Business Segment Drives Time Warner Cable Growth

Despite continuing challenges in its consumer segment, namely net customer losses, Time Warner Cable managed to grow full-year 2013 revenue 3.4 percent year over year.



Business customer revenues grew 21.6 percent, while consumer high speed Internet access revenues grew 14.4 percent. 



Fourth-quarter 2013 average monthly revenue per residential customer relationship (ARPU) grew 2.2 percent to $106.03, the highest rate of growth since the first quarter of 2012, Time Warner Cable says.



Residential high-speed data ARPU increased 12.4 percent to $46.21. Time Warner Cable says it  now offers residential high-speed data speeds of 100 Mbps in several cities and regions, including Los Angeles, Kansas City and Hawaii. 



Residential wideband high-speed data subscribers (which includes the 30, 50, 75 and 100 Mbps tiers) more than doubled year over year to 910,000 subscribers. 



But consider that Time Warner Cable has 11.08 million total residential high speed Internet access customers, meaning that just eight percent of Time Warner Cable customers actually buy a tier of service at 30 Mbps or higher. 



It isn't that the higher speeds are unavailable; just that consumers apparently do not see the value-price relationship of the faster tiers as providing good value, at the moment. 



And that is a key point: whether high speed Internet access services are available for purchase is one issue. Whether people actually buy those services is a separate issue. One might argue that only eight percent of Time Warner Cable customers buy 30 Mbps, 50 Mbps, 75 Mbps or 100 Mbps service because it is not provided. That largely is untrue.



What is true is that people are choosing to buy service at lower speeds. That means Time Warner Cable has a demand issue, not a supply issue, even if some would say Time Warner Cable has lagged in investment that would boost speeds higher. 



Some might argue investment is not the immediate issue. Instead, consumer demand is too low. That is a far-different sort of problem than lack of supply.