Charter Business' pricing, packaging changes drive up revenues to $294M

Charter's (NASDAQ: CHTR) business services division is reaping the benefits of realigning the unit to focus on the specific needs of small businesses and larger enterprise customers as revenues rose 12.3 percent year-over-year to $294 million.

Tom Rutledge, Charter

Rutledge

Speaking to investors during the fourth quarter 2015 earnings call, CEO Tom Rutledge said that the pricing and realignment of its segments was a key contributor to the growth of the business unit.

"In Commercial, we also continued to drive accelerating customer growth," Rutledge said. "After we separated our Small Business and Enterprise segments early last year, we launched new pricing and packaging to both marketplaces and are seeing the results we expected."

Like other cable operators, the initial crown growth jewel is in the small to medium business (SMB) space where Charter Business reported that customers grew 17 percent.

Within the SMB segment, primary service unit (PSU) growth accelerated 30 percent from 2015 and 47 percent year-over-year in the fourth quarter. The provider added 28,000 SMB PSUs versus 19,000 in the prior year.

Rutledge said the improvement in PSUs "is being driven by a greater focus on customer types following the separation of our SMB and Enterprise groups, and by the launch of new pricing and packaging to the SMB marketplace in early 2015."

Rutledge said he expects business services to follow a similar growth path to that of the residential segment.

"In time, that accelerating commercial unit growth will drive faster revenue growth as it has in residential," Rutledge said. "Business services remains an area of significant long-term opportunity for Charter and we have demonstrated that we can grow business customers faster with a highly-competitive operating strategy."

In order to appeal to the complex needs of larger businesses in a variety of industries as well as government and educational institutions, carriers and partners, Charter Business launched enterprise.spectrum.com during the quarter.

For more:
- see the Seeking Alpha transcript (reg. req)

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