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

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So we have flexibility to make, for example, you can make a symmetrical speed of product out there, depending on where you set the split. And those options remain available to us. It’s our view right now that the upstream demand today is much more of a marketing campaign as opposed to any real product demand. And we want to lead in those marketing claims, which is why we’re doing what we’re doing. We also have from a marketing claims perspective from a symmetrical that what we’ll be deploying here allows a fiber drop in the — as a remote OLT inside of the node. So that gives us marketing claims across the entire footprint for 25 symmetrical and over time, 50 or 100-gig symmetrical. Hard to imagine what, when and how that would ever be needed, but it gives us the opportunity to do that and market it at least in these communities to have that type of speed, not different from what we do with enterprise already today.

So we have a lot of flexibility. That’s what I think we really like about this plan. We can go fast. We can do it at a low cost. We can reset the up and downstream, and we can pivot where we need to go at a very attractive price. We can do it at a faster pace and a cheaper cost than all of our competitors and be out in front of any potential overbuild with a better product for the long term.

Thomas Rutledge : And Craig, this is Tom. I just want to add one thought to you the margin. The gross margin of the mobile business is actually a high-margin business. And it’s improving with penetration, and it improves both at the gross level and the operating level. And relative to video, which is a low-margin business and declining, but has an impact on — as the revenues decline in video has an impact on margin in a positive way, even more dramatically is the impact of the increased revenues that are coming in from mobile and the high margins associated with them. So the overall margin in the business is improving going forward.

Operator: Our next question will come from Phil Cusick with JPMorgan.

Philip Cusick : I wonder if, Chris — two, if I can. One, Chris, can you just talk about the broadband market? Is penetration in your legacy footprint growing? And talk about the — what you mentioned was incremental fiber competition and how that sort of evolves over time? And then second, Jessica, you gave a ton of detail on costs, and I appreciate it. Can you just quantify a little bit for us that increase in cost of service in the first half as well as the programming cost commentary, a lot of people wondering how are some programming numbers are flat in ’23?

Christopher Winfrey : So Phil, let me parse the market a little bit in the broadband market. Clearly, in areas where we don’t have a gig overlap, we are growing and continue to grow despite a low transaction volume marketplace. And despite some of the rollback to post-pandemic rollback to mobile-only that Jessica described. I don’t think it will go all the way back, but we’re all seeing a little bit of that taking place. So growing in that space. Typically in a gig overlap area, you have newly minted overbuild and you have existing overbuilt and existing overbuild we’re growing and newly minted. You have a small setback upfront because you have just have a new competitor in the marketplace. And to the extent you have a higher amount of that, that mix impacts where you’re going.

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