Charter today reported similar Q2 2022 results as Comcast, in that it had a healthy increase in mobile subscribers, while a disappointing quarter for broadband lines.
Second quarter mobile lines increased by 344,000. As of June 30, 2022, Charter served a total of 4.3 million mobile lines.
Meanwhile, its total net internet subscribers for the quarter decreased by 21,000. The company chalked a lot of that up to the discontinuation of the Emergency Broadband Benefit (EBB) program and less customer interest — or qualification — for the Affordable Connectivity Program (ACP).
Like Comcast, Charter also said broadband churn was historically low, but new connect activity was also low. LightShed analyst Walter Piecyk tweeted that Charter was citing low churn, but it doesn’t actually report the metric, so we don’t know the specifics.
Spectrum Mobile
Mobile revenue for the quarter was $726 million, an increase of 39.8% compared to the year-ago quarter. But mobile costs totaled $797 million, an increase of 35.9% year-over-year, and were comprised of device costs, customer acquisition costs and service and operating costs.
Although its costs exceeded its revenues during the quarter, Charter CEO Tom Rutledge said eventually mobile will be profitable because the company has so much runway for growth. “Our mobile business will drive meaningful EBITDA for Charter, giving us EBITDA growth simply by growing our mobile base.”
Q2 capital expenditures totaled $2.2 billion and included $95 million of mobile-related capital expenditures.
Pricing
Spectrum Mobile is available to all new and existing Spectrum Internet customers. The company’s Unlimited pricing starts at $29.99/month per Unlimited line for customers with at least two lines. This includes taxes and fees and does not require contracts.
Similar to Comcast’s earnings yesterday, analysts quizzed Charter executives about their mobile pricing strategy.
Rutledge said there’s always a tension between how you price a product and how much market share you’re able to garner. “You’re trying to get to the maximum amount of cash flow you can generate based on the right price and the right volume distribution,” he said. “That’s what we’re seeking in mobile. We have an opportunity at the pricing we have to continue to grow the business.”
CBRS
Charter and Comcast are working together on technology to offload mobile traffic onto CBRS spectrum.
Previously, Rutledge has said Charter has completed the buildout of a mobile core network for the CBRS trial, which it expected to begin in the middle of this year.
Today, Rutledge said, “We haven’t begun to offload on CBRS yet in a commercial way.” Then he pivoted the conversation to Charter’s strategy to offload mobile traffic onto its Wi-Fi network. He said ultimately, Charter will offload onto a combination of CBRS and Wi-Fi. This will save wholesale costs it pays to Verizon for using its nationwide wireless network.