Intellectual Property Law

Charter Does Better in Q1 08, Slows Down Sub. Loss

By Cynthia Brumfield

Paul Allen-backed cable company Charter Communications issued its Q1 08 earnings report this morning and for once the news was, well, if not good, then not terrible either. The struggling operator posted decent financials, with revenues and cash flow rising around 11% year-over-year and high-speed, telephony and digital TV services growing at fairly good (albeit slowing) rates.

The best news for Charter is a slow-down in the loss of its basic customers. From Q4 07 to Q1 08, Charter lost 11,900 basic video customers, not the best of news but better than the 66,400 customer lost during Q4 07. (Download our spreadsheet data for Charter to get a closer look. All the data is adjusted pro forma to take into account the complex system swaps and sales Charter has engaged in over the past few years.)

Still, at the end of the quarter Charter served 5.2 million basic subscribers, representing a penetration rate of only 44%, one of the lowest penetration rates in the industry.

Making up for this decline was strong growth in other subscriptions. Charter gained 102,800 net new digital customers during the quarter, a run-rate sharply up over Q4 07 and Q1 07 levels. By quarter's end, Charter served 4.3 million digital customers representing 58% of basic subs.

High-speed data grew by a net 85,700 customers, down by a third over net gains for Q1 07 but up around 70% over Q4 07 net broadband gains. At the end of the quarter, Charter had 2.7 million high-speed customers, representing about a quarter of the homes capable of buying the service.

Charter gained about 125,700 net telephony customers during the quarter, on par with Q1 07 net voice gains but down from the surge of 155,300 net new telephone customers added during Q4 07. Charter had topped the million-customer mark for telphony by quarter's end.

Total revenues rose 11% year-over-year to $1.6 billion while operating cash flow rose by the same percentage to $545 million.

Full post as published by IP Democracy on May 12, 2008 (boomark / email).