Time Warner Cable took a hit from a weak economy and growing competition from phone companies in the fourth quarter as subscriber growth slowed.
Time Warner Cable, the second largest cable operator in the U.S. behind Comcast, met financial expectations on Wednesday for the fourth quarter, but it added fewer subscribers during the quarter.
CEO Glenn Britt cited a weak economy and growing competition from phone companies AT&T and Verizon Communications.
The cable operator only gained about 49,000 new lines for a total of 34.2 million during the quarter. And basic video subscriptions decreased by 197,000, to 13.1 million. This drop was attributed to customers ending their service, but was also due to the fact that Time Warner Cable sold some properties.
Even though the company saw subscriptions slow and even decline in some areas, it still managed to increase its revenue, mostly due to higher prices. In video, it increased revenue by about 4 percent to $2.65 billion. Revenue for its high-speed data service also increased 11 percent, to $1.08 billion. And voice revenue increased 29 percent, to $435 million.
Meanwhile, Verizon Communications, which competes head-to-head with Time Warner in several markets, including New York City, had its best quarter yet in terms of signing up new Fios broadband and TV subscribers. For the fourth quarter, Verizon added 303,000 Fios TV customers and 282,000 Fios Internet customers. Verizon ended the year with 1.9 million Fios customers, doubling its base in 2008.
AT&T, which also sells broadband and TV service, also had a strong quarter. It added a total of 264,000 new TV subscribers in the fourth quarter, up from 232,000 added in the third quarter of 2008. The company now has more than 1 million subscribers for this service.
AT&T's U-Verse broadband service also helped push growth in the company's IP data services. In total, AT&T grew its consumer IP data revenue, which includes broadband and AT&T U-Verse services, by 21.4 percent.
Time Warner Cable also wrote off a big portion of its investment in the high-speed wireless network being built by Clearwire. The company took a noncash impairment of about $367 million on its $550 million investment. The company expects to roll out wireless service with Clearwire in at least one city in 2009.
Meanwhile, Time Warner Cable's parent company, Time Warner, also reported a loss of $16.03 billion for the fourth quarter of 2008, compared with last year's profit of $1.03 billion. Much of the loss came from $24.2 billion in writedowns, a big portion of which came from the cable operator.