Cableco Charter Communications added 63,000 broadband internet subscribers in the third quarter. Net adds in new markets hit 31,000 in the third quarter, accelerating from 26,000 last quarter. A note from New Street Research said the company passed fewer homes in new markets than expected, “and so the pace of penetration growth is tracking ahead of expectations.”
Charter’s third-quarter revenue of $13.6 billion grew by 0.2% year-over-year, driven by residential internet revenue growth of 3.7%, residential mobile service revenue growth of 33.8% and other revenue growth of 28.8%, mostly driven by higher mobile device sales.
Free cash flow of $1.1 billion decreased from $1.5 billion in the prior year, due to higher capital expenditures, mostly driven by Charter’s network evolution and expansion initiatives.
As of September, Charter had a total of 32.2 million residential and SMB customer relationships, excluding mobile-only relationships.
“We continue to make significant progress against the multi-year strategic initiatives we outlined last year,” said Chris Winfrey, President and CEO of Charter. “These initiatives drive continuing improvements in the quality of our products, and when combined with our customer-friendly pricing and packaging and high-quality service, will drive significant, long-term growth in shareholder value.”
On its earnings call, CEO Winfrey said that “given the greater subsidized rural passings and construction opportunity,” Charter may even look to partially fund those new markets by “very modestly slowing our network evolution plan” — which includes upgrades to its hybrid fiber-coaxial footprint.
Winfrey said Charter expects to add approximately 300,000 new subsidized rural (NSR) passings in 2023 and to accelerate that pace in 2024. In the third quarter, 78,000 rural passings were activated. He added that Charter is ahead with its Rural Digital Opportunity Fund (RDOF) builds and “will end up with more (rural) passings than originally expected.”
However, NSR said Charter’s results in core markets were “disappointing,” with adds of 47,000 way below their estimate of 79,000. While NSR expected stabilization in pressure from fixed wireless access (FWA), Charter continues to see some impact from FWA competitors in the lower usage and price sensitive customer segments of its residential and SMB businesses.
Charter is raising its capital-expenditures (CAPEX) forecast for the year as it pours billions back into upgrading its network and its Xumo business. The company now expects to spend about $7.2 billion in CapEx, up from prior guidance of $6.5 billion to $6.8 billion. That excludes line-extension CapEx, which is still expected to be about $4 billion for the year. The $7.2 billion will be put to work upgrading and maintaining the cable company’s network. Some of it will also go toward sending Xumo stream boxes to customers. Xumo is a joint venture between Charter and Comcast that offers free ad-supported streaming TV. Charter shares fall 6%.
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This June, we noted that the FCC was exploring shared use of the 42 GHz band using in 500 megahertz of spectrum. Recently, T-Mobile and Charter voiced support for some kind of spectrum sharing scenario.
“While wireless carriers continue to require additional spectrum that is licensed on an exclusive-use basis, T-Mobile agrees that the technical characteristics of the 42GHz band, along with its separation from other millimeter wave spectrum that has already been licensed, means that the commission may wish to consider a different approach here,” T-Mobile wrote in an August 30th FCC filing.
“The commission, however, should avoid applying untested, novel sharing approaches to the 42GHz band. Instead, it should implement the nationwide non-exclusive licensing framework currently used in the 70/80/90GHz bands, with a few modifications to ensure that the spectrum will be used efficiently and may be deployed for [a] variety of advanced communications services.”
Charter has long eyed the 37GHz band as a way to bolster mobile operations in its planned 3.5GHz CBRS network. The MSO/cableco has said it could offer speeds up to 1 Gbit/s via concurrent operations in the CBRS and 37GHz bands.
Charter’s FCC filing is similar to T-Mobile’s, as it supports a “unified nationwide, non-exclusive simple shared licensing regime.” The company urged the FCC to implement the same spectrum sharing design across both the lower 37GHz band and the 42GHz band.
“Allocating the lower 37GHz band for non-exclusive use would offer 600 megahertz for innovative new wireless connectivity in the United States,” Charter noted. “The allocation of the 42GHz band alongside the lower 37GHz band would of course increase the total spectrum available for innovative new deployments by 500 megahertz.”
The 42GHz band resides in what is known as millimeter wave (mmWave) spectrum. 5G transmissions in those bands are at very high speeds, but they typically travel just a few thousand feet, and generally cannot pass through obstructions like walls, trees, glass or concrete, i.e. they require line of sight communications.
WRC 19 identified mmWave frequencies for 5G, but ITU-R WP 5D did not complete and agree on the frequency arrangements for same (revision 6 of ITU-R M.1036) until very recently. WRC 19 identified the frequency bands: 24.25-27.5 GHz, 37-43.5 GHz, 45.5-47 GHz, 47.2-48.2 and 66-71 GHz for the deployment of 5G networks and the frequency arrangements for them is in draft recommendation ITU-R M.1036 which is expected to be approved this November. Note that 42GHz is not included!
Some analysts are quite positive on mmWave communications. For example, “mmWave 5G offers a way to improve on the current situation because the bands have extremely high capacity that are able to support very large amounts of data traffic and users, although in a small area,” wrote OpenSignal analyst Ian Fogg in a post on the network-monitoring firm’s website.
Qualcomm is also an advocate of spectrum sharing in mmWave bands since at least July 2022.
Image Credit: Qualcomm
Qualcomm’s filings to open the Lower 37 GHz band to shared licensed access ask the FCC to adopt a Notice of Proposed Rulemaking (NPRM) to allocate six 100-MHz-wide priority licenses in the Lower 37 GHz band and allow each priority operator—which may be a federal government or a commercial operator—to use the rest of the band on a secondary basis. To enable these secondary operations on an interference-free basis, each priority operator would implement a technology-neutral, equipment-based rule to provide coordinated, periodic listening of the channel, referred to as long term sensing (LTS), to determine whether its secondary operations on spectrum outside its priority licensed spectrum may cause harmful interference to the priority license holder of that swath of spectrum.
Secondary operations are only allowed for communications links that sensing determines will not cause interference to the priority licensee. The coordinated sensing procedure allows each priority license holder to access all other channels (i.e., the other 500 MHz) on a secondary – and interference-free – basis, increasing overall spectrum utilization while not degrading the QoS for the priority licensee.