Reuters: Under-Investment in Network Weakened Time Warner Cable
"They under-invested in their core video product and were super aggressive in capital returns which has done great things for their stock price but has left them in a poor competitive position," Brean Capital analyst Todd Mitchell tells Reuters
in a piece exploring why Time Warner Cable suddenly finds itself as an underperforming acquisition target whose video subscribers are defecting at a faster rate than industry leader Comcast.
The report notes that since Time Warner Cable's split from Time Warner in 2009 (the same year of their failed attempt to force metered billing on all users
), the company's prioritization of investor returns over infrastructure, customer satisfaction or customer support appear to have come home to roost.
In addition to neglecting the company's TV services in many markets, the company was often sluggish in terms of network upgrades, still offering considerably slower speeds than Comcast in the vast majority of their markets. Reuters notes that even in the face of more serious threats (FiOS in New York City is noted) Time Warner Cable didn't do as much as other providers to improve their services.
"Time Warner Cable's results in its New York systems have been shockingly bad since the roll out of FiOS," Craig Moffett tells Reuters, estimating the cable operator lost a staggering 45 percent of its New York subscribers to Verizon. "And they haven't improved much since."