call also provided a roadmap of where the company is headed this year and beyond.

TWC COO Landel Hobbs said three operational goals for this year were getting Start Over across the majority of the MSO’s footprint, increasing the use of switched digital video (SDV) and "refinement of the bundle." As part of its sustainable network strategy, which is based upon building out the network in advance of consumer demand, TWC plans on having SDV in about three-quarters of its systems by year’s end and digital simulcast completed in the rest of its legacy systems. Last year, TWC had digital simulcast in 20 divisions and SDV in eight.

TWC expects to spend $200 million this year on its sustainable network strategy after forking out $80 million last year.

TWC would also like to refine its strategy on advanced advertising and bring a more Internet-like experience into play, including real-time ads, for customers and advertisers.

"We don’t really need to do anything with our systems because the capability is largely software," Brit said in response to a question about what needed to take place in order to deploy advanced advertising. "The real issue is understanding with advertisers what they want to do and then implement it."

In addition to advertising, TWC’s other major initiatives for the year include launching commercial phone service in its legacy footprint and honing its wireless strategy. Former Adelphia systems need work The biggest challenge going forward for TWC is getting the former Adelphia systems up to speed, particularly the ones in Dallas and Los Angeles, which combined account for half of the subscribers acquired from Adelphia. TWC has added digital phone services to roughly 900,000 homes in the new markets and converted 14 of the 23 billing systems, but Los Angeles and Dallas accounted for 80 percent of the company’s lost subscribers in the fourth quarter.

The Los Angeles division faces integration issues after being three separate systems previously while Dallas needs its plants upgraded.

"While these systems present the biggest challenges, they also represent significant long-term opportunity," Hobbs said. "Both have complex integration efforts and will require substantial focus and resources to turn around, but, let’s be clear, we have every expectation of turning them around." – Mike Robuck