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TWC to Boost Wi-Fi Deployment

Zacks Equity Research

Higher demand for smartphones and tablets coupled with increased usage of social networking sites, which allow users to always stay connected with each other while on the move, has induced Time Warner Cable Inc. (TWC) to double its Wi-Fi hotspot deployment by the end of 2013 from 10,000 Wi-Fi hotspots last year.

Time Warner Cable has deployed lesser number of Wi-Fi access points in New York City; Charlotte, N.C; and Kansas City compared with Wi-Fi installations in Los Angeles during the same period last year.      

The Wi-Fi comes for free to Time Warner Cable customers using cable modem to access internet. Increased deployments of Wi-Fi hotspot will not only drive value for its customers but will also offer multiple platforms for data usage, thereby improving data traffic at lowest possible cost.    

Recently, Time Warner Cable declared its fourth quarter 2012 financial results where the company added 75,000 residential High-Speed Data subscribers, driving its high-speed data revenues by 17.2% year over year to $1,346 million.

Such robust growth in data revenues has induced Time Warner Cable to enhance the quality of its network service by spending nearly $17 million to roll out more than 20,000 Wi-Fi hotspot connections by the end of 2013.

Moreover, in 2012, Time Warner Cable together with other cable MSOs like Comcast Corporation (CMCSA), Cablevision Systems Corporation (CVC), Bright House Networks and Cox Communications entered into long-term agreements to share each others’ Wi-Fi hot spots in 50,000 public locations, thereby surpassing AT&T’s (T) 30,000 Wi-Fi access points.

So it is highly anticipated that we will see such rapid increase in Wi-Fi hot spots by telecom and cable companies going forward as the demand for data usage continues to rise. Moreover, huge spectrum crunch in the U.S. will further bolster the growth of Wi-Fi access points going forward.

Currently, Time Warner Cable has a Zacks Rank #3 (Hold).

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