Cable's Balance Sheets: Video, WiFi Both Up

Cable's Balance Sheets: Video, WiFi on the Upswing The latest round of cable financials came out in the past two weeks. WiFi continued to be a big topic, as did the fact that video subscriber numbers saw increases in some areas.  Here are highlights:

Time Warner Cable (NYSE:TWC): Net residential customer relationship adds were 54,000, which represents the best fourth quarter since the company went public. Residential triple-play net adds of 273,000 were the best for any fourth quarter ever. The numbers for the full year also were good. In 2014, the company added 150,000 residential customer relationships and 373,000 triple-plays, which Chairman and CEO Rob Marcus said is a "radical turnaround from the past several years."

The company completed TWC Maxx Internet speed increases in New York City, Los Angeles, and Austin and the all-digital conversion in the first two cities. Customers in these markets with new modems have churn rates that are "materially lower" than customers in non-Maxx markets.

The company plans to complete its VOD expansion to 75,000 hours during the next quarter, and continues to improve its TWC TV app by adding more linear networks and VOD choices to more devices and making this content available both inside and outside of the home. Marcus said in December almost 1 million video subscribers used the app. As for WiFi, in December, WiFi sessions were over 28 million, which is a 30% increase over the end of the third quarter 2014.

Marcus also noted that while WiFi, thus far, has been used as a value-add to data, he thinks this is "just the beginning in the idea of utilizing WiFi as a component of the voice offering." He referred to an announcement by Cablevision (NYSE:CVC) for a WiFi-only smartphone. "We're going to watch that and see what the uptick is. I'm not sure they struck exactly the right (chord) in terms of the match between price and the absence of a cellular backup, but I think it is pretty cool."

Charter Communications (NASDAQ:CHTR): Charter grew its residential base by 5% during 2014 and added 73,000 new customer relationships during the fourth quarter. For the year, expanded basic video service grew by 76,000, and by the end of the year, more than 80% of Internet subscribers had tiers of 60 Mbps or more. CEO, President, and Director Thomas Rutledge said he expects Charter will continue to grow customers in each of its product lines, including video, in 2015.

The cloud-based user interface, Spectrum Guide, will be deployed at scale in 2015. The completion of all-digital transition means that this guide can be delivered to all TV sets. The goal is to roll it out to half of Charter's retained footprint this year, which amounts to 1.5 million video customers.

Rogers Communications (NYSE:RCI): Capex in 2015 will be focused on wireless network capacity and expanding the LTE footprint. In the fourth quarter of 2014, LTE coverage reached 84% of the population within Rogers' territory. This number had been 79% during the third quarter.

On the cable side, investment will go to Internet capacity and reducing the number of homes covered per node. The money also will be spent on customer premises equipment (CPE), including set-top boxes. NextBox 3.0 is being deployed "aggressively," and this will continue into 2015.

When asked about 4K and IPTV, Rogers' President and CEO Guy Laurence said the evolution of 4K has been considered in its capacity planning models, and currently "no change of course" needs to be made. Regarding the path to IPTV, Laurence said a beta product is targeted for the end of the year, and that it is a difficult technology to introduce and get the consumer experience right. He noted that IPTV is "still very much in the labs" but "still very much has a large team dedicated to it."

Shaw Communications (TSX:SJR.B): Given that the acquisition of ViaWest was completed during September, CEO Brad Shaw said a newly created business infrastructure services segment, including both ViaWest and Canadian data center initiatives, will help grow data center platform operations in the North American market. The company opened two new locations in 2014, in Phoenix and Minneapolis. ViaWest President and CEO Nancy Phillips said customers are asking for expansion in the East, which "remains a solid focus on a strategic level."

As for cable, Shaw has 13 existing TV Everywhere apps and recently launched a video streaming service, shomi, with Rogers. Shaw EVP and President Barbara Williams said the company is pleased with the shomi rollout and although it is still in the beta stage, it has been "interesting to see how much enthusiasm there has been for using the products through the set-top box."

WiFi access points now number 55,000, and there are 1.5 million devices registered on the Shaw network. Shaw said WiFi services have achieved 30% penetration of the Internet base and have helped maintain 35% lower churn levels across the wider user base.

Cogeco (TSX:CCA): Cogeco Cable Canada launched a TiVo (NASDAQ:TIVO) service in Ontario in November and plans to introduce it this spring in Quebec. President and CEO Louis Audet confirmed that it is "being well-received by customers."

In the United States, at Cogeco subsidiary Atlantic Broadband, a similar TiVo offering has helped cut video subscriber losses by half compared to last year, increased ARPU and higher bundle sales, Audet said.

When asked about manpower for installing TiVo, Audet said it is a complex installation that often includes more than one wireless modem, TV decoders, integrating tablet and wireless phone into the system, and use of internal wiring for MoCA.

"It is not realistic to hope that this will be done on a self-installed basis anytime soon, and that's OK," Audet said. "It's part of our modeling, and so we accepted as such .... Of course, we never stop looking for better solutions, more efficient, more economical solutions."

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