Export Compliance Daily is a Warren News publication.
Avoids MVNO

Charter to Try CBRS Small Cells for Mobile Network

Charter Communications will launch a field trial early next year that pairs its Wi-Fi service with citizens broadband radio service (CBRS) band small cells for mobile subscribers, letting it offload wireless traffic that otherwise would be on Verizon's network through the companies' mobile virtual network operator (MVNO) agreement. The test will involve thousands of pole-mounted small cellsites in an unnamed designated market area, CEO Tom Rutledge said Friday as the company announced Q3 results. Charter bought 210 licenses in 106 counties in the 2020 CBRS auction. Rutledge said Wi-Fi with CBRS has "an opportunity to make a significant change" in how much traffic is on Charter's network vs. using the MVNO.

Sign up for a free preview to unlock the rest of this article

Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.

Charter stock took a hit as the company announced slower broadband growth. It said it added 243,000 residential internet customers in Q3, compared with 351,000 in Q3 2019, pre-COVID-19 pandemic. Chief Operating Officer Chris Winfrey said residential consumer activity and churn are taking longer than expected to return to normal levels. Churn, at historically low levels, reduces sales opportunities, he said. An upside is a lower mix of subscribers on promotional pricing as subs stay longer, he said. Also, expenses for sales and installation are lower, with fewer service calls and truck rolls, he said. He said when churn levels return to normal, some of those benefits will reverse. Charter shares closed at $674.89, down 4.4%.

Along with lower churn, the 2020 lockdowns likely pulled forward some broadband demand, all of which contributed to slower data growth in the back half of this year, Pivotal Research analyst Jeff Wlodarczak emailed investors. He said Charter's pushing of fixed/wireless bundles and its continual raising of broadband speeds gives it room for more data sub growth. He called it "unlikely" that the data subs slowdown indicates a longer-term slowdown due to increased competition.

"We get that everyone is obsessed with broadband growth," MoffettNathanson's Craig Moffett wrote investors. But he said the Charter and Comcast slowdowns (see 2110280016) are indicative of a reverse in new household formation during the pandemic.

In the face of constantly growing data demands, Charter is increasing network capacity and speeds using multiple technologies that include splitting nodes, Rutledge said. He said it's developing a DOCSIS 4.0 architecture and rollout for 1 Gbps upstream and down. Charter said it also is starting to test high-split broadband networks in some markets. High-split networks -- with a larger proportion of spectrum dedicated to upstream traffic -- are a way of upgrading a network and adding capabilities for new products, he said. He said non-video internet customers used upward of 600 Gb monthly during the quarter, and close to 20% of them consumed 1 Tb a month.

Asked about the possibility of its mobile and wireless packages merging into one offering, Winfrey said it's "an interesting concept we are keeping our eye on." He said the model, on a per-household basis instead of a wireless per-line basis, is still being worked out.

Charter finished Q3 with 28 million residential broadband customers, up 1.1 million year over year, 15.3 million residential video subs, down 400,000, 8.8 million residential voice customers, down 500,000. Its 3.1 million mobile lines on Sept. 30 was up 1.1 million year over year.