Charter loses home internet customers, blames end of COVID subsidy program

Enlarge / Charter CEO Tom Rutledge speaks at the New York Times DealBook conference in New York on Thursday, November 10, 2016. Getty Images | Bloomberg

The two largest home Internet service providers in the United States both lost subscribers in the second quarter of 2022.

On Friday, Charter Communications reported a loss of 42,000 residential internet customers, leaving 28,259,000 homes purchasing Spectrum internet service. Charter also gained 21,000 small and medium business (SME) customers, bringing its number to 1,994,000 in this category.

Charter is the second largest Internet service provider after Comcast. Last week, Comcast reported a loss of 10,000 residential broadband customers, leaving it with 29,826,000 Internet-subscribed households. Comcast also gained 10,000 business broadband customers, giving it 2,337,000 business subscribers.

Loss of subscribers is unusual. For Comcast, this was the first quarter in its history in which it failed to gain broadband subscribers.

Charter has gained more than 7 million home internet customers since its purchase of Time Warner Cable in 2016 made it the second largest cable company with 20.7 million home internet subscribers at the time. Charter added more than 1.1 million residential Internet customers in 2021 and another 164,000 in the first quarter of 2022.

Charter blames end of COVID grant program

Charter's downturn might have started sooner if not for the COVID-related Emergency Broadband Benefit (EBB) program, which offered $50 per month grants to low-income people and those who had lost their income during the pandemic. Charter said it lost 59,000 residential and SMB subscribers in the second quarter as a result of this program being replaced by the Affordable Connectivity Program (ACP), which offers $30 per month and has more restrictive eligibility requirements. p>

"During the second quarter, we added 38,000 Internet customers excluding the adverse impact related to the termination of the Emergency Broadband Benefit program and the additional definition requirements of the Affordable Connectivity program," said the CEO of Charter, Thomas Rutledge, on a call with analysts. , according to a Seeking Alpha transcript.

Charter's second-quarter revenue was $13.6 billion, up 6.2% year-over-year. Net income was $1.5 billion, up 44.2% from the second quarter a year earlier.

Charter's Chief Operating Officer, Christopher Winfrey, said the company is confident that "Net Internet Additions will pick up...our recipe for broadband growth has always been to be competitive and competitive." 'have competitive prices in the market.'

Charter pinning hopes on new federal funding

Like Comcast, Charter appears to be struggling to add subscribers, as it has already signed up just about everyone who wants its service and lives in a home within Charter's network area. Comcast and Charter do not compete with each other despite being the two largest cable companies.

Charter is expanding its network into new areas with money from the Federal Rural Digital Opportunity Fund (RDOF) and other grant programs. Rule...