Rural customers are ‘purchasing products beyond Internet,’ says Charter CFO
While Charter Communications reported $6.65 EPS for the Q1 2023 quarter, missing analysts’ consensus estimates by $0.56 per share, it still managed to post a revenue of $13.65 billion for the same period, a 3.4% increase from last year’s quarter. This growth, said the company, was driven by a residential revenue growth of 2.5%, commercial revenue growth of 2.4%, as well as an additional 34.0% growth, primarily driven by higher mobile device sales and rural subsidies.
Charter specifically reported a year-over-year increase in line extensions of $349 million as a result of its “subsidized rural construction initiative and continued network expansion across residential and commercial greenfield and market fill-in opportunities.” Chris Winfrey, Charter president and CEO, offered additional context on the earnings call, stating that the company’s rural expansion “plans are on track.”
“During the quarter, we activated 44,000 subsidized rural passings. Subsidized rural passings growth is accelerating with 20,000 subsidized rural passings activated in March,” he continued. “Costs are coming in as planned and we have the labor, the equipment and the supply necessary to execute our build.”
Jessica Fischer, chief financial officer at Charter, further added that the penetration of subsidized rural passings “continues to exceed… original target” and that rural customers are “purchasing products beyond Internet, including mobile, video and wireline voice.”
Charter also reported an increase of 76,000 total residential and small and medium business (SMB) Internet customers in the first quarter, and as of March 31, 2023, the company served a total of 30.5 million residential and SMB Internet customers. Further, its first quarter total residential and SMB mobile lines increased by 686,000, and it served total of 6.0 million mobile lines as of March 31, 2023.
“We continue to operate in a low transaction environment and yet we added 686,000 Spectrum Mobile lines,” commented Winfrey. “At the end of the first quarter, we had 6 million total mobile lines. Just over 10% of our Internet customers now have mobile service and we expect mobile penetration to meaningfully grow over the next several years and our increasing convergence capabilities will contribute to Internet growth.”
Speaking broadly about the quarter, Winfrey said: “In the first quarter, we made significant progress on our three key initiatives — evolution, expansion and execution. Our customer-first strategy is focused on delivering a differentiated, converged connectivity product that delivers the fastest speeds and saves customers money, while simultaneously driving growth and creating long-term value for Charter shareholders.”
