Telecom services supplier Dycom sees great opportunities in the merger between Charter and Time Warner Cable and the following digitalization of the infrastructure of TWC.
Charter became one of the largest cable operators in the country when they acquired Time Warner Cable and Bright House earlier this year. Charter representative, Justin Venech had commented earlier that they will be making some changes gradually, and the changes included the digitalization of TWC, a new name, and new packages.
While talking to investors on its second quarter earnings call, Dycom’s president and CEO, Steven Nelson said that, “Charter has been pretty open that their first priority going into the calendar year is to take the Time Warner systems all digital.”
He added, “That requires the deployment of customer premise equipment that we do for Charter and did do for Time Warner. So we think there are some opportunities there. There are also some buildout requirements that Charter committed to with the FCC in terms of deploying plant to new customer locations over a four- or five-year term.”
Dycom is also positive about the new ventures the merger would create. “We think that’s an opportunity. And we do think that just there is a general opportunity, as we are seeing with Comcast, on fresh deployments of fiber to small and medium enterprise and even some larger customers, particularly as Charter’s footprint is very substantial post the closing of the merger,” Nelson said.
Dycom’s 4.8 percent of revenue comes from Charter and it is their sixth largest customer. Moreover, Dycom’s construction and maintenance agreement with Charter in Missouri, Illinois, Texas, Tennessee, Kentucky, and Alabama was recently extended.
Furthermore, Dycom beat the consensus forecast by analysts for the second quarter. Dycom’s estimated earnings per share were $1.56. however, they surpassed the value by 5.1 percent and reported adjusted earnings per share of $1.64 in the second quarter.
President and CEO of Charter, Thomas Rutledge said during their second quarter earnings call that Charter will be starting with the rebranding campaign for both Bright House and TWC in the fall. Charter’s two-way Spectrum Guide video product will also be provided to TWC subscribers in big cities starting in the middle of next year. By the end of this year, the rollout of Spectrum Guide will be completed across Charter’s legacy footprint, and by 2018, the entire footprint will be completed.