Time Warner Cable Inc. (TWC), the second largest cable multi-service operator (MSO) in the U.S., has recently become the first Ethernet service provider in North America to receive certification for all six of the Metro Ethernet Forum (:MEF) 's Carrier Ethernet 2.0 business service classes. This reflects the company’s relentless focus on the metro Ethernet business.
Apart from Time Warner Cable, only two Ethernet service providers, namely, Philippine Long Distance Telephone Co. and PT Telekomunikasi Indonesia Tbk. (TLK), have gained official Carrier Ethernet 2.0 recognition for all the six retail business service standards.
However, these companies primarily function as telecom operators whereas Time Warner Cable is a major cable TV operator. Currently, Time Warner Cable has a Zacks Rank #2 (Buy).
In the U.S., large cable TV operators and telecom companies such as, Comcast Corp. (CMCSA), AT&T Inc. (T), Fibertech Networks LLC and some other vendors are also emphasizing on metro Ethernet. However, none of them have received Carrier Ethernet 2.0 certification for all six standards.
Metro Ethernet service is part of Time Warner Cable’s Business Services division. This division has become a major growth driver for all cable MSOs. In 2013, the company generated $2,312 million revenues, up 21.6% year over year.
Time Warner Cable has undertaken a massive "Ethernet Everywhere" strategy and is boosting cloud computing services including delivering IP-based Ethernet services over fiber, where it has already laid its optical cables and has used high-speed DOCSIS 3.0 technologies over its extensive hybrid fiber/coax plant.
The company decided to acquire a regional fiber-optic network company, DukeNet Communications LLC, for $600 million in cash. The deal is expected to close by the first quarter of 2014, subject to customary regulatory approval. DukeNet has an extensive fiber-optic network of more than 8,700 miles across North and South Carolina and five other states in southeastern U.S.
DukeNet offers data and high-capacity bandwidth services to wireless service providers, data centers, government and enterprise customers. The proposed acquisition of DukeNet is likely to strengthen the Business Service division of Time Warner Cable.