One executive’s fumble is another’s touchdown. Charter Communications CEO Chris Winfrey revealed the cable giant has seen a slowdown in fiber overbuild activity, as operators reassess the return on investment they’re getting from the technology. Winfrey also talked up cable’s ability to fuel development of next generation applications and noted navigating the Broadband Equity, Access and Deployment (BEAD) Program is turning out to be harder than Charter initially thought it would be.
“The competitive overbuilds have slowed down because not only the financing cost is higher, but I don’t think any of it was positive ROI to begin with and I think the market’s waking up to that,” he said at a Goldman Sachs investor event.
Winfrey reiterated that Charter is on a course to upgrade its entire network to symmetrical multi-gigabit speeds over the coming years at a cost of just $100 per passing. For comparison, fiber typically runs anywhere from $500 to $1,500 per passing.
The CEO argued Charter’s ability to deliver multi-gig speeds across its nationwide footprint rather than in small pockets scattered across states will provide the push developers need to tackle next generation applications.
He stated the cable industry’s lockstep move toward widespread multi-gig deployments “gives product developers and software developers a platform to go develop the next generation of products and services that need and use that bandwidth. If it’s only a fraction of the country, there’s not enough coverage to make it worthwhile.”
Bumpy BEAD road
Charter was one of the largest winners in the Rural Digital Opportunity Fund auction and is in the midst of a sprawling rural expansion. Winfrey said the operator is already ahead of target and could actually be moving faster if it could get some help with pole permitting and make ready issues.
He added the company is also eyeing opportunities to expand its rural footprint even further with additional state and federal funding. However, he noted the road to securing support from the $42.5 billion BEAD program is a winding one given it didn't necessarily get the guidance from the National Telecommunications and Information Administration (NTIA) it was hoping for.
In July, New Street Research flagged Charter as having one of the biggest BEAD opportunities among the cable incumbents, with around 2.4 million funding-eligible locations on or near net. Comcast had the same opportunity figure compared to Altice USA’s 900,000, Cox’s 640,000 and Cable One’s 340,000.
“We are working with the states…to make sure it’s going to work for us and work for others,” Winfrey concluded. “I’m still optimistic about BEAD, but it’s a little trickier than we were originally hoping for.”