Charter will build out its CBRS spectrum, but the pace is tempered by the cable op's 'symbiotic' MVNO relationship with Verizon, said CEO Chris Winfrey. He also provided an update on Charter's HFC upgrade and his thoughts on AI.
Charter intends to deploy CBRS in every area where it has purchased spectrum. But the cable operator remains in no rush to proceed with those deployments, in part because of the benefits it is getting from its long-term MVNO relationship with Verizon.
"We will fully deploy CBRS everywhere that we've purchased that spectrum," Chris Winfrey, Charter's president and CEO, said Wednesday at the Goldman Sachs Communocopia + Technology Conference when asked to provide an update on the operator's wireless network strategy.
Charter has initially rolled out CBRS radios in Charlotte, North Carolina, and is in the process of deploying them in an additional but still unnamed market. The general plan is for Charter to deploy CBRS in concentrated, high-traffic areas where it can best offload its MVNO costs and get a return on its CBRS deployment.
Charter currently offloads about 87% of its wireless traffic – primarily via its deployment of Wi-Fi hotspots. Winfrey estimates that about half of Charter's deployed Wi-Fi devices are "advanced" – meaning they support the Spectrum Mobile SSID. The company believes it will be able to offload about one-third of its MVNO traffic using a combination of Wi-Fi and CBRS.
"We have significant room to grow in residences and businesses and even some outdoor places for Wi-Fi," Winfrey said.
Winfrey said Charter is in no rush to deploy CBRS in part because the incentive to push forward faster is tempered by Charter's "symbiotic relationship" with Verizon. He doesn't see the need for any major changes from Charter's current MVNO agreement.
"We're not in a race [to deploy CBRS] because of the setup we have today, and we like the set-up that we have today," he said. "Interestingly, the more lines we have, the better the return on investment for the [CBRS] build. The return of deploying that spectrum and deploying these small cells just continues to get better."
Charter's no-rush attitude about CBRS hasn't changed much in more than a year.
However, Winfrey noted that Charter is currently focused on other capital projects, including its hybrid fiber/coax (HFC) upgrade plan and rural buildout initiative.
Winfrey said the operator is finishing up phase one of its HFC upgrade project, which is focused on an upstream-enhancing high-split upgrade on DOCSIS 3.1 networks that covers 15% of Charter's HFC footprint. That part of the upgrade will enable speeds of 2 Gbit/s down by 1 Gbit/s up.
Phase two, which includes a distributed access architecture and a virtual cable modem termination system (vCMTS), is on tap. It will cover 50% of Charter's HFC footprint and enable speeds of 5 Gbit/s down by 1 Gbit/s up.
The third and final phase, covering 35% of Charter's footprint, will be a full upgrade to DOCSIS 4.0 and speeds of 10 Gbit/s down by 1 Gbit/s up. Charter's HFC network upgrades will also support remote optical line terminals (OLTs) that allow the operator to deploy fiber-to-the-premises (FTTP) where it's needed.
Bullish on rural, disciplined about BEAD
Charter's rural build has focused on state subsidies and money from the Rural Digital Opportunity Fund (RDOF). Penetration rates and average revenues per user (ARPU) from Charter's rural builds are coming in higher than expected thanks in part to the bundling of other services, including video, mobile and even wireline phone, Winfrey said.
Those builds should put Charter in position to gain more business as some of today's rural areas later become suburban areas that support additional homes per mile and the ability to extend those networks to adjacent areas.
"It's how cable was built in the '80s. It's not a brand new concept," Winfrey said. "I think well after the capital deployment has actually occurred, the fruit of what we've done and the ability to go service additional communities and passings will continue to grow a very low incremental cost. It [Charter's rural build] can provide a boost of growth for many years to come."
Charter's rural strategy will include participation in the $42.45 billion Broadband Equity, Access, and Deployment (BEAD) program.
But the BEAD potential opportunity is "a little trickier," Winfrey said, noting that the program comes with more cumbersome regulations than what Charter saw with RDOF and some state grants.
"I do think it's going to require discipline on our part, on a state-by-state basis, based on how those regulations ultimately are applied," Winfrey said. But I'm still, despite that, excited about BEAD under the right circumstances."
AI is a reality
The initial part of Wednesday's chat centered on artificial intelligence, given that it was taking place soon after Apple introduced the iPhone 16.
"I think AI is very much reality," Winfrey said. "The question is, how fast is it really going to come, and how fast is it going to be deployed."
Charter is currently using AI and machine learning in various service functions, including customer interactive voice response (IVR) and chat systems. AI is also helping Charter's agents make better service recommendations to customers.
Charter is exploring its potential role in edge computing systems that can help underpin AI services and applications. The general idea is to support third-party, AI-focused gear at Charter's low-latency headends and hubs. Winfrey said Charter would be in a position to provide more room for that as the company migrates to software-based vCMTSs and eliminates older chassis-based, integrated CMTSs.
"We are clearing out vast swaths of space inside of our hubs and headends that are ready to go to put in third party equipment as needed...when the edge compute demand and product really results," Winfrey said.
But he stressed that building out AI capabilities is not part of Charter's current business plan as the future need for them remains "a little bit hard to define."
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