Broadband internet is “absolutely still a growth business,” the CFO of cable giant Charter Communications told an investor conference on Wednesday.
“There is a lot of potential to continue to grow” beyond expanding the company’s broadband footprint, Jessica Fischer said during the 24th annual Credit Suisse Communications Conference in a session that was webcast. She touted cable broadband infrastructure as superior to many rivals, adding that where there was competitive technology, Charter could succeed with offering “differentiating” products, such as mobile services.
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Asked about second-quarter broadband subscriber trends, including investor worries that some companies could lose broadband customers on a net basis in the period, Fischer acknowledged a special challenge in customers moving from the Emergency Broadband Benefit (EBB) to the Affordable Connectivity Program (ACP), the FCC’s new benefit program subsidizing internet services.
A “small portion of the subsidized subscribers” either didn’t opt in to continue their service and transition to ACP or didn’t meet the ACP requirements, particularly the one that they use service in each 30-day period, she said. Charter expects that to have a total impact of 60,000-70,000 subscribers in the second quarter. Excluding that impact, “we do expect positive total net internet adds in the quarter, and I think that we will have positive total internet additions even when including” the impact, the Charter CFO said.
The executive was also asked about a big partnership with fellow cable giant Comcast. Together with Charter, it recently unveiled a joint venture that aims “to develop and offer a next-generation streaming platform on a variety of branded 4K streaming devices and smart TVs.” The goal is to build on Comcast’s Flex streaming product to offer consumers a platform to access multiple streaming apps, and in the process take aim at rivals like Roku. Comcast offers the Flex streaming device to internet-only subscribers free of charge to allow them to stream on-demand TV shows and movies, as well as some live content. Importantly, it allows users more than 250 apps, including the likes of Netflix, Amazon Prime Video, Hulu, Disney+, HBO Max, Paramount+, Discovery+ and “tens of thousands of free choices from Peacock, Xumo, Pluto, Tubi and more.” The new venture also promises to offer app developers, streamers, retailers and hardware manufacturers “the opportunity to reach customers in major markets across the country with the platform,” the companies said.
“This may end up being a Roku-killer,” Ian Greenblatt, managing director of TMT (technology, media and telecom) intelligence at J.D. Power, recently told THR. “It offers a great way to let consumers cord-shave and to keep the interface they prefer, while also allowing for the monetization of another platform’s ad inventory and the resulting data.”
Fischer touted that the venture brings together two cable companies with an “aptitude for the (content) aggregation side” and strong consumer interactions. “Our opportunity to reach scale there, and to do so pretty quickly, is very good,” she said, adding that the deal was “consistent” with Charter’s pay TV strategy of offering consumers various options. “We have shrunk more slowly than some of our peers on the video side,” she said.
How does she feel about mergers and acquisitions? “We like the cable business,” Fischer said. “If we can find opportunities where we can create … value to our shareholders by going out and doing acquisitions (at accretive prices), I think that we will continue to do that.” She added that she hoped that “there might be private businesses out there that are under more pressure to sell than they were before,” concluding: “If they are available, I think that we will go there.”