Charter is focusing on convergence as it debuts 'Life Unlimited,' an initiative that features price guarantees and new pricing plans for subs who combine the operator's home broadband service with mobile and/or video.
Looking to shore up its convergence angle, Charter Communications has launched guaranteed pricing on new plans for customers who bundle home broadband with Spectrum Mobile or the operator's video services.
Tied into a broader "Life Unlimited" rebranding initiative, Charter is pitching home broadband starting at 500 Mbit/s for $30 per month and 1-Gig service for as low as $40 per month, when each is bundled with two lines of Charter's Spectrum Mobile service and/or Charter video services, including a pay-TV option anchored by the operator's relatively new Xumo Stream Box from Charter's national streaming joint venture with Comcast.
Charter is kicking off that offering in earnest on Tuesday, September 17. The operator said it will continue to make available Spectrum One, a promotional home broadband/mobile combo that Charter introduced in the fall of 2022. However, Spectrum One is now affixed with a higher starting downstream speed of 500 Mbit/s (up from 300 Mbit/s originally), with one free unlimited mobile line included for a year.
Current Charter subs on Spectrum Internet (300 Mbit/s) and Spectrum Internet Ultra (500 Mbit/s) tiers will see free, automatic downstream speeds increases to 400 Mbit/s and 600 Mbit/s, respectively.
Charter is assembling this new option as it seeks ways to return to subscription growth and put customers into attractive service bundles. Charter has had much success with mobile (adding 557,000 mobile lines in Q2 2024 for a total of 8.80 million), but has been losing both broadband and pay-TV customers in recent quarters.
Not a price cut
MoffettNathanson analyst Craig Moffett said Charter's latest move isn't a price cut, but it does amplify the company's convergence strategy as competitors like AT&T, T-Mobile and Verizon attempt to do the same through deals and partnerships that aim to back their mobile platforms with more extensive access to fiber networks. Moffett believes that cable operators such as Charter hold an advantage because they can offer a solid converged offering across their footprints while their competitors can't.
Life Unlimited "should be seen as leaning into convergence" as Charter beefs up the concept of connectivity (along with entertainment) in the home and on the go, Moffett said in a research note (registration required).
He added that the approach "should be viewed as an entirely new product pricing category, not just a pricing plan."
Moffett did question how this new initiative will help Charter drive broadband subscription growth and slow the overall decline of pay-TV. But he believes it will give Spectrum Mobile a boost as the bundled offer keeps pricing lower than other alternatives in the market.
"What they will do is elevate their converged broadband/mobile offers to center of the plate," Moffett said.
Update: New pricing and bundles also aim to blunt FWA competition
New Street Research analyst Vikash Harlalka called Charter's decision to pair free speed upgrades with price locks and improved customer service "a step in the right direction" as it marks a return to the cable operator's earlier focus on using lower pricing to drive higher gross adds.
He also believes Charter's new pricing plans are aimed at countering FWA competition.
Harlalka also points out in his research note that Charter's two-year price requires subs to sign up for a double-play package that includes home broadband and a video package or two paid, unlimited mobile lines. For the three-year price lock, customers will need to take a triple package with broadband, video and two paid, unlimited mobile lines.
Under Charter's new pricing, Harlalka adds, Charter customers will continue to pay $90 per month in year two, saving $50 per month compared to Spectrum One.
"Broadband pricing will reach rack rate sooner under Spectrum One whereas under new pricing, broadband price will gradually increase and will take a few more years to reach rack rate. In the long run, pricing under the two plans will converge," he added.
Commitments to customers
Alongside the new bundling option, the Life Unlimited branding initiative brings forth several customer service commitments, including:
A pledge to fix any service disruption quickly, including dispatching a tech the same day if the customer requests it prior to 5 p.m. their time, and to offer a credit for the full day if a neighborhood experiences an outage that lasts more than two hours.
A transparency pledge to notify affected customers within 15 minutes of identifying an outage in a neighborhood and provide an estimated restoration time. Charter said it is also shifting to whole dollar pricing and will ban annual contracts for any residential services.
A promise to provide 24/7 US-based customer service and supply a tech for a professional install the same day or the next day, with a 30-day money back guarantee on any services. Charter will also refund money spent on a mobile device if the customer is not satisfied within the first 14 days.
"This initiative is about so much more than a new look and feel for the Spectrum brand; it is a fundamental shift in how we operate, with the goal of building more trust with our customers," Charter VP and Chief Marketing Officer Sharon Peters said in a statement.
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