TWT trims losses on revenue growth

Time Warner Telecom increased revenues and trimmed losses based on what its leaders called successful execution of a disciplined focus on the enterprise market.

The competitive carrier today announced annual 2005 revenues of $708.7 million, up 9% over 2004, and a net loss of $108.1 million, down 19% over the previous year, based primarily on expanded sales. The company increased its sales to enterprise customers by 18% while carrier sales remained stable. In addition, TWT grew data and Internet revenues by $10 million year over year in the fourth quarter.

Larissa Herda, chairman, CEO and president of Time Warner Telecom, said the company is seeing the payoff of its enterprise initiatives and reaping the rewards of increased customer interest.

“After the mega mergers, business customers have fewer choices for nationwide providers of complex business services like the ones we provide,” she said in a Tuesday morning analyst call. “That means more opportunity for us, as evidenced by the growing number of proposals we are being asked to respond to. Demand has increased, more customers have expressed concern about their lack of choices, particularly larger customers, and we have been invited into accounts we have been trying to get into for a long period of time.”

Herda said Time Warner Telecom would continue to work to “execute better from proposal to design phase, provide faster and more efficient customer service, and innovative, scaleable and efficient solutions. We will also take it a step further – we will execute better than most but with a personal touch, because people still buy from people.”

That personal touch is one reason TWT has been able to reduce churn, she added, following an initiative that included addition of a customer care specialist. Annual service disconnects were down 17% over 2004.

In the fourth quarter, Time Warner Telecom grew revenue $16.5 million over the same quarter of 2004, a 10% increase and grew revenue $6.7 million sequentially, an increase of 4%.

TWT continues to expand its reach, adding 900 addressable buildings in 2005, but has adopted a success-based capex model, Herda added. Capital expenditures were $41 million for the fourth quarter, up slightly from $39.7 million in the third quarter of 2005 but down from $49.4 million a year ago. For the year, capex was down to $163 million from $172 million in 2004. The company expects to continue its success-based expansion, spending $165 million to $175 million in 2005.

Herda said Time Warner Telecom might consider a new branding model for its business services as it is experiencing some market confusion in areas where Time Warner Cable also has begun selling business services.