{"id":640808,"date":"2013-01-31T17:00:39","date_gmt":"2013-01-31T22:00:39","guid":{"rendered":"http:\/\/gigaom.com\/?p=606303"},"modified":"2013-01-31T17:00:39","modified_gmt":"2013-01-31T22:00:39","slug":"time-warner-cables-modem-fee-cost-it-today-but-should-pay-off-tomorrow","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/640808","title":{"rendered":"Time Warner Cable\u2019s modem fee cost it today, but should pay off tomorrow"},"content":{"rendered":"

Remember that $4 per month modem fee time Warner Cable implemented — the one that had Wall Street all excited<\/a> about its potential boost to revenue? Well, it seems that people were miffed enough about the charge to affect how many subscriptions the nation’s second largest cable company added during the quarter — 75,000, which is less than the 129,000 Wall Street anticipated. But before feeling vindicated, know this — the fee generated about an extra $1.83 per month from each subscriber.<\/p>\n

And in the long term, analysts think it will pay off for the cable giant, which reported financial results Thursday<\/a>. Especially as consumers find themselves stuck between Time Warner Cable’s modem fee and slower DSL-based service offering<\/a>. From an analyst note issued today by Stifel Nicolas:<\/p>\n

\n

Residential PSUs<\/a> declined by 20,000 versus our estimate of +48,802, primarily due to weaker-than-expected HSD [high speed data] adds. We believe that the company\u2019s residential HSD net adds (+75,000 vs. estimate 129,000) were negatively affected by higher-than-expected churn as a result of the company\u2019s recent introduction of a modem fee (~$4). While the \u201cfallout\u201d from the modem fee could spill over into 1Q13 results, we don\u2019t expect this to be a long-term issue for the company\u2019s residential HSD product. In fact, the modem fee contributed ~3\/4 (~$1.83) to the 6.3% increase in HSD ARPU during Q4.<\/p>\n<\/blockquote>\n

So there you have it. Customers clearly are put off by the modem fee, but it won’t last. Likely because they don’t really have another option for broadband in many areas. Yet, plenty of people are still unconvinced<\/a> that ISPs engage in anti-competitive behavior in the broadband market.<\/p>\n

\"\"<\/p>\n

<\/a><\/p>\n

Related research and analysis from GigaOM Pro:<\/strong>
Subscriber content. Sign up for a free trial<\/a>.<\/p>\n