Finance

Charter Eyes 5G, Wireless Offerings

Cable operator should launch wireless product in 2018, conducting field tests for 5G 2/16/2017 12:58 PM Eastern
Charter Communications chairman, president and CEO Tom Rutledge

Charter Communications is moving forward with its wireless plans, planning to launch its own wireless product next year while it currently conducts tests of the next generation technology, 5G.

Charter chairman and CEO Tom Rutledge said on a conference call with analysts to discuss Q4 earnings that the company has already activated its Mobile Virtual Network Operator (MVNO) with Verizon Communications. But unlike Comcast – which activated its Verizon MVNO last year and plans to launch a wireless product by mid-year – Charter’s product won’t likely come out until sometime in 2018.

On the conference call, Rutledge said the MVNO will serve Charter’s wireless needs in the short term. Longer term, he said the company is currently conducting tests of 5 G technology.

Charter said back in December that it had applied for experimental licenses to test 5G, which it said at the time could service as the backbone for a 10 Gigabit per second broadband service. 

On the conference call, Rutledge said he sees 5G more as a capacity play than a mobility play.

Rutledge pointed to Charter’s current high-speed network which has 22 million customers and 200 million connected devices. He added that 75% to 80% of the bits being used by those devices, mostly cellphones, are coming in through its WiFi network. For that reason he believes that products developed for 5G will be virtual reality and augmented reality products more geared toward fixed wireless services.

“How that manifests itself is a little unclear, but my sense is that many of those will not be mobile products,” Rutledge said. “They will be fixed products in the dwelling or the office. They’ll be how you learn and how you play. They’re less about mobility than they are about capacity and low latency.”

Charter also addressed disappointing subscriber growth, which the company said was primarily tied to heavy promotions at the former Time Warner Cable. Basic video subscribers declined by 51,000 in the fourth quarter, as increases of 20,000 and 34,000 at legacy Charter and Bright House systems were erased by a loss of 105,000 video customers at the former Time Warner Cable properties.

Chief financial officer Chris Winfrey said TWC promotions – including a $10 per month basic TV offering and $45 per month double play of basic TV and Internet service – were the culprits. While Charter is rolling out its own pricing and packaging across the entire footprint – it should be finished by the end of March – it could take some time for those promotions, some of which were initiated in eh Fall of 2015 and early 2016, to roll off.

“We’re doing some things to mitigate it that have taken us time to put in place, because of the complexity – there were 96,000 different promotional offers out there,” Rutledge said.   

“Just the sheer logistics of managing that has been a challenge. We’ve gotten some control over it, and are getting better every day. We think we can mitigate some of the churn through better management of the step-up process.”

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