Up for Sale and Facing Verizon, TWC Advances Services

“We haven’t been sitting still” said a TWC official in a conference call with analysts. “We’re trying to move as quickly ahead of them in this opportunity before they actually launch.”
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Time Warner Cable announced its availability to potential buyers this week, but the nation’s second-largest cable provider is moving ahead with plans for expansion and for battle with a new competitor in New York City.

Also this week, Verizon and New York City announced they have teed up a franchise agreement for the telecom giant to roll out its FiOS service.

“We haven’t been sitting still,” said a TWC official in a conference call with analysts. “We’re trying to move as quickly ahead of them in this opportunity before they actually launch.”

TWC said it plans to double its HDTV offerings in the city to 100 channels by year’s end as it migrates to an all-digital city. (It’s already all-digital in Brooklyn and Queens and is working on Manhattan.)

In New York, the company is also rolling out features like onscreen Caller ID and the “Startover” program rewind service.

TWC’s implementation of switched digital video remains on track, the company said. Switching is already installed in 10 cities and is expected in most major TWC cities by the end of the year.

Revenue grew 8 percent over the first quarter of 2007 to $4.2 billion as the company added 55,000 basic video subscribers—its best performance in two years—and added 261,000 digital subscribers, bringing digital penetration above 62 percent. The company added a record 418,000 HDTV subscribers, for a total of 3.1 million, or 41 percent of its digital subscribers, a figure the company hopes to boost to 50 percent by year’s end.

The company attributed some of the positive growth to a $35 million increase in marketing efforts over the first quarter of last year, specifically in New York and in Los Angeles, where it has introduced a new programming package to “super-serve” Hispanic viewers, the company said. It may roll this plan out to other markets, the company said. Customers can also now sign up for service at 700 Wal-Mart stories, following an agreement with the retailer earlier this year.

Regarding the entry of Verizon FiOS into New York, officials noted that TWC and other cable companies have already competed with Verizon in other markets. Verizon inevitably picks up video subscribers from cable and DBS, but cable also is increasing its voice business.

“We can pretty much see what’s going to happen,” said CEO Glenn Britt. “It will probably get more headlines, because it’s New York City.”