Charter Communications followed Comcast’s lead and today announced that it cut pricing for its wireless MVNO unlimited data offering. Customers with at least two mobile lines can get its Spectrum Mobile Unlimited service starting at $29.99 per month, per line.
The service continues to start at $45 per month for customers with one line. All prices include taxes and fees with no contracts.
Comcast’s Xfinity Mobile did the same thing in April, offering its family unlimited plans for $30 per month, per line.
Both Comcast’s and Charter’s mobile services ride on Verizon’s nationwide network through a wholesale arrangement that includes access to Verizon’s 5G. Spectrum Mobile and Xfinity Mobile also supplement their wireless offerings with their millions of Wi-Fi hotspots.
Charter’s CEO Tom Rutledge has repeatedly stated that he views wireless as a way to make the company’s lucrative fixed broadband offerings more sticky, and he sees lots of runway in new revenue growth.
On Charter’s Q1 earnings call in April, Rutledge said he sees mobile and wireline broadband converging into a single connectivity service package. “Our share of household connectivity spend, including mobile and fixed broadband, is low, and we remain very much under-penetrated relative to our long-term opportunity,” said Rutledge.
He said that an average household served by one of the big three mobile broadband providers — with 2-plus lines of mobile broadband, along with service from a wireline broadband connection — spends about $200 a month on its telecom services. Charter only gets $65 per customer of that $200 of combined monthly spend on mobile and wireline broadband service. So he sees a lot of upside revenue potential.
“Our goal is to do the same with mobile in our service area as we did with wireline voice, where we made Charter the predominant wireline phone carrier by reducing consumer telephone bills by over 70%, meaning Charter can grow for a long time because we remain under-penetrated and our growth will reduce customer costs,” said Rutledge in April.
Jeff Moore, principal analyst with Wave7 Research said, “This keeps things lively in wireless competition. As the market for top carriers shrinks from five to three — minus Sprint and TracFone — the cable companies ironically are playing the role of upstart competitors, keeping the national carriers on their toes.”
Asked if the competition from the cable companies posed a financial threat to the big wireless carriers, Moore said he didn’t think so. He said the big carriers have been very focused on selling their premium unlimited plans with high average revenue per user (ARPU). But the cheaper unlimited plans from Charter and Comcast are a good option for customers who don’t care about frills like streaming applications.
Of Verizon’s relationship with the cable companies, Moore said, “They’re making money whether people activate with Spectrum, with Xfinity and with Verizon.”
In Q1 2021 Comcast’s Xfinity Mobile hit a key milestone, turning a profit for the first time since its launch in the first half of 2017. Revenue for the unit increased 49.7% year on year from $343 million to $513 million.
Charter prepared a chart comparing how Spectrum Mobile’s unlimited pricing compares with the big three providers’ unlimited offerings.