Telcos put the squeeze on TWC

“What we do know is that some customers are eager to right-size their bundles with us, and digital phone is the most mentioned item for downsizing,” Hobbs said. “We are combating this trend with programs like price-lock guarantee and also a value-centric promotion for digital phone. In the Carolinas, for example, we are offering the promotional product for $19.99 for 6 months to stabilize digital phone net-add levels while providing the promotion for upselling into price-lock guarantee.”

TWC’s telephony plans do not, however, include creating its own wireless offering, unlike fellow cableco Cox Communications. Instead, TWC, along with Bright House and Comcast, invested in Clearwire, a nationwide WiMax network that will give the cablecos access to high-capacity wireless broadband service and SpectrumCo AWS license in their territories if they were to launch their own voice service.

“As we’ve said before, we have no intention of creating another cellular telephone company,” Britt said. “However, we do see opportunity over time to offer a broader range of services to a variety of devices over both wired and wireless transmission technologies. As part of this, we plan to roll out an additional offering in conjunction with Clearwire in at least one city later this year.”

With respect to TWC’s overall earnings, Britt reminded investors that he warned of the slowdown in TWC’s last earnings call, and now it has happened. The economy, coupled with increased telco competition, is to blame for its slowdown, he said. The New York-based cableco gained 49,000 service lines in the fourth quarter, bringing its total to 34.2 million, slower growth than in past quarters. Basic video subscribers decreased by 197,000 to 13.1 million due to customers ending subscriptions and the company selling off some properties. The cableco, second largest behind Comcast, saw video revenue grow 4% to $2.65 billion from $2.55 billion. High-speed data revenue grew 11% to $1.08 billion, up from $970 million, and voice revenue rose 29% to $435 million, up from $336 million.