Charter CEO Tom Rutledge mapped out the operator’s priorities for 2022, unveiling plans to accelerate network upgrades and drop some serious cash on rural expansion projects.
“2022 will increase the number of projects to deploy high splits in our service areas,” Rutledge said during an earnings call. This shift will allow charter to “comfortably offer” symmetrical gigabit speeds and multi-gig speeds in the downstream, he stated.
Operators have traditionally used an upstream band of 5 MHz to 42 MHz. The move to a high-split architecture boosts the upper end of that range to 204 MHz. Charter began deploying high splits last year.
Beyond enabling faster speeds, Rutledge noted implementation of high splits will allow Charter to “significantly reduce our network augmentation capital spending,” including the amount of money it’s been putting toward node splits.
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The plans come as Charter continues development of its DOCSIS 4.0 roadmap and product upgrades in other areas in 2022. Specifically, Rutledge said it will work on boosting Wi-Fi connection speeds this year.
Rural build
Rutledge and Charter CFO Jessica Fischer also talked up the operator’s rural build initiative, on which it plans to spend around $1 billion on this year. That figure includes outlays on its Rural Digital Opportunity Fund (RDOF) commitments and other subsidized rural construction projects, including those backed by stimulus funds from the American Rescue Plan Act and Infrastructure Investment and Jobs Act.
Fischer noted the total spend amount could change based on a range of factors, including permitting delays, labor and equipment availability and Charter’s ability to secure subsidies for additional projects. As part of RDOF, it has already committed to rollout broadband to 1 million new locations over the coming years.
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“The expansion of our footprint into rural areas will help us drive additional customers growth and financial returns,” she said. “We view our rural construction initiative as similar to or equivalent to acquiring a rural cable operator.”
Analysts at New Street Research agreed, noting “We have argued that the rural build drives good returns. This is good investment.”
Results
Charter added a total of 190,000 Internet customers in Q4 2021, falling short of analyst consensus expectations that it would gain around 224,000 subscribers. The figure was also below the company’s Q4 gains for both 2020 (246,000) and 2019 (339,000). However, analysts at MoffettNathanson noted “that total leaves Charter’s broadband base still growing by 4.2%.”
For the full year 2021, it added 1.2 million internet customers, compared to 2.2 million in 2020 and 1.4 million in 2019.
Consolidated revenue of $13.2 billion grew 4.7% year on year in Q4, with Internet sales up 11.6% to $5.4 billion. Video revenue was roughly flat at $4.4 billion, while Voice sales fell 11.9% to $396 million. Commercial revenue increased 4.8% to $1.7 billion and mobile revenue grew 47.5% to $632 million.
Capital expenditures totaled $2.1 billion in Q4 and $7.6 billion for the full year. In 2022, Charter said it expects to spend between $7.1 billion and $7.3 billion. That figure excludes the approximately $1 billion it plans to allocate to the aforementioned rural construction initiative.