Time Warner Cable expands Wi-Fi reach

The broader strategy is to improve customer stickiness, which will help drive growth in broadband business and moderate losses in pay-TV business.

By Trefis Dec 6, 2012 9:44AM
Maciej Frolow Brand X Getty ImagesTime Warner Cable (TWC) is working with startup WeFi to expand its Wi-Fi hotspot network in the U.S. Rather than installing its own hotspots, the company can leverage WeFi's technology to create a virtual network for its customers by allowing them access to open Wi-Fi hotspots installed by governments and businesses for public use.

There is a significant potential to increase flexibility for customers if the company can include these open hotspots. The broader strategy is to improve customer stickiness, which will help drive growth in broadband business and moderate losses in pay-TV business.

Wi-Fi usage is increasing

The has been a significant increase in Internet-enabled mobile devices in the last few years. The sales of smartphones, tablets and notebooks have grown, while stationary devices such as desktops have not gained much traction.


According to Gartner's estimates, about 172 million smartphones were sold in 2009, an increase of about 24% over 2008. Growth further accelerated in 2011 when Gartner reported that in the third quarter of 2011 smartphone sales amounted to 115 million units, registering growth of 42% over the same quarter the year before. In the third quarter of 2012, this growth again increased to 47%.


With increased web activity on mobile devices, Wi-Fi usage has also increased. Smartphone owners tend to use both cellular data services as well as Wi-Fi for their Internet needs. According to a comScore report released in 2012, about 71% of iPhone users and more than 30% of Android-based smartphone users browse via both mobile and Wi-Fi networks.

Time Warner Cable Broadband Market Share

Wi-Fi hotspots can be useful assets

According to a study conducted by Nokia, stationary locations such as home, restaurants, coffee shops, etc., are commonly used spots for mobile web access. Fortunately for Time Warner Cable, such stationary locations are also ideally suited for Wi-Fi hotspots.


This implies that consumers accessing the web on their mobile devices such as smartphones, tablets and laptops may find that most of their mobile web usage occurs at these stationary locations. Therefore, they could offload a significant amount of data usage to Wi-Fi.


Our price estimate for Time Warner Cable stands at $88, implying a discount of more than 10% to the market price.

Tags: TWC
0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

116
116 rated 1
284
284 rated 2
461
461 rated 3
671
671 rated 4
628
628 rated 5
618
618 rated 6
615
615 rated 7
495
495 rated 8
347
347 rated 9
115
115 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
DYNDYNEGY Inc10
TAT&T Inc9
VZVERIZON COMMUNICATIONS9
EXCEXELON CORPORATION8
AAPLAPPLE Inc10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.