Viewing itself now as more of a connectivity provider than a cable company, Charter is scrambling to finish its rollout of DOCSIS 3.1 by year-end so it can offer gigabit service to virtually its entire footprint.
Charter Communications Inc. , the second largest cable and broadband provider in the US behind only Comcast, reported in its second-quarter earnings release Tuesday it now has upgraded at least 60% of its 50-million-home footprint to D3.1 capability. That's up from 45% at the end of March and just 20% at the close of last year as the company continues to rack up impressive subscriber gains. (See Charter Going Gig-Happy in 2018.)
With the support of D3.1 technology, Charter now offers its Spectrum Internet Gig service (which actually tops out at 940 Mbit/s downstream speeds but who's counting) in about 60% of its coverage area after adding a number of markets in the spring quarter. Plans call for extending 1Gbit/s service to almost entirely the rest of its coverage area by the end of December.
Besides rolling out Spectrum Internet Gig, Charter is also doubling its minimum data download speeds to 200 Mbit/s across the nation at no extra cost as it seeks to either catch up to or stay ahead of such broadband rivals as AT&T and Verizon. Speaking on the company's earnings call Tuesday morning, Charter Chairman and CEO Tom Rutledge said the cableco now offers minimum speeds of 200 Mbit/s to about 40% of its footprint.
After years of playing catchup with other major US MSOs, more than 60% of Charter's residential data customers take speed tiers offering at least 100 Mbit/s; more than 80% subscribe to tiers offering at least 60 Mbit/s, the provider said. Currently, Charter offers minimum speeds of 100 Mbit/s to new Internet customers in 99% of its sprawling coverage area.
"We're taking and making our data product better and more competitive everywhere we operate so that we can increase the rate of our growth and take share faster," Rutledge said on the earnings call. "We rolled out 20 million homes passed in the quarter and we're about 60% through our 50 million homes passed in general. So we're really just getting started from a speed marketing activation and implementation perspective. But it appears to be working where we thought it would and we expect to get higher growth rates in the future as a result of having a better product. It's that simple."
Boost your understanding of cable's pioneering virtualization efforts, examine early trials and pilots and look at what comes next. You're invited to attend Light Reading's Virtualizing the Cable Architecture event, a free breakfast panel at SCTE/ISBE's Cable-Tec Expo on October 23 in Atlanta.
These upgrades come as Charter continues to sign up new broadband subscribers by the boatload. The company reported adding 218,000 residential Internet customers in the second quarter, slightly down from 230,000 a year ago but still pretty impressive in a near-saturated market. That represents a gain of more than 1 million subs over the past 12 months.
As a result, the MSO closed June with 23.1 million residential broadband customers. In a sign of the times, it now has nearly 7 million more data subs than video subs as broadband increasingly becomes the dominant business for most US cable operators. (See Charter Still Content With No Content.)
Thanks largely to these sub gains, Charter's residential broadband revenue rose to $3.77 billion in the quarter, up 7.3% from $3.51 billion a year earlier. While that total is still below the $4.36 billion the MSO produced in video revenue for the quarter, broadband is steadily catching up as a revenue generator. And broadband's profit margins are much higher than video's margins, as Rutledge acknowledged on the call.
In a new report produced in tandem with SCTE/ISBE, Heavy Reading spells out what cable operators are doing with fiber now, what they plan to do with it in the future and which challenges are the biggest.
Tune in to Broadband World News Radio on February 14 at 11 a.m. ET / 8 a.m. PT / 4 p.m. UK when John Isch, Practice Director of the Network and Voice Center of Excellence at Orange Business Services, discusses use cases, ROI and misconceptions of software-defined wide-area networks, virtualization and cloud.
Consumers are buying millions of IoT devices, from smart thermostats and security systems to intelligent entertainment setups and furniture. Yet many of these devices remain isolated because home users are uncomfortable connecting them to each other – or even their WiFi. After all, their WiFi network was probably designed only to handle a few laptops, a gaming system and a couple of smartphones. Now, demand on the network is surging and even though you're delivering 100 Mbps to 1 Gbps, that doesn't necessarily mean the broadband power is in the right place or reaches every corner of a home.
Even if WiFi coverage is sufficient, typing is not on trend. Voice is far more natural, easier and faster. Using a TV keyboard is archaic when more and more households have access to cloud-based voice services, like Amazon Alexa. This webinar will explore how service providers can create a comfortable, truly smart home for consumers – simultaneously driving up margin and loyalty.