Charter CEO Confident Fixed Wireless Threat Will Fade
Washington, D.C., Feb. 2, 2024 – Charter Communications lost 61,000 broadband subscribers in the most recent quarter, but the company’s leader continues to downplay competition coming from fast-growing fixed wireless access (FWA) service provided by T-Mobile, Verizon, and AT&T.
“We continue to believe the impact of fixed wireless is temporary. Our Internet product is faster and more reliable, [and] our pricing is lower when similarly bundled with mobile,” Charter President and CEO Christopher Winfrey said on a call today with Wall Street analysts to discuss fourth quarter 2023 results.
T-Mobile added 541,000 FWA subscribers in the fourth quarter, while Verizon logged about 375,000 additions. AT&T – a new FWA entrant – added 67,000 FWA customers. Meanwhile, Comcast reported losing 34,000 broadband subs during the same period, nearly double its loss in last year’s third quarter.
Winfrey’s negative assessment regarding FWA isn’t new. In the past, he has referred to FWA as “another former of DSL.” That’s a reference to phone companies’ low-bandwidth copper networks that cable’s higher-capacity networks steadily marginalized over the past 20 years.
Winfrey claimed that FWA providers have only so much network capacity to devote to that form of Internet service, which shares the network used to provide mobile phone service to hundreds of millions of subscribers.
“Customer bandwidth needs continue to increase and [mobile network operators] will face capacity challenges that will be required to allocate their spectrum and capital to maintain profitable mobile services,” Winfrey said. “While we can’t promise when that happens, I believe that bandwidth needs increase and quality and value win.”
Charter is also facing competition from companies that are deploying fiber networks in its incumbent territories.
Although 50% of Charter’s network has been overbuilt in some fashion, the owners of these networks are not achieving their customer penetration goals, calling into question their financial viability, Winfrey said.
“We don’t see overbuilders reaching their penetration and [return on investment] goals in our footprint, now or in the future,” Winfrey said. “The don’t have the same ubiquitous convergence capabilities as we do.”
So-called overbuilding is painful initially, but “we expect to return to more normalized Internet growth over time,” Winfrey said.
Winfrey was asked about the state of Internet competition from Low Earth Orbit (LEO) satellite providers like Starlink. Winfrey said he did not sense a serious threat.
“This is an expensive offering on a … per month basis. It’s expensive from a [customer premises equipment] standpoint. And it needs to be because if I told you our network was going to fall to the ground every six to eight years and burn up, you’d tell me that’s a pretty capital-intensive business that needs to priced appropriately and it is.”
Starlink’s unlimited standard plan costs $120 a month after purchasing a dish for a one-time fee of $599. Download speeds can range between 25 and 220 Mbps.
LEO services, he said, have a role but not in areas where Charter has deployed fiber networks.
“I think LEO has a really good use in certain cases, but it’s typically not going to be where our fiber-based network is deployed. So, it’s not something that really has risen too much in terms of our thinking in penetration,” Winfrey said.