Charter Communications CEO Tom Rutledge credited his company's self-installation program, as well as marketing campaign around self-installs, for weathering the COVID-19 related storm of new subscribers in the first quarter
During Friday morning's Q1 earnings call, Rutledge said that at the start of the first quarter Charter was already working towards self-installs by its customers. By contrast, Altice CEO Dexter Goei said on his Thursday earnings call that his company has yet to embark on a self-install model for its DOCSIS and fiber-to-the home broadband services.
"We were already fairly far down the road in the customer self-service model," Rutledge said. "We were fortunate when we got hit with what we did, and with the marketing tactics we employed, that we were able to actually deal with it because we started the quarter in the 55% range of self installation. We were at about 70% when everything changed and we're over 90% now for self-installation.
"The fact that we were already at 70% allowed us to get to 90% with a fair degree of operational efficiency. We were prepared, fortunately, at the moment. We've created, in the last 60 days, 10,000 new broadband customers a day, so 600,000 in 60 days. That's a lot of work and we've done that pretty seamlessly."
In the first quarter, Charter added a total of 580,000 residential and SMB internet customers. Charter is also taking part in the Federal Communications Commission's "Keeping America Connected" pledge to keep customers connected during the coronavirus pandemic.
As of March 31, Rutledge said Charter added approximately 120,000 customers, which also included video, voice and mobile services, through the Keeping America Connected program, "with many more installed in April."
"By the end of the school year we expect this offer will have helped approximately 400,000 students and teachers and their families continue schooling through remote learning," Rutledge said.
Rutledge said that with different areas Charter's footprint impacted as the coronavirus peaks and declines, it's hard to predict what will happen the rest of the year. But overall, the COVID-19 crisis has changed Charter's business model and how customers use its services.
"I think that's a big change in the business going forward," Rutledge said of the self-install model. "I think people using Zoom and other kinds of two-way communications in a work-like environment in their homes is probably advanced by a number of years for the long term."
During the earnings call, Rutledge went out of his way to commend the company's 95,000 employees. Charter came under fire for initially not allowing its employees to work from home at the start of the coronavirus pandemic.
Charter's Q1 numbers
Charter lost 70,000 video subscribers in the quarter, which was an improvement on the 152,000 it lost in the same quarter a year ago. Charter's total internet subscribers increased by 6% to 25.5 million while net additions of internet customers was up by 42% in the quarter. Across video, internet and mobile, Charter's residential and business customer base increased by 4.5% to a total of 29.7 million.
Residential revenue grew by 4.2% while SMB revenue grew by 5.4%. Rutledge said that going forward, the SMB sector would face some hardships as smaller businesses struggle to re-open. On the other hand, the enterprise sector is more likely to remain stable because large enterprises are reluctant to change service providers. Driven in part by the sell-off of Navisite, enterprise declined 3.2% year-over-year
For the quarter, Charter's net income increased to $396 million, or $1.86 per share, from $253 million, $1.11 per share, a year ago. Revenue increased to $11.74 billion, which was just short of FactSect's consensus estimate of $11.78 billion. Charter posted year ago revenue of $11.21 billion.