May 16, 2019
Charter is wielding Spectrum Mobile to help the MSO gain and retain broadband subscribers, but it's proving to be a particularly handy tool to dislodge consumers who are taking DSL services.
Charter is using that mobile product, launched last year via its MVNO deal with Verizon Wireless, to go after "otherwise inert" customers who might subscribe to DSL from one of Charter's rivals and to spur them to cancel that service and sign on to Charter's broadband offering, Chris Winfrey, Charter's chief financial officer, said Thursday at the JP Morgan Global Technology, Media and Communications Conference in Boston.
"We think this not only accelerates share shift [for home broadband] over time, but expands the broadband market over time, as well," he said.
Using mobile to drive broadband growth plays into Charter's belief that there's still plenty of runway left with respect to broadband subscriber growth. Broadband service penetration in Charter's footprint currently hovers at about 50% today. The overall US broadband market is about 80% penetrated.
"We think we're underpenetrated [with broadband] relative to the opportunity," Winfrey said.
Charter added 398,000 residential broadband subs in Q1 2019, extending its total to 24.02 million. Charter has added about 310,000 mobile lines since launching Spectrum Mobile, including the better-than-expected addition of 176,000 mobile lines in Q1 2019.
Though offering mobile as a standalone could eventually become a profitable endeavor for Charter, "that's not the reason we got into the business," Winfrey said. "We got into the mobile business because we thought it would enhance our ability to sell cable [services]."
Charter hopes to amp up that capability during the current quarter as it expands a bring-your-own-device option (for both Apple and Android phones) across its retail locations and other sales channels.
"There is pent-up demand there, because we haven't had bring-your-own-device available across all of our sales channels," he said. "Within a matter of weeks we expect to have that fully rolled out. That's just one more piece of the puzzle that allows us to keep on accelerating on that... growth rate."
Winfrey said Charter is also continuing to pursue a small cell deployment strategy that will enable it to offload some traffic that it leases through the Verizon MVNO. Visibility into the network will help Charter determine where the leased traffic is most deeply concentrated and, therefore, where it makes the most sense to deploy small cells.
In addition to using WiFi for small cells, Charter is also looking at using CBRS spectrum and, potentially, spectrum that could become available in the C-Band.
"We're looking at those opportunities really as a way to surgically deploy, but it would be based on payback," Winfrey said.
Charter is also using sheer speeds to sell broadband products.
Download speeds of 200 Mbit/s is the standard starting tier in about half of Charter's footprint, and 100 Mbit/s for the other half of its footprint. Charter also offers speeds up to 1 Gbit/s across its footprint using DOCSIS 3.1, which Winfrey reiterated ended up costing Charter just $9 per home passed for the network side of that upgrade.
Charter, he added, also has a "flexible path" to deliver symmetrical speeds of 10 Gbit/s, with the ability to target those upgrades to areas where competition is the most heated.
— Jeff Baumgartner, Senior Editor, Light Reading
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