Cable operator Charter Communications is now offering customers across its 41-state footprint access to its $49.99 per month Spectrum One broadband and mobile service bundle. But in the background, the operator also moved to hike its standard pricing, which Spectrum One customers can expect to pay once their 12-month promotion wears off.
Executives mentioned plans to hike broadband prices on Charter’s Q3 2022 earnings call, stating the move was a response to inflationary pressure. However, they didn’t provide specifics.
In a statement to Fierce, a Charter representative confirmed rack rates for its service tiers will be increasing $5 per month. The change will take effect in most markets starting November 1. That means the cost of its 300 Mbps tier will jump to $79.99 per month, its 500 Mbps product will run $99.99 and its 1-gig offer will rise to $119.99. The bump will apply to customers who don’t have Spectrum TV at all or take a Spectrum TV streaming option (i.e. not its cable TV service).
The representative indicated the price increase is the first one since it implemented a $5 per month hike in December 2020.
In a note to investors, the analysts at New Street Research estimated “that 9.5MM customers could see the increase, which should boost annual broadband ARPU by 2.6%.” They predicted the move will help boost residential revenue in Q4 2022 to $10.4 billion.
The hike takes the cost of Charter’s base plan well over the $70 mark that J.D. Power recently highlighted as the price below which consumers are most satisfied with their internet service. However, the operator is far from the only one raising prices.
AT&T implemented a $3 per month increase for AT&T Internet customers in the first half of the year, while Altice USA increased the promotional rate of its service by $10 around the same time. Verizon also raised its rates, though its moves impacted wireless customers.
It is unclear whether or how much the price increase will impact churn. It’s worth noting that Charter is battling increased competition from fixed wireless access players. Notably, two key opponents in this space – Verizon and T-Mobile – have offered broadband customers long-term pricing guarantees.