Charter Communications, Inc. (NASDAQ:CHTR) Q1 2024 Earnings Call Transcript

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Chris Winfrey: So, I’m not going to provide a detailed timeline for the timing to reaccelerate just because I want to be conservative and recognize that it’s a very fluid space. I mean, clearly, we have ACP going on right now, which is going to be a onetime hit. You have cell phone Internet where it will reach capacity, and the timing of that isn’t entirely clear. And then there’s fiber upgrades, which have been announced and are pretty far along from what was actually announced. So I think if you put that all together, though, and flip it and say, well, get past ACP, and the pace of fiber upgrades is relatively stable, and I think over time should actually start to decline. Cell phone Internet will run out of capacity, and you’re already starting to see some signs of [something] (ph) that paring back, all of which bodes well.

And then you combine that with the fact that when you look at our — the quality of our Internet product, in 100% of the market, particularly and even more so in those that don’t have a gig overlap, which is about half and then you combine that with the unique ability to provide a very attractively priced mobile product that’s actually the fastest mobile product in the business simply because it largely rides on our gigabit wireless infrastructure, we have a structural advantage for now and many years to come, not only just on quality, but the ability to save customers hundreds and even thousands of dollars. And so I sit back and look at that and say, it isn’t a question of if. It’s just a question of when. And as some of these short-term pressures pair back, that’s when you’ll start to see it turn.

Honestly, we haven’t been the best at predicting the exact timing of that. And so I said last quarter, we owned that. And so I want to be careful that I’m not overextending ourselves here either. But I think it’s more important just to take a step back and look at what is the product we have, what’s the network capabilities we have. It’s only getting better. If you then tack on to that the rural passings that you mentioned ex-rural, so I did that ex-rural. But if you add on to that the subsidized rural passings where it’s just math in terms of the penetration, the net additions that we’re going to get on the back of that investment, I still think the future’s very, very bright for Charter.

Jessica Fischer: On the mobile working capital side, so you pointed out, without a doubt, the drag on working capital is driven by the number of phones or other mobile devices that you sell subject to EIP notes. And so if we were to end up with additional devices because of having additional mobile customers as a result of our work on ACP or if we end up with some additional devices because of the Anytime Upgrade program, which is also possible, there could be some acceleration in that drag. What I would tell you on the other side of that is, as we’ve been building our mobile business, we haven’t taken advantage of some of the financing options that are available for us related to having those EIP notes as part of our overall asset stack.

And it hasn’t — it hadn’t yet made sense for a wide variety of reasons, including just sort of building the scale for a program like that to make sense. So I think it’s also possible that we could offset some of that drag in working capital by working through some of those financing mechanisms. And certainly, as we’ve been building, I think we’re reaching a size at which that becomes a more viable option.

Steven Cahall: Thank you.

Chris Winfrey: Good. Well, thank you, everyone, for joining the call. And look forward to talking to you again on the next one.

Stefan Anninger: Thanks, operator.

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