Time Warner Cable (TWC) will be offering usage-based internet plans to all their current customers except Hawaii by the end of December, announced CEO Glenn Britt. The cable giant had begun rolling out the usage based initiative in Texas this past February, with some level of success.
Usage based plans are not mandatory—TWC simply wants to offer a way for low data internet users to save money and only pay for what they need. Basically, subscribers who choose this option can download up to 5GB per month. Overage data charges are $1 per GB, maxing out at $25 per month.
Britt contends that TWC’s strategy isn’t about looking for new ways to wring out extra revenue, but to offer more options to light internet users who don’t want to pay more for what they won’t use: “I don’t like the idea of [data] caps. That’s a negative connotation. What we think is that we should always offer unlimited service but that we should offer a choice of a lower price with the consumption to match in for people who don’t need unlimited. So that’s quite different than what other people have talked about,” Britt said.
TWC has added 400,000 broadband only customers in the last the year. However, their pay TV subscriber rates have remained flat, which worries investors and analysts. It seems that in the zeal for cost cutting, most households see internet service as far more essential that cable TV. It doesn’t help the bottom line of pay TV providers when plenty of people think streaming content online is a good enough entertainment alternative. On top of that, broadcast networks are continuing to raise their content fees, which is passed down to the consumer in the form of higher bills, which can then trigger more cord cutting.
Still, the growth in internet subscriptions is a bright spot for the nation’s 2nd largest cable company. As long as TWC continues to offer more options and is willing to continuously upgrade their network, subscription levels for their internet service should continue to grow for years to come.