Time Warner Cable Inc, the second-largest US cable provider, will no longer aggressively push "triple play" packages of Internet, video and voice on its customers, moving away from the long-held industry practice of bundling the services together. Time Warner Cable is the first cable company in the US to acknowledge that customers would prefer to only pay for television and Internet, as demand for landline service has been declining steadily with many people only using cellphones, even at home.
The company lost 35,000 voice subscribers in the first quarter, missing analysts' estimates of a gain of 76,000 subscribers. Overall revenue for the quarter also came in just slightly short of expectations. Getting customers hooked on all three services will no longer be a priority when potential customers call to ask about subscribing, Chief Operating Officer Rob Marcus said.
The new strategy, which was rolled out in the first quarter, resulted in more customers signing up for single or double play packages than triple play packages. The company lost 35,000 net triple play subscribers in the quarter compared to a year ago. Time Warner Cable added only 143,000 high-speed data subscribers in the first quarter, fewer than the 181,000 subscriber additions that analysts had expected, according to StreetAccount.
Net income attributable to Time Warner Cable rose to $401 million, or $1.34 per share, in the first quarter, from $382 million, or $1.20 per share, a year earlier. Excluding items, the company earned $1.41 per share, which beat analysts' average estimate of $1.37 per share. Revenue rose about 6.6 percent to $5.48 billion, short of analyst estimates of $5.49 billion. The company said it cut 500 jobs in marketing, finance and human resources in the first quarter.