As consumer behavior normalizes amid the pandemic, Charter Communications Inc. Chairman and CEO Tom Rutledge foresees the broadband sector returning to more traditional subscriber growth patterns.
Like other cable players, Rutledge said Charter saw "an enormous amount of growth pulled forward" during the outset of COVID-19 as people worked and learned from home.
The executive, speaking at the UBS Global TMT virtual conference on Dec. 8, pointed to Charter registering 850,000 net broadbands adds during the second quarter of 2020, the first full quarter when the U.S. felt the social and economic effects of the virus.
Opposite reaction
Rutledge noted at the conference that while there was a very quick infrastructure deployment after COVID-19's arrival, "Now you have sort of the opposite of that, which is the unwinding of all those people that just put themselves in place and kind of who are going back out into their normal behavior patterns."
With that in mind, Rutledge expects Charter's broadband segment to reflect more of an average growth pattern ahead. "I do think that the opportunity to grow the business is pretty much unchanged and if you look at it on a four-, five-year growth rate trend. It is pretty solid and pretty straightforward and pretty consistent," he said.
During the third quarter of 2021, Charter added 265,000 new residential and small- and medium-business internet customers, versus 537,000 and 380,000 in the corresponding reporting periods in 2020 and 2019. Charter added 2.2 million total broadband customers in 2020, compared with 1.4 million in 2019.
Comcast scorecard
The remarks by Rutledge, who did not project Charter's fourth-quarter net subscriber adds, follow commentary by Dave Watson, CEO of Comcast Corp.'s Cable Communications unit, who implied adds would slow in the final reporting period of 2021.
"We're going to wrap up the fourth quarter and deliver a really solid year," Watson said Dec. 7 at the virtual conference. "We're going to be around 1.3 million broadband additions for the year."
Comcast finished the nine months ended Sept. 30 with 1.15 million high-speed subscriber adds. Comcast's stock took a hit after Watson's comments.
Comcast tallied 538,000 broadband adds in the fourth quarter of 2020, when it totaled 1.97 million new subscribers for the full year. That compares with a net growth of 492,000 in the final reporting and 1.41 million of these new customers for all of 2019.
Altice attrition
Meanwhile, broadband subs at Altice USA Inc. could decline this year. Altice USA CEO Dexter Goei expressed hope at the conference Dec. 7 that the company's broadband business would realize growth in the fourth quarter but said it is trending to be slightly negative.
That, he said, could lead the company to be down between 5,000 to 10,000 broadband customers in 2021, at the lower end of its estimates.
Goei said that while gross adds have meaningfully improved, churn continues to be difficult to predict, with losses in the areas where Altice USA competes with Verizon Communications Inc. In non-Verizon FiOS markets, Goei said Altice USA is continuing to grow its broadband business.
Telco templates
Verizon plans to rapidly expand its home broadband business by growing its fixed wireless network. Verizon expects to reach 70 million total broadband passings by 2025, composed of 50 million fixed wireless passings and 20 million on Verizon's Fios fiber network.
"The ability to go from being just a regional player on the broadband, as we were a couple of years ago, to a nationwide [player], and how we market to our customer base in terms of offering those products together, is a significant part of the growth opportunity," Verizon CFO Matthew Ellis said in November.
AT&T Inc., Frontier Communications Parent Inc. and T-Mobile US Inc. also all have ambitions to expand their home broadband offerings, either through greater fiber deployment or fixed wireless. Analysts have said this could lead to more competition in the broadband space than ever before.