Charter Communications has begun the transition of rebranding its recently-closed acquisition of Time Warner Cable US customers to its new brand, Spectrum. This week Time Warner Cable subscribers in Los Angeles and Dallas, TWC’s largest and ninth-largest markets respectively, officially become Spectrum customers.
It’s been four months since Charter acquired Time Warner Cable and now the former is retiring the latter’s name permanently, rebranding on a market by market basis.
Los Angeles and Dallas “were both two of the earliest TWC Maxx markets, meaning they are likely down to little or no analog channels so have a lot of excess broadband capacity, and are adjacent to legacy Charter footprint which should make marketing and distribution easier,” said J.P. Morgan analyst Philip Cusick in a research note referenced by FierceCable.
Charter President and CEO Tom Rutledge told the Los Angeles Times, “Our goal is to provide superior video service, superior data service and a superior voice service than any of our competitors. And hopefully we will be able to upgrade customers into the new Spectrum service.”
Charter’s three TV packages: Spectrum Select for $64.99 a month, Spectrum Silver for $84.99 and Spectrum Gold for $104.99. In July, Charter Spectrum promoted a triple-play bundle of Spectrum TV, Internet and Voice for $29.99/mo each when bundled.
In LA, Charter is relaunching SoCal regional sports network SportsNet LA to $4.50 a month per subscriber and rebranding it as Spectrum SportsNet.
Rates paid by customers in general will not immediately change, Rutledge told the LA Times, but when current deals expire, Spectrum bundles will be offered and those rates may be higher than Time Warner Cable’s rates were.
A clear competitive advantage for Charter is faster Internet speeds, with basic Spectrum broadband service running at 100 megabits per second.
Charter has agreed, as a condition of the merger, to continue to provide a low-cost service to students and seniors, but it will discontinue Time Warner Cable’s lowest-speed “lifeline” broadband service at less than 5 megabits per second, priced at $14.99 a month.
In addition to English-language TV spots addressing homeowners (and parents), Hispanic marketing campaigns have also been running in markets including Dallas and California.
The mammoth merger, which includes Bright House Networks, brings under one tent 25 million customers in 41 US states, making Charter America’s second-largest broadband Internet provider, tucked between the #1 cable provider, Comcast, and the third-largest pay TV distributor, AT&T (which is rebranding its U-verse broadband service to AT&T Internet and AT&T Phone in the wake of its $69 billion DirecTV acquisition).
Charter paid about $11.4 billion for Bright House Networks and close to $60 billion for Time Warner Cable, along with acquiring $21 billion in Time Warner Cable debt.
As is common with the cable industry, a group regarded on a par with dentists and airlines it seems, Time Warner Cable has suffered from poor customer service scores for years. According to the American Customer Satisfaction Index, or ACSI, TWC scored 51 out of 100, tying with Mediacom Communications for the worst overall rank in any US industry, as Bloomberg notes.
Charter Spectrum offers a fresh start to re-engage customers, already using its local marketing and public affairs platform, Charter Our Community, to show community support, such as a recent volunteer effort in Long Beach, CA, below.
“It’s not surprising Charter wants to rebrand Time Warner Cable,” David VanAmburg, ACSI’s managing director, told Bloomberg. “Charter has scored better than Time Warner Cable in recent years, so it could bode well for Time Warner Cable customers. But the data suggests leaps-and-bounds improvement could be difficult.”
Rutledge told the LA Times that Charter plans to hire 20,000 employees and bring call centers back to the U.S. to improve customer service. “Charter is growing very rapidly, and part of the brand’s goal is to leave the Time Warner brand behind, particularly from a reputation perspective, and focus on great products and service,” Rutledge said. “And we actually think that we have better products.”
Charter Communications is also planning nationwide mobile phone service to augment its cable TV offerings based on wireless spectrum rights Time Warner Cable acquired from Verizon Communications in 2012.
And, as it turns out, so is rival Comcast, whose CEO Brian Roberts told the Goldman Sachs Communications Conference in New York this week that his company will debut a wireless offering in mid-2017. “We’re excited to be working toward that,” Roberts said. “We believe it’s value-added to our customers. That’s what we’re working on.”
Comcast sees wireless as a way to grow its broadband subscribers and reduce churn as fewer customers need an Internet connection with broadband-penetration nationwide now at 70% to 75%. As Philly.com notes, “Strategically, a wireless service would allow Comcast to offer a “quad-play” (quadruple play) of TV, high-speed internet, landline phone and wireless services.”
Comcast also intends to expand on its Xfinity deal with Netflix, which will see Netflix will be available on the Xfinity cable-TV service by Thanksgiving.
The former bandwidth hog and enemy used Comcast’s broadband connection to bring in over-the-top programming that outshone its own linear and non-linear (on demand) cable TV programming. But now it’s letting bygones be bygones and inviting other standalone video streaming services to bring their offerings to the company’s X1 cable set-top box. “We’re in discussions about doing that—absolutely,” Roberts told The Street.
AT&T is also promoting its vision of the connected life and mobility, as President and CEO of AT&T Mobility Glenn Lurie explained at CTIA Wireless (above).
AT&T is planning an Internet TV app that “isn’t meant to steal customers from its DirecTV satellite service or its U-verse cable TV package,” Fortune notes. “The goal—at least at the start—is to woo viewers who have opted out of the traditional pay TV ecosystem” or cord-cutters as they’re called in the industry.
This week AT&T also unveiled Project AirGig, a transformative technology from AT&T Labs that could one day deliver low-cost, multi-gigabit wireless internet speeds using power lines. AT&T’s blog post about the broadband over power lines project explains,
“We’re deep in the experimentation phase. This technology will be easier to deploy than fiber, can run over license-free spectrum and can deliver ultra-fast wireless connectivity to any home or handheld wireless device. We designed Project AirGig literally from the ground up to be both practical and transformational. Our initial and ongoing testing at AT&T outdoor facilities has been positive. We expect to kick off our first field trials in 2017.”
“Project AirGig has tremendous potential to transform internet access globally – well beyond our current broadband footprint and not just in the United States,” said John Donovan, chief strategy officer and group president, Technology and Operations, AT&T. “The results we’ve seen from our outdoor labs testing have been encouraging, especially as you think about where we’re heading in a 5G world. To that end, we’re looking at the right global location to trial this new technology next year.”