Charter Hints at Docsis 3.0

Charter Communications Inc. (Nasdaq: CHTR) centered its fourth-quarter story on the success it’s having with digital voice services, while also sneaking in a nugget about its plans for the turbo-charged Docsis 3.0 platform.

“We plan to test next-generation Docsis 3.0 in the second half of this year,” said CEO Neil Smit during today's earnings call with reporters and analysts. He later noted that deployments likely won’t follow until 2009. (See Charter Posts Q4.)

Docsis 3.0 has become a regular talking point on cable MSO earnings calls, albeit with limited details on which markets will see it first, or what speeds and pricing consumers should expect.

On Tuesday, Mediacom Communications Corp. (Nasdaq: MCCC) said it would begin Docsis 3.0 lab tests this year. (See Mediacom Adds $30M to '08 Capex.) Comcast Corp. (Nasdaq: CMCSA, CMCSK), which has positioned itself the most aggressively in terms of the next-gen platform, has said it plans to deploy a Docsis 3.0 infrastructure to up to 20 percent of its footprint by year-end. (See Comcast Closes In on 100 Mbit/s.)

In terms of other advanced services, Charter execs confirmed the company now offers more than 150 high-definition “choices,” and expanded a bit on its plans involving switched digital video (SDV).

Charter expects to deploy the technology “significantly” over the course of 2008, with a majority of its footprint covered by the technology by the end of 2009. (See Charter Charts First SDV Course .)

VOIP milestone, sub update
For the quarter, Charter’s base of revenue generating units (RGUs) rose 199,100, a 19.9 percent rise over the year-ago period. It added 835,900 RGUs for 2007, a 15.3 percent increase over 2006.

Broken down further, Charter added a record 155,300 telephone customers in the fourth quarter. Charter also announced today that its voice subscriber totals had eclipsed the 1 million mark. (See Charter: 1M VOIP Subs.)

Bundled phone services “continued to fuel growth,” Smit said, adding that bundled penetration reached 47 percent, versus 40 percent a year earlier. “We believe our markets reach a turning point when they achieve double-digital telephone penetration, and about half our phone footprint has attained or surpassed that threshold.”

The MSO also signed on 50,500 high-speed Internet customers in the fourth quarter, extending its total to 2.68 million. For 2007, the average revenue per unit (ARPU) rose 4.8 percent versus 2006, which the company attributed to “content improvements” and speed upgrades.

But, like other MSOs in the sector, save for the rare exception, Charter’s analog video subscriber base continued to shrink -- by 66,400 in the fourth quarter, giving it a total of 5.21 million.

Losses in that category were offset partly by digital gains. Charter added 59,700 digital video subs in the quarter, extending its total to 2.92 million. Despite continued analog losses, Charter did manage to see video ARPU rise 5.8 percent year-over-year, citing advanced services and rate adjustments.

Charter posted fourth-quarter pro forma revenue of $1.54 billion, a 10.6 percent increase attributed primarily to voice and high-speed Internet service growth. That was not enough to avoid net loss in the period of $468 million ($1.27 per share), widened from a net loss of $396 million ($1.08) a year earlier.

— Jeff Baumgartner, Site Editor, Cable Digital News

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