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Time Warner Cable Inc. (TWC - Analyst Report), the second-largest cable MSO (multi service operator) in the U.S., has decided to expand its data center base in Centennial, Colo. The project will involve an investment of $85 million. The new national data center is expected to enhance Time Warner Cable’s storage and application facility by 75%.

The 170,000 square feet center holds 1,600 million of equipment and is capable of supporting 6,400 kilowatts of critical load. The cable MSO has already allocated 70 employees to the new facility and will have 400 staff, once the data center is fully operational.  

Some of the major functions of the data center include supporting 70 million residential emails, handling the billing records of 15 million customers and backend operations of Time Warner Cable’s employees.

The new data center is second of its kind after the company opened a similar center last year in Charlotte, NC at a cost of around $82 million. The two data centers will complement each other and will provide uninterrupted services to residential and business customers.

Major cable MSOs are expanding their data center bases to meet the high demand of video and IP (internet protocol)-based services. Data centers allow MSOs to manage huge amount of data and contents from a central location. Time Warner Cable’s main rival, Comcast Corporation (CMCSA - Analyst Report), has been continuously expanding its data center base and has also set up facilities at Atlanta, Philadelphia, Chicago and North Carolina.

Post completion, the new data center is expected to generate around $11 million in revenues. The new facility will also provide Time Warner Cable with the flexibility to deploy digital products and services at a much faster pace, thus enriching the customer experience.

Time Warner Cable carries a Zacks Rank #3 (Hold). Among the other companies in the industry, Telus Corp. (TU - Analyst Report) and Charter Communications Inc. (CHTR - Analyst Report) with a Zacks Rank #2 (Buy), is a better option for the investors.

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