Charter loses home internet customers, blames end of COVID grant program

enlarge / Charter CEO Tom Rutledge speaks at The New York Times DealBook conference in New York on Thursday, November 10, 2016.

The two largest home ISPs in the US both lost subscribers in the second quarter of 2022.

On Friday, Charter Communications reported a loss of 42,000 residential Internet customers, leaving 28,259,000 households purchasing Spectrum Internet service. Charter also gained 21,000 small and medium-sized enterprises (SMEs) customers, bringing the number to 1,994,000 in that category.

Charter is the second largest internet provider after Comcast. Last week, Comcast reported a loss of 10,000 residential broadband customers, leaving 29,826,000 households with an Internet subscription. Comcast also gained 10,000 business broadband customers, giving it 2,337,000 business subscribers.

The subscriber losses are unusual. It was Comcast’s first quarter ever in which it failed to gain broadband subscribers.

Charter had gained more than 7 million home Internet customers since its purchase of Time Warner Cable in 2016 made it the second-largest cable company with 20.7 million residential Internet subscribers at the time. Charter added more than 1.1 million home internet customers in 2021 and a further 164,000 in the first quarter of 2022.

Charter blames end of COVID grant program

The Charter delay would have started earlier if not for the COVID-related Emergency Broadband Benefit (EBB) program, which provided $50 per month in grants to those on low incomes and those who lost income during the pandemic. Charter said it lost 59,000 residential and SMB subscribers in the second quarter as a result of that program’s replacement with the Affordable Connectivity Program (ACP), which offers $30 per month and has stricter eligibility requirements.

“During the second quarter, we added 38,000 Internet customers with no adverse impact related to the discontinuation of the Emergency Broadband Benefit program and additional definition requirements of the Affordable Connectivity Program,” said Thomas Rutledge, CEO of Charter, in an interview with analysts. a looking for Alpha transcript.

Charter revenue in the second quarter was $13.6 billion, up 6.2 percent year over year. Net income was $1.5 billion, up 44.2 percent from last year’s second quarter.

Charter COO Christopher Winfrey said the company is confident that “Internet offerings will increase again…our broadband growth recipe has always been focused on being competitive and price competitive in the marketplace.”

Charter hopes for new federal funding

Like Comcast, Charter seems to be having trouble adding subscribers because it’s already signed up almost everyone who wants its service and lives in a house within Charter’s network area. Comcast and Charter do not compete with each other, despite being the two largest cable companies.

Charter is expanding its network into a number of new areas with funding from the federal Rural Digital Opportunity Fund (RDOF) and other grant programs. Rutledge pointed out that, in addition to the RDOF and several state grant programs that have given Charter money, the US government’s $42 billion Broadband Equity, Access, and Deployment program “coming next year … will allow for additional construction, of which we hope to bid and be successful with it.”

Although Charter is the sole provider of high-speed lines in many parts of its territory, business leaders said competition from fiber optic and fixed wireless connections played a role in the loss of customers. Wired wireless is still “relatively small. It’s not the most important part of our quarterly performance, but it’s a factor,” Rutledge said.

Charter also lost 240,000 residential TV customers and 265,000 residential voice customers in the second quarter. Average monthly revenue from residential subscribers increased from $113.28 to $116 in the second quarter. That includes broadband, TV and fixed telephony.

One bright spot for Charter is that it has added 344,000 residential and SMB mobile subscribers, giving it 4.3 million mobile lines. “Our mobile business is growing at an extremely fast pace,” Rutledge said. Charter provides cellular service over the Verizon Wireless network.

Disclosure: The Advance/Newhouse Partnership, which owns 12.4 percent of the Charter, is part of Advance Publications. Advance Publications owns Condé Nast, who owns Ars Technica.

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