Time Warner Cable’s ’08 success will depend on financial growth, continued improvement in the troubling Dallas and L.A. markets and the burgeoning SMB market, said pres/CEO Glenn Britt Mon at the UBS conference. However, investors still need to recognize the cable industry’s seminal shift away from video centricity, he said, and not place so much emphasis on basic sub losses. "We are heading into a world where we offer [all our] services to everybody," said Britt, adding that the company’s own psychology is changing. "We are really a full-service company [that is] going to sell something to get into the home" and then determine what else the household desires. Against this variable backdrop, he said the Dallas and L.A. markets—currently experiencing the greatest basic losses and competitive pressures—are finally showing much-needed improvement. "We’re through the worst in both markets and should see very nice [financial] growth next year," said Britt. A rollout of phone and broadband services will commence next year in both locales. But what these and every other Time Warner markets won’t see is a comprehensive mobile push: neither Time Warner nor Comcast will participate in the FCC’s upcoming 700MHz auction. Comcast said it "will continue to explore how wireless can complement our services through various partnerships and consumer trials," and Britt acknowledged similar plans while calling any wireless prognostications "half-baked." As tepid demand for cable mobile services continues, he said, Time Warner may "sensibly" invest in 4G technology over a number of years. Time Warner’s decision against auction participation "should remove some overhang on the stock as investors were previously concerned about the potential for significant spending not only in the auction but also on a network buildout," wrote Oppenheimer in a research note. On the commercial front, Time Warner’s rollout of phone service for the SMB segment is "far along" in legacy systems and will exert a positive impact in ’08. Shares of Time Warner Cable closed Mon at $26.87, up 3.23%.

The Daily


It’s Complicated: Warner Bros Discovery is Coming But Questions Remain

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