Charter Communications, Inc. (NASDAQ:CHTR) Q4 2022 Earnings Call Transcript

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Craig Moffett : Two questions, if I could. First, let’s drill down on margins a little bit. I think it’s hard for all of us to sort of make sense of the wireless margins given how fast the subscriber base is growing and therefore, how high customer acquisition costs might be. How should we think about — particularly since we’re not going to see it reported separately anymore, how should we think about the margin trajectory for wireless and therefore, the margin trajectory for the business overall as you go forward? And then just one more operating question. Can you just talk about the decision in your upgrade of your physical plant to not go all the way to symmetrical speeds, but to keep your downstream speeds higher than your upstream speeds?

Jessica Fischer : So Craig, on the margins question, I would tell you, first off, we wouldn’t be willing to do the Spectrum One offer if we didn’t have some space in margin. And so our margins in that business, if you exclude the subscriber acquisition costs, continue to be quite good. And they’re getting better over time because we continue to drive down some of those business expenses on a per customer basis, things like the operating cost, what does it take to run billing and customer care. And actually, the reason that we’re pushing those into our broader reporting is that we continue to integrate the business into our broader business. And so a lot of that activity we’re dealing with a customer as one customer. And when you have a sales call, you’re selling mobile and cable on the same call.

When you have somebody call in with a question, you have agents who we’ll be capable of dealing with both things. But I think the overall trajectory, we make margin on the customers today. We have offers in the mix that we’re using to drive both mobile and broadband activity, but they work well for that. And I think we should think about them as being related to both that mobile and broadband activity. But we expect the margins to continue to grow. I think we gave some numbers in the presentation in December, and you can kind of see the trajectory that we’re on there. I think that margin expansion continues when you think about the broader product.

Christopher Winfrey : I’ll comment a little bit on the network question. And the — so your question was whether the choice to not upgrade to symmetrical. Just as a reminder for everybody, the first 15% of the upgrade is going to be with DOCSIS 3.1 high split using integrated CMTS. That will give us 2 — up to 2 by 1, 15% footprint. So if we can make that one by one, we could make that somewhere in between and make it symmetrical. But — so we have the capabilities. It’s just based on our assessment of where the market value is. 5 by 1 in the 50% of the footprint. And then what we think is a base case is 10 by 1, using 1.8 gigahertz DOCSIS 4.0 RPD in 35% of the footprint. Now — the reason we’re choosing that you can mix and match where you allocate your bandwidth based on what you think the customer demand, the marketing claims and the actual product and device capabilities are.

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