Cord Cutting Shocker: Charter Added 102K Spectrum TV Subscribers in Q2
Programs aimed at keeping residential customers connected online during the pandemic helped fuel growth
Programs aimed at keeping residential customers connected online during the nationwide pandemic helped fuel growth at Charter Communications in Q2.
Charter said it added 102,000 video subscribers in Q2, a reversal of the 150,000 video customers it lost in the prior year but entirely the result of programs like the Federal Communications Commission Keep America Connected pledge and others, where providers agreed not to disconnect customers for non-payment.
Charter said that 149,000 video customers signed up in Q2 as part of the FCC Keep America Connected pledge and 12,000 joined through its Remote Education Offer. The company said nearly 50% of REO customers chose to subscribe to other services like video, voice and mobile and were billed for those products.The REO program expired on June 30, and Charter said 90% of cumulative connects through that program have retained service through July 27.
On a conference call with analysts, Charter chairman and CEO Tom Rutledge said regardless of how those customers came to the company, they are acting like any other subscriber that joined via a traditional promotion.
“From a profile perspective they look just like our regular customer base and they are just like our regular customer base,” Rutledge said. “They very much are behaving like all customers we create. We look at that offer in many ways as a conventional offer with a broadband benefit, but it brought in real customers that subscribe and act like existing customers.”
However, he didn’t expect to see continued video growth, adding that it was a combination of the pandemic which kept people stuck in their homes and in front of their TV sets, and the programs.
“The secular trends for video haven’t changed,” Rutledge said.
Despite subscriber gains, Charter said video revenue was down 0.4% for the period to $4.4 billion, which the company said was due to a higher mix of lower-priced video packages and the waiver overdue customer balances.
The FCC program also was a big factor in broadband gains. Charter said it added about 825,000 residential and business broadband subscribers in the quarter, but added that about 600,000 residences and 100,000 businesses applied for the FCC program, and at its peak, 208,000 residences and 14,000 businesses would have been disconnected for non-payment. About 30% of those Keep America Connected customers’ bills were current and more than 60% were making partial or full payments. Charter said that to help those customers with overdue balances, it waived $76 million residential, $6 million business and $3 million of mobile receivables in the quarter.
Charter also said it added 325,000 wireless customers in the period, ending the quarter with 1.7 million Spectrum Mobile subscribers.
The subscriber growth helped fuel a 3.1% lift in total revenue to $11.7 billion. Adjusted EBITDA rose 7.3% to $4.5 billion.
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