Charter Keeps Wireless Options Open
Neil Smit, Charter's president and CEO, addressed the wireless question this morning during the company's first-quarter conference call. Wireless has become a hot topic in cable circles after three major MSOs entered a wide-ranging WiMax and 3G deal with the Clearwire LLC (Nasdaq: CLWR) and Sprint Corp. (NYSE: S) consortium, and Cablevision Systems Corp. (NYSE: CVC) set its sights on deploying a WiFi mesh system in all systems over the next two years. Cox Communications Inc. , meanwhile, is expected to build out a wireless system of its own using spectrum won in the 700 MHz auctions. (See Cable Plays Clearwire Card, Cablevision High on WiFi, and The Great Cable Spectrum Speculation.)
Regarding wireless, "we will continue to test our way into it, and try to determine what offering -- whether it's voice or broadband or any other offering the consumer accepts well," Smit said. "We are working [on] some different relationships."
He added that Charter "will be running some tests" related to the Sprint-Clearwire connection. "We are looking into that, but at this point, we have not been approached... as to a partnership."
That's much less of a potential commitment to the new Clearwire than the one given last Wednesday by Mediacom Communications Corp. chairman and CEO Rocco Commisso, who said "it's just a matter of time before we get involved, as opposed to whether we will get involved or not." (See Mediacom Eyes Clearwire.)
Charter, meanwhile, appeared much more committed to Docsis 3.0 and to deploying switched digital video (SDV) to free up spectrum for other services.
Smit reiterated that Charter will begin testing Docsis 3.0 later this year, referring to a new CableLabs platform that bonds together multiple channels to produce shared Internet speeds in excess of 100 Mbit/s. Just last week, CableLabs awarded first-ever certification stamps to modems based on the emerging spec. Charter today is in the process of widely rolling out a 16 Mbit/s (downstream) single-channel "Max" tier. (See Modems, CMTSs Break Docsis 3.0 Barrier and Charter Launches 'Max'.)
Charter also expects to have SDV deployed "across a fairly wide basis" by year's end, Smit said. The MSO is presently testing it out in Los Angeles using gear from BigBand Networks Inc. (Nasdaq: BBND). (See Charter Charts First SDV Course .)
It's expected that Charter will use SDV to create headroom for high-definition television services. Today, Charter offers 200 HD "viewing choices," referring to a mix of linear hi-def channels and HD-VOD content. On the HD-VOD side, the MSO expects to offer up to 500 hours of HD-VOD by the end of 2008.
Phone-adds highlight Q1
On the financial front, Charter said first-quarter revenues rose 10.5 percent to $1.6 billion, thanks in part to strong voice service signups. Charter posted a first-quarter loss of $358 million (97 cents per share), narrowed from a year-ago loss of $381 million ($1.04 per share) a year earlier.
Charter added 125,700 voice subs in the quarter, extending its grand total to 1.08 million, and signed up 102,800 digital video subs, giving it 3.02 million. It also added 85,700 cable modem subs, giving it 2.76 million.
Despite gains in new service categories, Charter lost 11,900 basic video subs in the first quarter, with the majority leaving from the MSO's lower-end "limited basic category." Basic sub loss was less than some analysts expected, but left the MSO with 5.208 million in this bread and butter product category.
Charter shares were down $0.02 (1.68%) to $1.17 in afternoon trading on Monday.
— Jeff Baumgartner, Site Editor, Cable Digital News