Charter loses video subscribers, sees Internet gains

Charter Communications (NASDAQ: CHTR) lost about 66,000 video subscribers year-over-year in the first quarter and gained about 353,000 broadband subscribers during the same time period, according to a company earnings report.

During the time period in question, Charter completed its acquisition of Cablevision's (NYSE: CVC) Bresnan Broadband Holdings and subsidiaries, thus adding cable systems that serve about 375,000 residential and business customers.

First quarter revenues were up 7.5 percent year-over-year to $2.2 billion, led by "growth in Internet, video and commercial revenues," the company said in an earnings release.

Video revenue was up 6.3 percent, from $1.025 billion to $1.090 billion. Internet revenue was up 15.4 percent from $534 million to $616 million, and commercial revenues were up 20 percent from $195 million to $234 million year-over-year. Voice revenues, however, dipped 18.5 percent from $184 million to $150 million.

Charter said it now has 4 percent more "residential customer relationships" (5.67 million versus 5.45 million) and 24 percent more residential non-video customers (1.478 million versus 1.189 million). For the quarter, the carrier said it lost 5,000 video subscribers--compared to a loss of 10,000 a year ago--and gained 12,000 Internet subs, versus 10,000 gained a year ago.

"In the past two years we have repositioned Charter to provide a superior set of products and services to our customers. And we are beginning to see the results in our operating metrics, customer satisfaction and financial performance," Charter President-CEO Tom Rutledge said in the release. "As we move to an all-digital platform over the course of this year, we are unleashing the inherent superiority of our high capacity two-way interactive network."

The company is especially emphasizing its new product suite, Charter Spectrum, which Rutledge said "will deliver the most HD channels, video-on-demand and the fastest Internet service across the vast majority of our markets, all packaged with high quality service at a competitive price point."

Charter began introducing Charter Spectrum in all-digital markets in Dallas-Fort Worth and Greenville, S.C.

The Bresnan acquisition was evident in the fact that residential primary service units (PSUs) grew by 206,000 in the quarter versus 140,000 a year ago. In the first quarter, Charter said, it added 18,000 PSUs even as video and Internet passings remained flat and penetration across all business phases was basically unchanged.

"Residential customer relationships grew by 112,000 from 61,000 in the first quarter of 2013 with triple play sell-in improving year-over-year to over 50 percent of total residential video sales," the company release said, noting that by the end of the quarter Charter had completed 30 percent of an all-digital initiative that allows the company to "offer more advanced products and services and provides residential customers with two-way digital set-top."

For more:
- Charter has this earnings release

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