As companies scramble to build out fiber networks to capture market share in the increasingly competitive broadband market, Charter Communications chairman and CEO Tom Rutledge told an industry audience Wednesday that wireless connectivity will separate the winners from the losers.
At the Goldman Sachs Communacopia + Technology conference Wednesday, Rutledge, when asked about the company's competitive stance against fixed wireless and fiber broadband competitors, said the combination of its broadband and mobile networks only makes it stronger.
Charter does well in markets where it competes with fiber and fixed wireless broadband, Rutledge added. Its mobile network can offer speeds up to 1 Gigabit per second today, and could get even faster as more and more traffic is shifted from its Verizon MVNO to its own WiFi network, he said.
“We can have the fastest mobile product around,” Rutledge said. “Eighty percent of the bits are actually on the WiFi network and we’ve got a pathway to put even more traffic onto the WiFi network and to CBRS.”
He added that more and more of the business is wireless — there are 450 million devices connected to Charter’s network and most are wireless — which also gives his company the upper hand against the competition.
“I think we have a competitive advantage there because we have advanced WiFi, we have an integrated mobile product with that, and even our future video product with the Xumo joint venture is wirelessly delivered,” Rutledge said. “We’re going to an environment where every device connected to our network is wireless.”
Charter entered into the JV with Comcast in April, where Comcast is licensing its Flex streaming platform as well as the retail business of its XClass TVs and its Xumo streaming service. Charter will contribute $900 million over several years.
That Comcast partnership also could serve as a boost to the video business, which continued to lose subscribers in Q2, but could be on the cusp of an evolution in part spurred along by the JV.
“I don’t think it’s about to precipitously fall apart,” Rutledge said of the current video business, adding that reductions in subscribers and increases in costs will likely remain for the next several years. But as the video business moves to an app-based model, the Comcast JV puts Charter in a strong position.
“I think this new platform that we’re developing with Comcast, the joint venture, gives us an opportunity to monetize video and to use our customer relationships to drive that platform deeper into the market and to create an advertising business and a transaction business where we monetize the platform by helping direct-to-consumer media companies get more customers and take a fee for doing that, helping them sell the product,” Rutledge said. “The other opportunity that comes from it is advertising. To the extent that you get a big platform deployed and you’ve got viewership, you can monetize that and get better CPMs because it’s targeted advertising.” ■