Charter Communications chairman and CEO Tom Rutledge expects 2022 to be the year when the cable business gets back to normal, or as close to that benchmark as it can, while it takes advantage of what he believes to be the company’s biggest growth driver -- wireless.
“I see 2022 as a sort of return to normalcy kind of year for us,” Rutledge said at the UBS Global TMT Virtual conference Wednesday, adding that the past two years have been disruptive for Charter and the industry as a whole. “We’re getting back on plan in ‘22 in terms of growing the business, and growing the kinds of product sets we want to deploy. The biggest growth opportunity, the biggest growth driver going forward starting in ‘22 is mobile.”
Rutledge said the mobile opportunity is even bigger since Charter has revamped its billing system.
“The initial billing system that we launched with didn’t really scale as well as we wanted it to,” Rutledge said. “We actually had to hold back marketing and efforts to grow that business because of the scale issue that we had before we could switch out systems. Those are done and we have the ability to accelerate growth in the mobile platform and do that in a logical way.”
Charter currently has about 3.2 million wireless subscribers.
Rutledge acknowledged that broadband subscriber growth is slowing, but didn’t give any specifics like his peers earlier in the UBS conference. The Charter chief said that the pandemic changed consumer behavior towards broadband and led to huge spikes in subscriber growth -- Charter added about 2.2 million broadband customers in 2020, nearly double the 1.4 million it added in 2019. While it’s inevitable that that kind of growth will wane as people return to work and school -- he called it the “unwinding” of that earlier behavior -- he still sees a lot of opportunity in the sector.
“I do think that the opportunity to grow the business is pretty much unchanged,” Rutledge said. “If you look at it on a four- or five-year growth rate trend, it’s pretty solid, pretty straightforward and pretty consistent. I think that that future will look more like the trend than it will look like the third or fourth quarter.”
On the video side, Rutledge does see subscriber declines continuing, but added that might slow as well as customers, especially sports fans, see the value of the bundle.
With 32 million total customers and just under 16 million video subscribers, half of Charter’s customers don’t subscribe to its video product anyway, Rutledge added. Charter’s strategy is to provide as many different video packages as it can, while also helping consumers who have cut the cord better access direct-to-consumer products.
“I see us becoming more transactional and helping these direct-to-consumer businesses work and to help sell those direct-to-consumer models,” Rutledge said, adding that he still feels a responsibility to provide a robust video product.
“I think the decline in full package services will abate to some extent, because it’s still the primary way to get sports,” he continued. “But how it ultimately breaks up and gets into sports direct and entertainment direct, that could be a long way away. We’ll continue to play in all of those parts and try to find the opportunities for us in our relationship with our customers that video presents us.” ■
