Charter Communications is making more progress in improving the customer experience in the US broadband and video market.
As a result of its investment, Charter Communications has posted revenue of $10.6 billion (+3.2 percent) — driven by Internet, video and commercial businesses — in Q4 2017.
Video revenue was $4.2 billion (+3.1 percent) and Internet revenue reached $3.6 billion (+9.8 percent) — driven by annual and promotional rates, increase in basic video relationships and revenue allocation from launch of Spectrum pricing and packaging in Legacy TWC and Legacy Bright House.
Voice revenues were $587 million (–18.3 percent).
Commercial revenues rose 6 percent to $1.5 billion — driven by SMB revenue growth of 4.5 percent and enterprise revenue growth of 8.3 percent.
Operating costs and expenses increased by $199 million, or 3.1 percent. Programming costs increased by $258 million, or 10.8 percent, reflecting contractual programming increases, renewals and a growing base of expanded basic video customers.
Costs to service customers decreased by $9 million or 0.4 percent, as a result of benefits from the combination of the three companies and improved productivity.
Marketing expenses increased by $44 million, or 7.8 percent, due to higher sales and the implementation of Charter’s selling tactics in the acquired footprints.
Capital expenditures (Capex) for property, plant and equipment totaled $2.6 billion in Q4 2017 against $1.9 billion in Q4 2016, primarily driven by an increase in CPE, infrastructure and support capital spending.
Charter Communications has increased its CPE spending because of higher customer connect volumes and higher set-top box placement rate per connect driven by the launch of Spectrum pricing and packaging in Legacy TWC and Legacy Bright House.
Charter has increased its spending on scalable infrastructure for product improvements for video and Internet, including spending related to 2017 and 2018 DOCSIS 3.1 launches. The company made investment in support capital for vehicle, tools and test equipment.
Charter said it added 15,000 video customers, 300,000 Internet customers, 53,000 voice customers in the fourth quarter.
Charter revenue increased 3.9 percent to $41.6 billion with EBITDA of $15.3 billion (+5.8 percent) in 2017.
“2017 was a transitional year for Charter. We accomplished our key goals of launching our pricing and packaging across our new company, and progressed as planned to unify our service delivery platform into a single entity from the multiple instances we inherited from our M&A transactions,” said Tom Rutledge, chairman and CEO of Charter Communications.
Charter said its residential customer relationships grew by 169,000 in Q4 2017 against addition of 250,000 in Q4 2016. Charter had 25.6 million residential customer relationships and 49.5 million residential PSUs in 2017.
It added 2,000 residential video customers in Q4 2017 as compared with loss of 51,000 video customers in Q4 2016. Charter had 16.5 million residential video customers in 2017.
Charter conducted its all-digital efforts in the approximately 30 percent of Legacy TWC’s footprint and 60 percent of Legacy Bright House’s footprint that are not yet all-digital as part of the strategy to offer more customer experience.
Charter added 263,000 residential Internet customers in Q4 2017, versus additions of 357,000 Internet customers in Q4 2016.
Charter now offers minimum Internet speeds of at least 100 Mbps to 99 percent of its total footprint. 93 percent of Legacy Charter’s residential Internet customers subscribed to tiers that provided speeds of 60 Mbps or more compared to 76 percent at Legacy TWC and 83 percent at Legacy Bright House.
In December, Charter began launching its Spectrum Internet Gig service (940 Mbps) in a number of markets including, New York City, Austin, Charlotte, Cincinnati and Oahu. The service, which uses DOCSIS 3.1 technology, is available to approximately 9 million passings across Charter’s footprint, with additional launches scheduled for 2018.
Charter is doubling minimum Internet speeds to 200 Mbps in a number of markets, at no additional cost to new and existing Spectrum Internet customers. Charter had 22.5 million residential Internet customers.