Time Warner Cable 2006 Annual Report Download - page 3

We believe these new systems represent
considerable opportunity. Due to these
transactions, our company is not just larger,
but also stronger.
Already, we’ve made a good deal of progress
in these systems. We completed a large
number of infrastructure projects that are
critical to our ability to operate the new
systems the “Time Warner Cable way” and
offer our advanced services. This work will
continue throughout the year.
Extending Momentum into 2007
We plan to extend our strong momentum
into 2007 by concentrating on execution in
both our legacy and acquired systems.
We’ve executed the same straightforward
strategy for some time now. It has three
simple elements: continual innovation,
effective marketing and improving customer
care. To date, we have had impressive suc-
cess with this strategy, and we believe that
we have positioned the company to continue
to thrive and, as a result, deliver superior
returns to our shareholders.
Among the many projects and innovative
changes we’re driving this year, I want to
highlight two, Start Over and our Sustainable
Network strategy, which I expect will be
particularly meaningful to our continuing
competitiveness.
We invented Start Over, like most of our new
products, in response to an unmet customer
desire. In this case, it was a desire for time-
shifting of television programs. Start Over
allows our digital subscribers, whether they
have a DVR or not, to press a button on
their remote control and instantly restart a
program that’s already in progress. It has
rapidly become highly popular among our
customers. We plan to expand the availability
of Start Over, which we offer free to our
digital video customers, in many of our
systems in 2007.
Customer needs also have driven our
Sustainable Network strategy, which
includes a number of fundamental technical
improvements to our network. Digital
Simulcast, which we plan to implement in
all of our legacy systems by the end of this
year, will meet our customers’ demand for
improved picture quality. Switched Digital
Video is an innovation that can vastly
increase the amount of content available
to our customers. And, importantly, it will
enable us to respond to the rapidly growing
demand for more high-definition content.
We expect to launch Switched Digital Video
in many of our systems this year.
Start Over and Switched Digital are great
examples of Time Warner Cable’s brand of
innovation. This innovation differentiates our
services, and it builds subscriber loyalty.
Ultimately, it’s at the core of how we grow
our revenues sustainably and profitably.
In marketing, we will continue to drive bundled
services—that is, offerings that contain some
combination of our video, high-speed data and
voice products. To date, this strategy has
increased our subscription revenues and
reduced our customer churn. As we exited
2006, 42 percent of our customers took a
bundled offering. This year, we expect that our
bundles will become even more creative—
we’ll use different components to build pack-
ages that target specific groups of customers
to segment the marketplace more efficiently.
During 2007, we also will complete the
upgrades of the systems we acquired from
Adelphia and Comcast. By the end of the
year, we plan to offer our Triple Play
bundle of video, high-speed data and
voice in all of them.
Glenn Britt
President & Chief
Executive Officer