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Mobile an 'extension' of Charter's broadband biz, CFO says

Charter Communications posts separate mobile numbers to keep the financial markets apprised of its performance, but, strategically speaking, the operator views it as a piece of its overall broadband business.

"It's really just an extension of broadband, and broadband's been a profitable product for us," Chris Winfrey, Charter's CFO, said Monday at the JP Morgan Technology, Media and Communications Conference. "Mobile's going to help it continue to be more profitable by having more customer relationships and by saving customers more money along the way … The reality is that we don't look at [mobile] as a single product."

Charter only sells Spectrum Mobile to home broadband customers, but mobile is now part of every sales opportunity across all channels – in retail stores, during inbound calls, online, and even as a retention tactic – company CFO Chris Winfrey says.  
(Image source: Charter)
Charter only sells Spectrum Mobile to home broadband customers, but mobile is now part of every sales opportunity across all channels – in retail stores, during inbound calls, online, and even as a retention tactic – company CFO Chris Winfrey says.
(Image source: Charter)

Charter's mobile service, Spectrum Mobile, is anchored to an MVNO agreement with Verizon, and currently complemented by Charter's Wi-Fi network.

Charter only sells Spectrum Mobile with its home broadband service, but mobile is now part of "every single sales conversation that we have," whether that is for inbound calls, at Charter's brick-and-mortar stores or via its digital/online channels, Winfrey said.

Meanwhile, Charter's mobile piece of the puzzle continues to show much promise even when it is viewed on a standalone basis. Charter, which launched Spectrum Mobile to all its markets in the fall of 2018, added 300,000 mobile lines in the first quarter of 2021, extending its total to 2.67 million. Charter's mobile revenues climbed 90.7% in Q1, to $492 million.

Back to the future

Winfrey said Charter views mobile similarly to how the cable operator viewed its original entry into the home phone market many moons ago – as a way to snare share with money-saving bundles.

"I think we have a long runway in front of us for our total connectivity products to be able to increase the dollars per household," he said. "At its peak, you could almost count as clockwork that the [cable] voice subscribers would be about half of broadband. If it hadn't been for mobile substitution, that percentage and those numbers were continuing to increase. So, I think our opportunity is at least that."

For those keeping score, Charter ended Q1 2021 with 27.35 million residential broadband customers. So, half that figure would be roughly 13.97 million.

"We would argue that it's one and the same," Winfrey said of broadband and mobile. "And shouldn't all of your broadband customers want to have Internet connectivity in a ubiquitous, converged way? It's a pretty attractive way to grow."

Winfrey also reiterated that Charter intends to construct its first radio access network powered by CBRS spectrum in one of the operator's "larger markets" by the end of 2021 and into early 2022. Charter will first roll it out as a full-scale employee trial before activating it with paying customers, and use that as a template of sorts as CBRS is rolled out to more markets. Charter will focus those buildouts on high-traffic areas with the greatest penetration of Spectrum Mobile.

"In a weird way, the more penetrated way are on mobile the more attractive the CBRS deployment becomes, because it gives us more offload opportunity," he said.

But Charter's not ready to spill the beans on where that initial full-scale CBRS market deployment will take place. Based on trial activity, possible candidates include Orlando, Florida; Dallas; Los Angeles; New York City; Denver; and parts of North Carolina.

Charter has already asked the FCC to approve test transmissions in the 3.5GHz CBRS band for about a dozen different cities where it bid for and won spectrum licenses.

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— Jeff Baumgartner, Senior Editor, Light Reading

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