TWC broadband growth another blow to Bells
Time Warner Cable boasted of having outsold the Bells in the broadband game in the third quarter, but it acknowledged that the economy is starting to impact its business and lowered its expectations for the year.
TWC added more broadband subscribers in the third quarter than AT&T and Verizon Communications, echoing a similar achievement from Comcast. The 214,000 new high-speed Internet customers it added lifted the company’s total to roughly 8.6 million subscribers, slightly more than Verizon’s. “We continue to take significant broadband share from both companies,” said Landel Hobbs, TWC’s chief operating officer.
But the cable operator also lowered its revenue guidance for the full year from between 9% and 11% to 8%.
Though cable is generally seen as a recession-resistant business, it is not immune to macroeconomic trends, said Glenn Britt, TWC’s chief executive officer. “The current economic environment is unprecedented. If people continue to lose their homes and their jobs, it would be naive to assume there would be no impact on our business.”
Over the last month, the company has seen a “dramatic slowdown in net additions across all [revenue-generating unit] categories,” said Robert Marcus, TWC’s chief financial officer.
And it expects lower sales of premium services, such as pay TV and digital video recorders. The company added 150,000 DVR customers in the quarter, down sharply from 211,000 a year earlier but giving TWC 46% penetration of its digital video base.
The company’s voice customer additions in the quarter were down 25% from a year earlier to 207,000, which TWC attributed in part to many customers “cutting the cord” -- opting to go without landline voice service altogether.
At the same time, TWC is pushing harder into commercial markets. For the first time, the company’s quarterly revenue from business customers exceeded $200 million. Though it only accounts for 5% of the company’s revenue, it made up 10% of its year-over-year revenue growth. And last month it launched Ethernet services for small and medium businesses.
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