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RR User
@rr.com
 from:
Laughing Man 
nirolO
DHRacer
morbo
antonio010
thumbs down from:
AlexNYC
| reply to OptimusADL
Re: Time Warner = stupid
The bandwidth crisis Hobbs is talking about is their own problem because they won't upgrade to DOCSIS 3. TW could upgrade to DOCSIS 3 at the rock bottom price of $20-50 per subscriber, that cost would be immediately recouped by the profit they make off their RR service. The real problem is that TW doesn't want to spend a dime of the $4 billion in profit they are already making each year on RR customers... they want to create a new profit stream that will support their upgrades to DOCSIS 3, so it doesn't hurt their current financial profit margins. For a little more on that, continue reading...
So I looked at TW's 10-K form and noticed something interesting... their cost to provide broadband service has decreased about 11% since the year before. Yes, you heard that right.
In 2007, TW made $3,730 Million, on high speed data alone, and then had to turn around and spend $164 Million to support the cost of the network. 2007 total profit on high speed data: $3.566 Billion
In 2008, TW made $4,159 Million, on high speed data alone, and then had to turn around and spend $146 Million to support the cost of the network. 2008 total profit on high speed data: $4.013 Billion
It cost TW 11% less money in 2008, to keep their network running, than in 2007. Their cost to deliver network connectivity to each user has dropped as they highlight here:
"High-speed data costs consist of the direct costs associated with the delivery of high-speed data services, including network connectivity costs. High-speed data costs decreased primarily due to a decrease in per-subscriber connectivity costs, partially offset by growth in subscribers and usage per subscriber."
TW had 7,620 Million customers in 2007, and now 8,444 Million customers in 2008. An 11% growth with an 11% decrease in network and support operating expenses. Not too shabby TW! Anyone with half a brain can easily tell from those numbers that TW is not only doing well, but they are doing better than ever.
So... tell me TW, how is flat rate (unmetered) service no longer financially viable if you're making more profit now than ever before, as your cost to provide service continues to decline?
TW can't deliver hard numbers because there aren't any that support their BS plan to meter and bill overages. Simple as that.
Think of all those users out there that have been downloading files and streaming movies off netflix in 2008 and using "more bandwidth than ever before" according to TW. Yet all the while TW's bottom line cost to support the network has dropped 11% while profits are up 11%. They should be overjoyed, not crying poverty. Why not use some of that healthy profit and actually upgrade the network for your subscribers needs, instead of forcing us to take 10 steps back and live in the virtual stone age.
Even bankrupt Charter has an upgrade plan in place for DOCSIS 3... and they aren't in anywhere near the financial standing that TW is. | |
morbo
Complete Your Transaction
join:2002-01-22
00000
clubs: | Thanks for posting these numbers. Very helpful in shedding light on the lies spewing from Time Warner Cable. | |
Skippy25
join:2000-09-13
Hazelwood, MO | reply to RR User
TK, where is your spin on this?
I hope that since you haven't responded yet that means we are going to get a delightful and entertaining reply.
I'm wet with anticipation!!!!!! | |
nukscull
@rr.com
| reply to RR User
The cost per customer of $20 - $50 for the upgrade is just plain wrong.
It would cost that much for the DOCSIS 3.0 modem for each customer alone.
But they would also need to upgrade to new CMTS's in most cases where they are not deployed. And even if they don't have to upgrade the whole CMTS, they still have to upgrade the DOCSIS linecards in the CMTS, which DOCSIS 3.0 linecards aren't even yet available for the majority of CMTS's they use, VXR7246.
And on top of that, they would need to free up more analog channels for the DOCSIS 3.0 bonding to get the full bandwidth out of DOCSIS 3.0, which is the reason for upgrading in the first place.
That all ends up being more than $20 - $50 per customer. | |
en102
Canadian, eh?
join:2001-01-26
Valencia, CA
 ·RoadRunner Cable
 ·DSL EXTREME
| reply to Skippy25
I'm not TK, but I suspect the answers would be...
Stocks are lower »www.google.com/finance?client=ob&q=NYSE:TWC
Customer adds are decreasing (recession, anyone)
Wall Street still wants adds
--
Canada = Hollywood North | |
SinNombre
join:2004-09-16
Charlotte, NC | And I thought it was just their implementation supervisors and field techs and CSRs who are kind of useless. Turns out upper management is pretty damn stupid, too. | |
RR User
@rr.com
| reply to nukscull
Well the cable companies here in the US are saying it's closer to $100, but it's somehow being done in many other countries for much less.
Sure if you, Joe the consumer go out to the store to buy a modem, it will easily cost you $50 for that modem, because you have to pay retail mark up. TW however, does not and I'm sure they get a reasonable discount since they can easily order a very large volume of modems at any given time. Things always cost much less in volume, so who's going to save more? Joe purchasing 1 modem, or TW ordering > 100,000?
I'm not asking for TW to drop everything they are doing and deploy DOCSIS 3.0 to 100% of their footprint in one month. I understand network upgrades take time and that it could take years for TW to deploy DOCSIS 3 across most of their network. All I'm say is they could at least get started.
I sure wouldn't build a next generation network tomorrow, and then 10 years down the line when customer demand outpaces my network capacity simply throw up my arms and say "I give up" and tell everyone to slash their usage or pay fines because I'm to cheap to give a damn about upgrading the network. That's just irresponsible.
I have no problem with TW making a profit, but how much is too much? They already have a 2700% profit margin on their RR service, and that's with the current flat rate model. Are they aiming for 5000%? How do you feel about paying 27 or even 50X more for your internet service than it's really worth? Maybe a few years from now we can look forward to paying $200-300 a month, just for our internet usage which actually only costs a few dollars a month to deliver, and by then it wouldn't even cost that much since bandwidth costs continue to drop. We've now entered the era of never ending price increases and profit margins.
I have no problems paying $40-50 a month like I do now, and TW's financial data shows that the cost of keeping their network online is in decline, not increasing as they claim. I don't know what kind of BS they are trying to feed us, but I know the truth.
I would support metered billing as long as it was fair. And by that I mean charging $30 a month for say a 10 Mbps pipe, and then bill all usage at 5 cents per GB. No caps, no limits, just bill usage starting with the first gigabyte at 5 cents a gig. That way, grandma would likely only pay $30.05, while Joe across the street may watch Netflix movies all month, and end up paying $40. That's how metered billing is suppose to work. Everyone pays for their fair share of network resources. If such a system existed, then all you would simply do is offer a few different baseline packages, where the only difference is the speed at which you connect and everyone pays the same, reasonable per GB rate for their bandwidth use. | |
leedrake
join:2009-04-10
Rochester, NY
| reply to RR User
I did a more in-depth analysis here, projecting out for future, based on past performance.
»www.verizonfiber.com/Blog/tabid/···oks.aspx | |
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