Charter Unveils New Spectrum Prices, Internet Speeds

Communications Map CEO Chris Winfrey said he wants customers to think reliability and dependability when they think of their cable and broadband provider.

The cable giant told CNBC it is unveiling a series of changes Monday to bolster that goal, including rolling out new packages and pricing, increasing internet speeds, offering outage credits and promising increased reliability for customers. customers.

Charter — which provides broadband, cable TV and mobile services and is known to customers as Spectrum — said it is also trying to make the company more affordable and remove longstanding negative associations around cable companies, announcing Spectrum’s new ‘first principle’ – customer commitment of its kind’, branded as ‘Life Unlimited’.

The launch comes as Charter and its industry peers grapple with several trends: slowing broadband customer growth, continued cable bundle shedding and a fledgling but fast-growing mobile business.

“It’s hard to be loved when you provide a critical service to the household that is a physical infrastructure that charges over $100 a month,” Winfrey said in an interview with CNBC. “And to the extent that there is a problem, sometimes someone has to come into your home … the same way it is for an electrician or plumber.”

The first step to changing a less favorable view of the consumer is with “pricing and packaging that creates more value than you can replicate anywhere else in the market,” he said.

Spectrum said it will charge up to $30 a month for the 500Mbps Internet plan or $40 a month for the 1GB service, when either comes with two cell lines or cable TV. The company is also increasing the base Internet speed for current customers at no additional cost.

The company also said it plans to be upfront about costs. Under its new plan, taxes and fees are covered, there are no annual contracts and pricing is guaranteed for up to three years, it said. Charter even eliminated the 99 cents it had imposed on most of Spectrum’s pricing in the past.

In addition, Spectrum has committed to giving customers credits when the company’s customer service does not live up to its promises or for internet outages that are beyond the customer’s control but are due to a problem on the company’s part and last more than two hours. Service issues, such as those caused by weather, natural disasters or power outages, are not counted.

Life Unlimited — a new platform for Spectrum’s Internet, mobile and TV services — will roll out across its 41-state footprint this week, the company said.

“We wanted to make a bold statement about our commitment and our capabilities,” Winfrey said. “We also wanted to recognize that we’re not perfect and we’re putting ourselves under pressure, specific pressure, to make sure we can be a better service operator every month and every year from now on.”

The announced changes are some of Charter’s biggest moves since Winfrey took the helm as CEO in December 2022.

He followed Tom Rutledge, who held the position for a decade and turned a relatively small cable company into the second largest cable company in the US through acquisitions of Time Warner Cable and Bright House Networks in 2016. Winfrey was CFO at the time and spearheaded the mergers.

Winfrey recalled the various investments and advances cable companies have made over the years: specifically in broadband, but also in pay-TV package and landline and mobile businesses.

“Despite the value we’ve brought to the industry over the years and the investments in service and reliability we’ve made, we haven’t always gotten the full credit we deserve, and in some cases, we’ve gotten the credit we deserve because we could have done the things better,” Winfrey said.

He stepped into the top spot at a time when it was clear that growth was unlikely to return to the cable package.

Winfrey was a low-key and not widely known executive in the media industry, but he started swinging.

At an investor day in December 2022, Charter announced an aggressive capital investment plan that included putting $5.5 billion over three years into its broadband infrastructure network. The higher-than-expected spending at a time of increasing competition from 5G wireless providers sent alarms off Wall Street and the stock fell.

Charter’s share price has fluctuated widely in recent years. On September 12, 2021, the stock price was $787.12. It closed at $340.17 on Friday.

That’s in part because broadband customer growth at providers including Charter and Comcast has struggled, according to the companies’ earnings reports. Increased competition from wireless companies such as AT&T and Verizon It also played a role in the stagnation, as did a slowdown in home sales due to high interest rates.

The third quarter was the worst ever for subscriber losses in the broadband industry, according to MoffettNathanson. Charter lost 149,000 subscribers and had a total of 30.4 million home and small business broadband customers as of June 30, according to its second-quarter earnings report.

While the losses were not as significant as analysts had feared, Charter’s bright spot of growth is now its mobile business, which launched in 2018. Spectrum Mobile has a total of 8.8 million lines and has grown rapidly due to attractive promotional offers and increased mobile usage on reliable Wi-Fi networks, the company said.

At the end of 2022, Charter was announced Its “Spectrum One” plan, the first time it offered broadband, Wi-Fi and mobile in a bundle with deals that included competitive rates and, in some cases, free cell lines.

“For wireless, the ‘Spectrum One’ promotion will almost certainly prove to be domestic,” analyst Craig Moffett said in a research note in July. “Despite initially being considered shockingly aggressive, it was, in fact, a fairly modest offering.”

Moffett called mobile an “underrated growth engine” for Charter, not only because of customer additions but also because of growth in average revenue per user, or ARPU, a metric often used by cable companies.

Winfrey does not expect ARPU to be affected by the new offerings.

“When I think of Wall Street, I think of the customer,” Winfrey said. “If you focus on the customer, deliver great customer service, save money, deliver value, then your capital markets strategy, your regulatory strategy, all of that will fall into place.”

Customers are quickly downgrading pay TV across all providers, including Charter. But the company has voiced its efforts to preserve the business, especially under Winfrey’s leadership.

The biggest moment came in 2023 when DisneyNetwork-owned networks made a killing for Charter customers, and Winfrey called the pay-TV ecosystem “broken” as she pushed for a renewed deal with Disney.

The latest offers with Discovery by Warner Bros and AMC Networks it was early renewals. This is relatively unusual in an industry where transfer negotiations often come to a dead end.

Map last year too started offers its own streaming devices, known as Xumo, through a joint venture with Comcast. The device gets rid of the cable box and gives consumers a way to access both cable and streaming apps in one place.

“We still have hurdles to overcome,” Winfrey said, noting that Charter’s goal is to offer all of the ad-supported streaming apps owned by the major developers it negotiates with in the cable package by the first half of 2025.

However, NBCUniversal’s Peacock is still not part of that roster. A Charter spokesman said the company is not discussing renewals and declined to comment.

Revelation: Comcast is the parent company of NBCUniversal, which owns CNBC.

Correction: A graph in this article showing changes in residential Internet subscribers has been updated.