Charter Communications Inc. is in the latter stages of acquiring Time Warner Cable Inc. (NYSE: TWC) (for roughly $79 billion) and Bright House Networks (for about $10.4 billion). The company has spent the last few months lining up billions of dollars of financing.
The original timetable had those deals closing by the end of this year. The deals are facing heightened scrutiny, however (though not yet anywhere near the level that scuttled Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s proposed acquisition of TWC), and that's slowing the process. Charter CEO Tom Rutledge said he now expects the deal to close sometime in the first quarter.
In the meantime, Charter is simply taking care of business. Rutledge is among the most notable bigWIGs (Wizards of Incremental Growth) in the industry, and he still hasn't lost his touch.
The company is using technology from ActiveVideo (in which it is a co-owner, along with Arris Group Inc. (Nasdaq: ARRS) to update its program guide pretty much at will, whenever doing so might make it easier for customers to use Charter's video services. This is the cloud-based Spectrum Guide, now available through nearly all of the company’s deployed set-tops.
Charter is also becoming flexible with new service bundles at different price points, and is trying to improve customer service.
The result of all of this was that in its third quarter the company added 97,000 customer relationships (compared to 68,000 a year ago), including an increase of residential video subscribers (12,000), a rare feat for any pay-TV provider.
The company is also attracting business customers (a third-quarter increase of 17,000, including 4,000 video subs) with its Spectrum Business plans, introduced last spring.
Charter’s capital expenditures for 2014 were $2.2 billion. It has been spending considerably less this year, and is on track to spend about $1.8 billion. Next year, the company intends to spend $1.7 billion.
Charter highlighted that in the third quarter it spent $119 million less on CPE than in Q3 of 2014, but that had more to do with higher spending last year associated with the company’s transition to digital (which wrapped up in Q4 of 2014).
Moving forward, the company said it is poised to launch its new World Box set-top, first in Reno and St. Louis. The company will evaluate how fast it will roll out the box to other markets based on its experience in those first two. (see Hey New Charter Subs, You're Getting a Worldbox!)
As far as a wireless play goes, Rutledge said there are many ways for Charter to do wireless, with the implication being that the company is still evaluating what those options are.
— Brian Santo, Senior Editor, Components, T&M, Light Reading