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 provocative new BBWN webinar, Broadband Success Partners' Jack Burton will delve into cable's next-gen HFC architecture plans and explain why going all-fiber may make more sense for operators right now.
It wasn't long ago that TV was ranked by subscribers as the most important service in the bundle provided by their communications service provider (CSP). Recent research indicates that for nearly three quarters of subscribers, broadband is now the most important service. Broadcast TV is the most important service to only 15% of North American consumers, replaced by OTT video streaming platforms like Netflix, Amazon Prime and Disney+. In addition, many different competitors are moving aggressively to stake a claim in consumers' homes.
In 2020, CSPs need to fight back by transforming their business models, which are becoming more reliant on a single source of revenue: fixed broadband services.
This webinar will focus on helping CSPs transform their business models by placing a firm focus on delivering a sensational subscriber experience and by offering compelling new services that generate value for subscribers. These actions will reinforce the CSP's strategic position in the home network and position themselves for growth in the next decade.
Key topics include:
Being the first to market with WiFi 6 technology, in response to consumer purchases of new devices over the holidays;
Having the insights needed to proactively resolve issues, often before your subscribers even know that there are issues;
Providing help desk agents with the visibility they need to resolve common subscriber issues more quickly;
Delivering a mobile app, in response to consumer demands for the ability to do some things themselves, rather than having to call technical support; and
Addressing consumer concerns around device security, privacy and control with enhanced security and parental controls.
In this insightful Light Reading radio show, Kurt Raaflaub, Head of Strategic Solutions Marketing, will outline the key service provider challenges, deployment considerations, next-gen Gigabit technologies, and service models to win market share in the rapidly growing MDU market.