Charter recently took the wraps off its new wireless offering, dubbed Spectrum Mobile, and at least one analyst firm is expecting the operation to gain a quarter of a million subscribers this year.
However, the firm noted that figure is lower than it previously expected.
“We had previously assumed Charter adds 310k subs in 2018 and 1,620k subs in 2019 based off Xfinity Mobile’s performance at launch,” wrote the analysts at Wall Street firm New Street Research in a note issued to investors late last week. “Due to higher metered pricing and the lack of iPhone availability, we are lowering our net adds estimates by 60K and 100K in 2018 and 2019, respectively.”
Charter quietly took the wraps off its long-awaited mobile offering at the end of June. However, the company’s Spectrum Mobile service bears a striking resemblance to Comcast’s own Xfinity Mobile service, which the company launched last year. The similarities between the two services don’t come as a total surprise, though; Comcast and Charter inked a partnership in mobile earlier this year.
Nonetheless, Spectrum Mobile deviates from Comcast’s Xfinity Mobile in two important ways: First, Spectrum Mobile does not offer the Apple iPhone—that’s a notable situation considering the iPhone commands around half of the U.S. smartphone market. Further, Spectrum Mobile is slightly more expensive than Comcast’s Xfinity Mobile, at least for customers who purchase data by the GB.
“The pricing announcement doesn’t materially impact our thesis; we continue to view wireless as one of the bigger opportunities for Charter,” wrote the analysts at New Street. “Charter’s pricing decision is interesting. Management has said they expect to be more aggressive than Comcast in wireless. They will have benefited from Comcast’s experience and conducted their own testing before launching the product. They must believe that demand isn’t materially impacted by higher pricing. We have modestly lowered our sub forecasts to be conservative, but they may be able to get the penetration we have previously assumed.”
Concurrently, the New Street analysts raised their expectations for Charter’s average revenue per user in mobile by $2 per customer in 2018 and $1 per customer in 2019.
Now that Charter has launched its wireless service, all eyes are turning to Altice, the nation’s fourth-largest cable company, which has promised to launch wireless services through a partnership with Sprint sometime next year.