Charter: Initiatives Helped Stem 1Q Sub Losses

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Basic-subscriber losses eased up a bit during the first quarter at Charter Communications Inc., which management said is a sign that its recent customer-focused initiatives are working.

Charter lost about 6,700 basic video customers in the period, its biggest improvement in about three quarters. Digital subscribers increased by about 20,000, while the high-speed data rolls increased 94,000 in the quarter.

Digital average monthly revenue per unit increased about 11% in the period to $70.75, compared to $63.75 in the same period last year.

Revenue was up 7%, to $1.3 billion, and cash flow increased 6%, to $475 million, in line with expectations.

Charter stock rose 4 cents each (3.7%) to $1.11 in afternoon trading Tuesday.

On a conference call with analysts, Charter interim CEO Robert May said that Charter’s “Focus on Excellence” program, begun earlier this year, was the catalyst for the better performance.

Video churn in the quarter improved by 9 basis points, digital churn by 16 basis points and high-speed data churn by 5 basis points in the period, May said.

May pointed to a pilot program launched in the beginning of the year at Charter’s Irwindale, Calif., call center, aimed at ensuring that customer calls were directed to the appropriate sales representative. Today, about 90% of calls to that call center are routed to the appropriate party, compared to 70% before the program was initiated.

“As a result, we’re better maximizing the potential of each call and generating new sales opportunities,” May said on the call.

May added that Charter has rolled out the “best practices” initiative to all customer call centers and expects the certification process to be completed by June 1.

“Through the careful execution of our operational improvement initiatives, like in Irwindale, and an intense focus on our customers, we look to reduce expenses, enhance margins, improve sales and grow revenue over the coming quarters,” May said.

Charter is also making progress in filling some key management spots. May said the search for a chief financial officer is about 80% complete and the St. Louis MSO has several attractive candidates to choose from. In addition, the search is continuing for a general counsel and a chief marketing officer.

May did not give a time frame for when those searches would be complete.

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