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Charter Adds 185,000 Broadband Customers in Q1

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(Image credit: Spectrum)

 

Charter Communications added about 185,000 broadband customers in Q1, in line with many analysts’ estimates as the broadband slowdown rages on, while wireless subscriber additions totaled 373,000 in the period.

Most analysts had expected Charter to add between 175,000 and 186,000 high-speed internet customers in the period, about half the 355,000 subscribers added in Q1 2021. Mobile additions bested last year’s Q1 performance of 300,000 additional lines by about 24%. 

Charter’s results were nearest to its closest competitor, Comcast, which added about 262,000 broadband customers in Q1 and shattered its previous record mobile customer growth with 318,000 additions in the period. Charter didn’t set a new mobile record in Q1, but it came close to the 380,000 lines it added in Q4.    

But about one-third of Comcast’s broadband subscriber gain was the result of the conversion of customers that were formerly getting the service for free to paying subscribers. Excluding this one-time gain, Comcast actually added about 170,000 to 175,000 broadband customers in the period.  

That caused some analysts to wonder if Charter would end up in the same boat and prepared for even lower subscriber growth than originally anticipated. That the company reported growth in line with earlier expectations caused some to breathe a sigh of relief.

In a research note, Wells Fargo Securities media analyst Steven Cahall wrote that Charter stock was down about 4% on April 28 after the Comcast results, “so we'd say the expectations bar had already been lowered.” 

But Cahall noted that cable isn’t out of the broadband woods yet. 

“The net adds number indicates a broad-based Cable industry internet slowdown,” Cahall wrote. “We think churn is low indicating gross adds are low too, and likely tied to the ramp in subs from fiber and FWA initiatives. This all indicates a more competitive arena ahead and that's going to be the backdrop of sentiment for CHTR and peers for a while.”

Overall revenue was up 5.4% to $13.2 billion and cash flow also rose 5.4% to $5.2 billion. 

"We remain focused on our primary goal of driving connected customer and mobile broadband relationship growth," Charter chairman and CEO Tom Rutledge said in a press release. "We continue to grow our business by offering superior converged connectivity products. And our new joint venture with Comcast will allow us to provide a next generation streaming platform that offers new and differentiated direct-to-consumer products to meet demand in a fast-changing video environment." 

Mike Farrell is senior content producer, finance for Multichannel News/B+C, covering finance, operations and M&A at cable operators and networks across the industry. He joined Multichannel News in September 1998 and has written about major deals and top players in the business ever since. He also writes the On The Money blog, offering deeper dives into a wide variety of topics including, retransmission consent, regional sports networks,and streaming video. In 2015 he won the Jesse H. Neal Award for Best Profile, an in-depth look at the Syfy Network’s Sharknado franchise and its impact on the industry.