Charter sets plan to enter the SD-WAN game

Charter Communications sign (use this one)
Besides its SD-WAN debut, Charter has also been expanding the availability of other services.

Charter Communications has indicated that it is getting ready to debut its own SD-WAN service, news that signals the cable MSO’s movement toward business-grade software-based services.

Thomas Rutledge, president and CEO of Charter, told investors during its third-quarter earnings call that the company is going to offer the SD-WAN service, but he did not provide a specific timeline or in what markets it would initially be available.

Tom Rutledge
Tom Rutledge

“In the coming months, we expect to launch a software-defined wide-area network solution that should increase our addressable opportunity and provide businesses with another choice as they migrate from legacy technologies,” Rutledge said during the earnings call, according to a Seeking Alpha transcript.

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When Charter does eventually release its own SD-WAN product, it will be the second major cable MSO to make available such an offering to its business customers. Fellow cable MSO Comcast officially launched its SD-WAN service in September that is being powered by its SDN network.

Besides its SD-WAN debut, Charter has also been expanding the availability of other services like Spectrum Enterprise Hosted Voice, a core component of the cable MSO’s hosted communications portfolio. Available now in 14 states, Charter plans to offer the service across Spectrum Enterprise’s national footprint by the end of 2017.

As a fully managed cloud-based business solution, Spectrum Enterprise Hosted Voice delivers unified communications by replacing on-premises Private Branch Exchange systems with virtual environments accessed through a dedicated and secure fiber connection. Spectrum Enterprise offers business customers a complete solution including design and implementation services, equipment and software installations and training and support.

“We're also improving the product set for Enterprise, deploying our hosted voice product to 13 more states in the third quarter, with plans to launch that product across our entire footprint by the end of this year,” Rutledge said.

These service efforts are certainly paying off for Charter’s Spectrum business unit. Total third-quarter commercial revenues rose to $1.5 billion, up 8% year over year and driven by 7.4% SMB revenue and 8.9% enterprise revenue growth.

The cable MSO noted that SMB and Enterprise sales have risen, and it is managing the transition to highly competitive pricing in these service markets. Charter’s Enterprise group debuted a series of national pricing structures designed to drive higher customer growth.

Rutledge said the new pricing format is achieving its growth targets for the Enterprise segment.

“That pricing structure is working well, and we saw higher year-over-year enterprise product net adds in the third quarter,” Rutledge said. “The short-term revenue effects of that market share growth strategy are similar to what we've been seeing where we're making changes to pricing and packaging in residential and SMB markets.”

During the third quarter of 2017, SMB customer relationships grew by 40,000, versus customer growth of 34,000 during the third quarter of 2016. SMB PSUs increased 85,000, compared to 73,000 during the third quarter of 2016. As of Sept. 30, 2017, Charter had 1.5 million SMB customer relationships and 2.6 million SMB PSUs.