Charter keeps its cool as competition from fiber overbuilders looms

Charter Spectrum broadband
The CFO said Charter has a number of different “capital efficient” tools in its arsenal “to make sure that we can deploy a network that is ubiquitous in its ability over the next five, ten years to be 10 gigabit symmetrical.” (Charter Communications)

Charter Communications CFO Chris Winfrey brushed off the idea that it should be concerned about increased competition from fiber overbuilders, insisting the company has the network and marketing capabilities necessary to stay ahead of the game.

Speaking during a Bank of America investor conference, Winfrey noted such competitive activity is “not new. We’ve had fiber overbuild taking place frankly at higher rates than we see today in the past and we’ve been able to grow in that marketplace.” He added “to the extent that either the product needs or the competitive marketplace evolves, we won’t be shy, we’re not afraid to invest.”

The CFO said Charter has a number of different “capital efficient” tools in its arsenal “to make sure that we can deploy a network that is ubiquitous in its ability over the next five, ten years to be 10 gigabit symmetrical.”

Winfrey explained Charter has already migrated its network to DOCSIS 3.1 and is currently working on physical and virtual node splits which provide “significant runway for capacity.” It is also continuing to reclaim bandwidth from its video network by converting to an MPEG-4 environment so it can allocate additional channels for broadband, he said. Additionally, the operator plans to invest in a high-split architecture “in markets where we think it’s attractive to do so and maybe as a bridge to us transitioning to DOCSIS 4.0.”

Charter currently plans to run fiber-to-the-home for most of its rural build projects. As it eventually moves to DOCSIS 4.0, Winfrey said “there may be pieces of the existing network where you take a look and say ‘gee the opportunity here is we can do a fiber overlay in a similarly attractive way as we can do DOCSIS 4.0.’ So we’re going to have a variety of different technologies and tools available to us and the cadence of that will really be dictated based on competition and product needs.”

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Though Winfrey made similar comments in November 2020, his renewed expression of confidence came after a range of fiber players including AT&T and Frontier substantially upped their build targets for the coming years.

The CFO reiterated the company is focused on growing penetration rates within its footprint, noting it currently has 54 million passings but only around 30 million internet customers. Beyond providing competitive speeds and pricing, he said it aims to leverage its mobile MVNO offering and package its services “in a way that’s either not available to competitors or is difficult for them to follow.”