Charter Communications shares soared more than 13% Thursday after the MSO issued guidance showing that cable capital expenditures would drop through the floor in 2019, and fall well below what some top industry analysts were expecting.
Charter Communications Inc. , which has previously been reticent to provide such guidance, announced that total cable capex would fall to about $7 billion in 2019, down from $8.9 billion in 2018.
That greatly reduced capex number, which excludes Charter's spending on its relatively new Spectrum Mobile service, comes after Charter wrapped up its DOCSIS 3.1 network upgrades and completed a pricey all-digital transition in the systems acquired from Time Warner Cable and Bright House Networks. It also comes as Charter nears the completion of an integration process with those TWC and BHN properties that has gone on for about 2.5 years.
The falling cable capex at Charter also comes alongside expected decrease in spending on set-top boxes and other consumer premises equipment (CPE) as the MSO puts more focus on streaming apps that deliver its pay-TV service to retail devices, such as Apple TV boxes, Amazon Fire TV and Roku players, Samsung smart TVs and select gaming consoles.
Even with those declines, Charter still expects to see investment in its network capability to rise, company CFO Chris Winfrey said on the call.
"We knew it would be lower than 2018, but just how much lower? Well, now we know the answer … and the answer is WOW," Moffett said in a research note.
He stressed that Charter's target of $7 billion in capex was a full $1 billion below consensus and nearly $2 billion below what the operator spent in 2018. Moffett noted that most company valuation models didn't see Charter's capital spending dipping to the $7 billion mark for another three years.
Falling capex has been a key part of Moffett's bullish thesis on cable, but not anything like this. "Valuation models across the street will need to be radically revised," wrote Moffett, who rates Charter at "Buy" with a target price of $470.
Charter shares were up $39.88 (13.76%) to $329.79 each in midday trading Thursday.
With respect to individual services, Charter lost 36,000 residential pay-TV subs in Q4, while adding 289,000 residential high-speed Internet customers.
Charter also shed 83,000 residential wireline voice subs as that offering starts to become an inexpensive bolt-on (the introductory price on it is now $9.99 per month), and as Charter instead begins to use Spectrum Mobile as the more prominent piece of triple-play packages that bundle in broadband and video.
Charter added 113,000 mobile lines in Q4, giving it 134,000 total. Charter launched Spectrum Mobile, via its MVNO deal with Verizon Wireless, last fall.
"Spectrum Mobile is ramping up," Tom Rutledge, Charter's chairman, and CEO declared on Thursday's earnings call.
For more about Charter's mobile strategy and what Rutledge thinks of 5G as a potential replacement/alternative to cable broadband, see our story at sister site, Light Reading. (See Charter CEO: 'Spectrum Mobile Is Ramping Up'.)
But startup will need to finalize its satellite design, secure more funding and cut through the regulatory red tape before its vision to rival terrestrial fiber networks can (literally) get off the ground.
As Vice President of Global Healthcare at AT&T, Maria Lensing oversees the telecommunications operator's technology and professional services offerings across the spectrum of medical providers, from solo practitioners and walk-in clinics to giant hospital chains, medical-device vendors and consulting firms. Lensing also sees more interest from traditional service providers -- cable and telecom operators looking to expand or build relationships with their own medical communities, perhaps as an adjunct to smart-home successes or standalone.
Lensing, who took on this role almost a year ago in May 2018, oversees both the sales and technical teams responsible for developing growth initiatives for AT&T's Global Healthcare business -- including products, services and industry-specific solutions. She also very actively promotes business minority inclusion, education and female empowerment programs and has been recognized both within and outside AT&T. Some awards she's received include "Top 40 Under 40" and "Super Woman in Business" from the Memphis Business Journal.
Join Maria Lensing, VP of Global Healthcare at AT&T, on Tuesday, April 23 at 12:00 p.m. ET / 9:00 p.m. PT, when she's the guest on BBWN Radio, hosted by Broadband World News Editor Alison Diana. Register now!
So far, the agenda includes a discussion of technologies such as fiber and 5G; defining the needs and solutions for a widely diverse range of customers; partnering for success in a typically slow-moving, budget-constrained market; learning and dispersing best practices from other verticals and within other business groups; promoting diversity and female empowerment when so many say they're doing so but so little has changed; and what she hopes to accomplish in another year in this role.
Register and post your questions for Maria on BBWN Radio's easy-to-use chat board. We will get to as many questions as possible. Please post questions before and during the broadcast. Once you've registered, you will be led to the chat board page. Talk to you on April 23!
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.
Just when you thought the answer to your next technology direction question was clear, the noise around multiple new technology options fills the Internet and airwaves. Multiple 5Gs are being deployed; there's CableLabs' 10G initiative; the ITU and IEEE are toiling around 50G PON – and we haven’t even talked about Wi-Fi6 yet! Is any of this real, do you have to pay attention or can you just let the dust settle and then decide?
Since waiting is often not the best option, let’s demystify technology options, their impact on your business, and how to prepare for whatever the future brings.
In this webinar, Service Providers will learn:
Current state of 5G and how it affects everyone, not only mobile network providers.
Latest technologies being developed and how they will benefit their networks and subscribers.
How to prepare their networks for the future – whatever it may hold.