Charter Loses Fewer Pay TV Subs, Adds More Broadband Users Amid Pandemic

Charter CEO Tom Rutledge
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Charter CEO Tom Rutledge

CEO Tom Rutledge lauds the firm's "ability to service existing customers with significantly more data, and install new customers at an accelerated rate."

Cable operator Charter Communications, in which John Malone's Liberty Broadband owns a big stake, on Friday reported that it lost 70,000 pay TV subscribers in the first quarter, fewer than in the year-ago quarter. It also added more broadband users than in the year-ago period during what was the first quarter to be affected by the novel coronavirus pandemic.

Charter chairman and CEO Tom Rutledge said that recently improved video subscriber trends "may be temporary" due to lockdowns and "may reverse in an economic downturn." Some analysts have predicted that the unemployment and recession caused by the pandemic could boost pay TV subscriber losses once stay-at-home orders are lifted. 

The company has kept customers who can't pay amid the crisis connected. "As part of our pledge to the FCC, Keep Americans Connected customers represents customers who would have been disconnected by quarter end as a result of non-payment under our normal policies," it explained. "As of quarter end, approximately 140,000 residential customers had requested protection from disconnection under the pledge of which 1,000 would have been disconnected for non-payment under our normal policies."

Added Charter: "At the end of April, 36,000 of those 140,000 customers' outstanding balance is now fully current, and in total nearly 50% have made partial or full payments since entering disconnection protection. However, at the end of April, 67,000 of those 140,000 customers now have past due balances beyond the point of normal disconnection."

Said Rutledge: "Our ability to service existing customers with significantly more data, and install new customers at an accelerated rate, is a direct result of the commitment of our employees and the $40 billion of investment we have made in our infrastructure in just the last five years."

Charter lost 70,000 residential pay TV subscribers in the first quarter, compared with a loss of 152,000 in the year-ago period. As of the end of March, Charter had 15.55 million residential video customers.

The company added no small and medium business video customers in the first quarter, compared with the addition of 7,000 in the year-ago period, ending March with 524,000.

The broadband business once again led the growth charge in the first quarter as Charter recorded 563,000 residential internet subscriber net additions and 19,000 new internet business customers for a total gain of 582,000, up from 428,000 in the year-ago period.

The company also added 290,000 mobile lines in the quarter, bringing its growing mobile business to a total of 1.37 million lines.

For 2020, management previously forecast weaker video subscriber momentum. 

The company's quarterly earnings came in at $396 million, compared with $253 million in the year-ago period. Adjusted earnings before interest, taxes, depreciation and amortization, another profitability metric, rose 8.4 percent to $4.4 billion. First-quarter revenue increased by 4.8 percent to $11.7 billion.