200,000 Time Warner Cable RGUs Exposed to Google Fiber Threat

Time Warner Cable's CTO Irene Esteves says Google's Kansas City 1-Gbps Internet access and TV service bundle doesn't pose a huge threat to the cable operator's overall business. Of course not. What Google Fiber does threaten is about 200,000 revenue generating units Time Warner Cable presently sells in the Kansas City market.

Of the 300,000 homes that Google Fiber is expected to pass in the area eventually, Esteves estimates that Time Warner Cable has 100,000 Internet and 100,000 video subs at risk.

If you assume that half the broadband customers in the Time Warner Cable service area buy high speed access from Time Warner, while half buy from AT&T, and if broadband penetration is 70 percent of homes, then you might assume Time Warner Cable's risk would be about 35 percent, or roughly 105,000 customers, which just about matches the Time Warner Cable figures.

If Google Fiber takes share equally from AT&T and Time Warner Cable, and if initial take rates are about 18 percent, one would expect losses of about nine percent for both incumbent service providers. That implies a potential Time Warner Cable loss of perhaps 9,000 high speed access customers.

If half the high speed access customers also buy the video service, then Time Warner Cable also potentially faces the loss of about 4,500 video accounts as well.

Among the other competitors in the Kansas cities market are DirecTV Group, Dish Network Corp., AT&T and SureWest Communications.