TW Cable to upgrade L.A. system

Time Warner Cable is planning major upgrades to its Los Angeles and New York operations.

The cable giant, which is resisting a takeover attempt by Charter Communications, said Thursday that it would be substantially boosting Internet speeds and its video-on-demand platforms. The improvements in Time Warner Cable’s two biggest markets are part of a three-year plan to upgrade its systems across the nation.

“We’ll triple Internet speeds for customers with our most popular tiers of service, add more community Wi-Fi, dramatically improve the TV product and, perhaps most importantly, we’ll set a high bar in our industry for differentiated, ex- ceptional customer service,” Time Warner Cable Chief Executive Rob Marcus said.

On a call with analysts to discuss the company’s fourth-quarter results, Time Warner Cable officials said its capital spending would be about $3.8 billion annually over the next three years, with much of that money used to improve its service.

In Southern California, the first two areas to be overhauled are West Hollywood and Costa Mesa.

Officials also said the company was converting its network in Southern California to all digital, which means any customers who have no cable box and connect directly to a wall outlet will need to get a set-top adapter to receive TV service. The move will free up bandwidth for faster broadband, Time Warner Cable said.

The pay-TV distributor said it also would make its video-on-demand platform easier to navigate and would boost its library to about 75,000 hours of content. Time Warner Cable will also start to offer advanced set-top boxes that can record as many as six channels at the same time, officials said. Currently, most customers can record only two channels.

For the quarter that ended Dec. 31, Time Warner Cable had better-than-expected results. The company, which has 14.4 million customers overall and 11.2 million video subscribers, said profit jumped 5% to $540 million. Revenue increased about 2% to 5.6 billion.

The company continued to lose video subscribers, primarily as a result of its ugly fight with CBS last summer. For the fourth quarter, Time Warner Cable lost 217,000, but that was a smaller decline than in the third quarter, when 300,000 left.

Marcus reiterated that Charter’s offer of $37.4 billion, or $132.50 a share, for Time Warner Cable is insufficient. Including debt, Charter’s offer is valued at $61.4 billion. Marcus said an offer of $160 a share, of which $100 would be in cash and $60 in Charter stock, would bring Time Warner Cable to the table.

“That’s a firm position,” he said.

Charter, which has been critical of Time Warner Cable management and its operations, is trying to persuade Time Warner Cable shareholders to back its unsolicited bid. It has also approached Comcast about buying some Time Warner Cable systems should it succeed in its acquisition plans.