Charter Sheds 47K Video Subs, Q3 Financial Metrics Grow

TWC promotions temper video growth, but revenue rises 7.4%, EBITDA up 14.5%

Charter Communications lost about 47,000 residential video subscribers in the third quarter, mainly the result of customers rolling off promotional pricing plans at Time Warner Cable, and offset partly by stronger growth at legacy Charter systems.

Charter completed its $80 billion purchase of TWC and Bright House Networks in May and continues to move through the integration process of the two companies. While basic video subscriber growth was down --compared to a loss of 20,000 customers in the prior year – and broadband customer additions of 350,000 were behind the 369,000 additions of a year ago, financial metrics were strong.

Overall, Charter grew revenue by 7.4% to $10 billion and cash flow rose 14.5% to $3.6 billion.

Over the last twelve months, legacy Charter grew residential video customers by 51,000 or 1.2%. As of the end of the third quarter of 2016, legacy Charter's footprint was 100% all-digital, compared to 60% at legacy TWC and 40% at legacy Bright House. As of Sept. 30, Charter had 16.9 million residential video customers.

Beginning next year, Charter said it will restart all-digital efforts in those legacy TWC and legacy Bright House markets that continue to broadcast bandwidth-intensive and low quality analog video signals. Charter intends to complete the all-digital conversion in legacy TWC and legacy Bright House markets by the end of 2018, with a minimum Internet speed offering of 100 Mbps in many markets.

"Our goal is to be a superior service provider. Charter, under the Spectrum brand, provides high quality products and service at attractive prices, allowing us to grow our residential and business customer relationships," Charter CEO Tom Rutledge said in a statement. "The integration of Time Warner Cable and Bright House Networks is on track, and we are beginning to implement the Spectrum brand, with better products, pricing and packaging. Improving our service operations in a way that allows consumers to recognize Spectrum as the best service provider will take time, but our proven operating strategies will work for customers, employees, shareholders and the communities we serve."