Charter’s TWC, Bright House acquisitions increases medium-sized business customer visibility

As Charter integrates Time Warner Cable and Bright House network assets into its fold, the cable MSO is deepening its hybrid fiber coax (HFC) and fiber networks to better respond to medium-sized and large businesses.

Tom Rutledge, CEO of Charter told investors during its second quarter earnings call that the two acquisitions gives the MSO a more concentrated ownership of assets in a particular designated market area (DMA).

“It gives you from a commercial sales perspective, a more likely footprint to serve medium-sized businesses and all the facilities those businesses pass or use within your footprint,” Rutledge said during the earnings call, according to a Seeking Alpha earnings transcript. “If you have a multi-site business, your ability to serve multi-sites with better footprint is improved, and so the commercial marketplace is also improved.”

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By purchasing TWC and Bright House, Charter immediately expanded its HFC and fiber footprint as well as interconnection agreements in a number of major markets across the United States.

Through its Time Warner Cable acquisition, Charter gained 150,000 miles of fiber and 75,000 on-net buildings. In addition to its own network, TWC has established 130 External Network-to-Network Interface (E-NNI) agreements with 25 other service providers. This allows Charter to potentially reach into larger business accounts in more U.S. markets.

No less compelling is the Bright House acquisition, which gave Charter two benefits: greater scale across number of key vertical industry segments such as healthcare, hospitality, government and education and a broader Ethernet footprint with an additional 18,000 miles of fiber. 

As of the end of the quarter, Charter's network reached 25.6 million residential and small and medium business (SMB) customers. The cable MSO’s SMB customer relationships grew by 47,000 versus 35,000 during the second quarter of 2015.

SMB primary service units (PSUs) increased by 82,000, compared to 69,000 during the second quarter of 2015. As of June 30, 2016, Charter had 1.3 million SMB customer relationships and 2.3 million SMB PSUs. The cable MSO saw its enterprise PSU amount rise 22 percent, ending the quarter with a total of 90 customers.  

Rutledge said that SMB customers in the existing TWC and Bright House will also soon be able to get access to Charter’s Spectrum product line.

“On the small and medium business side, we'll launch the full Spectrum small business product, pricing and packaging in TWC and Bright House markets in early and mid-2017,” Rutledge said.

Overall company second quarter revenues were $10 billion, up 6.6 percent year-over-year due to a 5.6 percent and 13.4 percent increase in residential and commercial revenue growth.

For more:
- see the earnings release
- read the Seeking Alpha earnings transcript (sub. req.)
- here’s FierceCable’s coverage

Related articles:
Charter to focus overbuild strategy on telco competition
Charter's Rutledge says enterprise market penetration is low, but growth prospects are good

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