Morris Hibbitt, a field technician for Time Warner Cable Inc., cleans and… (Bloomberg )
Time Warner Cable is planning major upgrades to its Los Angeles and New York operations.
The cable giant, which is resisting a takeover attempt by Charter Communications, said Thursday it will be substantially boosting Internet speeds and its video-on-demand platforms. The improvements in Time Warner Cable's two biggest markets are part of an overall three-year plan to upgrade its systems across the nation.
“We’ll triple Internet speeds for customers with our most popular tiers of service, add more community Wi-Fi, dramatically improve the TV product and, perhaps most importantly, we’ll set a high bar in our industry for differentiated, exceptional customer service," promised Time Warner Cable Chief Executive Rob Marcus.
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On a call with analysts to discuss its fourth-quarter results, Time Warner Cable officials said its capital spending would be about $3.8 billion annually over the next three years with much of that money used to improve its service.
In Southern California, the first two areas to be overhauled are to be West Hollywood and Costa Mesa.
Officials also said the company is converting its network in Southern California to all-digital, which means any customers that have no cable box and connect directly to a wall outlet will need to get a set-top adapter to receive TV service. The move, Time Warner Cable said, allows for more bandwidth that can then be redeployed for faster broadband.
The pay-TV distributor said it is also going to make its video-on-demand platform easier to navigate and will boost its library of content to about 75,000 hours of product. Time Warner Cable will also start to offer advanced set-top boxes that can record up to six channels at the same time, officials said. Currently, most customers can only record two channels at the same time.
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For the quarter ending Dec. 31, 2013, Time Warner Cable had better-than-expected results. The company, which has 14.4 million customers overall and 11.2 million video subscribers, said profits jumped 5% to $540 million. Revenues increased about 2% to 5.6 billion.
The company continued to lose video subscribers, primarily as a result of its ugly fight with CBS last summer. For the fourth quarter, Time Warner Cable lost 217,000, but that was a smaller loss than the third quarter, when 300,000 subscribers cut the cord. Executives said that so far this year the picture is brightening.
Marcus reiterated that Charter's current offer of $37.4 billion or $132.50 per share for Time Warner Cable is insufficient. Including debt, Charter's offer is valued at $61.4 billion. Marcus said an offer of $160 per share, of which $100 would be in cash and $60 in Charter stock would bring Time Warner Cable to the table.
"That’s a firm position," he said.
Charter, which has been very critical of Time Warner Cable management and its operations, is trying to persuade Time Warner Cable shareholders to back its unsolicited bid. It has also approached Comcast Corp. about buying some Time Warner Cable systems should it succeed in its acquisition plans.
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