Time Warner Cable Inc.
) board of directors has decided to raise its share repurchase
authorization to $4 billion immediately. This decision reflects
management's confidence on the company's future growth. However,
the timing of share repurchase will be based on suitable market
condition. Time Warner cable currently has a Zacks Rank #3
In the U.S., cable operators are facing fierce competition
from telecom service providers.
Verizon Communications Inc.
) are quickly gaining market share from cable MSOs by offering
fiber-based TV and other high-speed broadband services. Online
video streaming service providers, such as
), Hulu.com, YouTube etc., have become a big threat to cable TV
We view the change in Time Warner Cable's business model
positively. As a surviving strategy, management has decided to
adopt a four-edged approach: (1) rebrand itself as a major
broadband service provider for residential customers, (2)
aggressively penetrate the commercial business segment, (3)
change in marketing strategy like product segmentation and (4)
significant enhancement of shareholders' wealth, such as
systematic share repurchase and increase in dividend
Time Warner Cable is concentrating on broadband and digital
phone services, especially for the Business segment, which has
become a major growth driver for the company. It has undertaken a
massive "Ethernet Everywhere" strategy and is boosting cloud
computing services including delivering IP-based Ethernet
services over fiber, where the company has already laid its
optical cables. The company also used high-speed DOCSIS 3.0
technologies over its extensive hybrid fiber/coax plant.
TIME WARNER CAB (TWC): Free Stock Analysis
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