Charter keeps kicking it out of the ballpark in terms of adding mobile virtual network operator (MVNO) subs. The company added 648,000 Spectrum Mobile lines in its second quarter 2023. And at the end of the quarter, it had over 6.6 million total mobile lines. Over 11% of its internet customers now have mobile service.
These results compare to Comcast’s Q2 where it added 316,000 wireless lines in Q2, bringing its total wireless lines to 5.98 million.
“We expect mobile penetration to meaningfully grow over the next several years,” said Charter CEO Chris Winfrey on the company’s earnings call last Friday.
“Today, over 45% of our internet customers have our advanced Wi-Fi product, and over 75% of our mobile customers now attach to the Spectrum Mobile network outside of their homes, providing higher speeds with more reliability to customers with lower cost to Charter,” he said.
When Winfrey said mobile customers now attach outside of their homes, he’s referring to the vast number of Wi-Fi hotspots that Charter and Comcast share. This allows that mobile traffic to not have to depend on the underlying mobile wholesaler, Verizon.
Charter Chief Financial Officer Jessica Fischer said the majority of new mobile lines continue to come from existing internet customers, although the percentage of lines coming from new customers continued to increase during the second quarter and was higher than the first quarter.
Charter always touts its Spectrum One offering every chance it gets. Spectrum One combines broadband, Wi-Fi and mobile into one bundle. Charter uses Speed Boost to increase the speed of Wi-Fi for these customers, regardless of what tier of broadband they're signed up for.
Winfrey said, “When you put the internet Wi-Fi and mobile together, you can't get that product, you can't get that quality and you can't get that pricing anywhere else inside the marketplace. And even if you just take a look at it as mobile stand-alone, at $30, at retail pricing, that's unmatchable.”
The company is approaching the one year anniversary of Spectrum One this October when the deal may change for consumers, and analysts asked about “roll-offs.”
Winfrey said the company has “quietly in the marketplace” done some testing on consumer sentiment and “we'll have the opportunity as we go through the course of this quarter to perfect any reactions that we have from customers in small scale along the way.”
He acknowledged that Spectrum One could “have a small amount of churn potentially, but I don't think it's going to be material given the quality and the value that we're providing in and I think we found something that sticks.”
In terms of costs, Winfrey said the company has a significant amount of customer acquisition costs. “And we don't always have the full revenue attached to those customers just yet, and that will start to occur beginning in October and just grow from there.”
CBRS spectrum
Charter is working on a full commercial launch of its CBRS spectrum in one of its markets. It’s making sure that handover times are working well between the underlying Verizon network to the CBRS network.
We’ll set the next year are the basis for our broader CBRS rollout,” he said. “We're very cognizant of the overall Capex build. But we're going to build that in a measured way across our footprint…. But we're going to do it in a way that's very targeted and it generates fast returns.”