- Charter said vendor agreements help minimize tariff impact
- It touts its convergence strategy aids income-constrained consumers
- Charter lost 60,000 broadband subs in Q1 but fared better than Comcast
Nobody really knows how tariffs are going to pan out, but Charter believes it’s well-equipped in the face of economic uncertainty – even if vendors may feel differently.
“We have attractive agreements with our equipment vendors and we continue to work with them to minimize the impact of tariffs, while at the same time supporting the health of the cable equipment ecosystem,” said Charter CFO Jessica Fischer on the Q1 2025 earnings call.
To that point, the company doesn’t expect tariffs to have a “significant impact” on capital expenditures for 2025 and the next several years, she added.
Unlike fiber broadband, the cable industry will likely feel the tariff burn as vendors like CommScope, Teleste and Vecima Networks produce a good deal of components outside the U.S.
In an attempt to mitigate supply issues, Charter and Comcast are trying to buy “as many amplifiers and passives as they can” to stay on track with their outside plant upgrades, Dell’Oro Group VP Jeff Heynen recently told Fierce.
New Street Research (NSR) estimated equipment makes up roughly 40% of Charter’s total capital expenditure budget, “of which ~50% is imported.” Thus, “If costs increased, we would expect Charter to slow deployment modestly,” NSR's team wrote in a note Friday.
Convergence: Charter's saving grace
In case a recession strikes, Charter thinks its convergence strategy will help keep customers afloat, said CEO Chris Winfrey.
“You can save them hundreds or even thousands of dollars on converged broadband and mobile services,” he said, noting the operator also has “a variety of packages” for income-constrained consumers.
Charter in September rolled out new broadband bundles coupled with higher starting speeds and multi-year pricing guarantees, a move Comcast is also pursuing as cable continues to post broadband losses.
Subscriber-wise, Charter lost 60,000 internet customers in Q1. Not great, but hey, it fared better than Comcast which shed a whopping 199,000 broadband subs. Approximately 9,000 of Charter’s broadband disconnects were due to the California wildfires, execs noted.
On the wireless front, Charter gained 514,000 new mobile lines and sees potential for further growth within its existing broadband base. “Just under 20% of our internet customers are mobile customers today,” Fischer said.
Bits and bytes
Other highlights from Charter’s Q1 earnings call include:
- The operator added 89,000 subsidized rural passings in the quarter and now has 902,000 rural locations passed, most of which are fiber. Charter is targeting 450,000 more rural passings for 2025.
- CBRS deployments are in full swing, as Charter plans to launch radios across 25 markets by year-end using a combination of licensed and unlicensed spectrum.
- Broadband data usage per customer increased to about 825 GB per month, with over 30% of those subscribers now consuming more than 1 TB monthly.