CHTR - Earnings call transcript Q4 2019 | Charter Communications, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to Charter’s Fourth Quarter 2019 Investor Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. today’s being that advised be call recorded. is Please Instructions]. [Operator

the to Stefan I'd now over turn to like Anninger. conference

Stefan Anninger

found this morning Good and can under accompanies call. Information section. welcome quarter website, be the call Financial fourth XXXX to investor presentation The on ir.charter.com, our Charter's that

we would most our in remind morning. SEC including our like Before XX-K you a filed are contained there proceed, cautionary risk of statements I recent this number factors to that and other filings,

factors and risk cautionary will statements call. those We not this other on review

encourage you we constitute we plans concerning to However, Various read prospects remarks make expectations, them that forward-looking and call carefully. statements. on this predictions,

reflect These or no to and or in differ management's uncertainties only statements forward-looking and results obligation risks the statements update future. anticipated to such subject from actual statements to that historical to may statements results. revise current make Charter are view undertakes forward-looking cause or additional forward-looking Any

used today's as defined referring may of measures, be as be basis titles similar the on call, are by will also reconciled in course materials. non-GAAP companies. a earnings call to other growth comparable specified. rates and the with our not defined measures noted note that this on calculated During These presentation unless we measures Charter, and Please otherwise year-over-year all non-GAAP by to in

Winfrey, and Joining me on today's and Rutledge, our CFO. Chris our call CEO; are Tom Chairman

turn With let's the that, Tom. call to over

Tom Rutledge

Thank you, Stefan.

flow a move. company customer customers’ services and latency, service converged around driving our or truck customers, we by results current the by EBITDA fully per sanitary quality seamless low focused homes transactions finally, unnecessary growth services the intensity; evolve connectivity growth strong Our network by driving products deliver free delivering positioning value capital with growth delivering sustainable rolls and remain and improving continuing operating continues delivers and operations that cash and speed, for to environment while high customer, our long-term our strategy to and new inside relationship growth of reducing reducing superior outside by on to customer

million more full relationships, also advertising by million cash substantially XXXX by created our cable XXXX. XXXX. a our lower X.X% XXXX grew adjusted new with X.X we our over In in over free we EBITDA year. And grew And cable new X.X We Internet year customers, XXX% more over added customer capital than flow than year-over-year. cable combined expenditures, non-political

We expect strong will declining that deployment our and strategy capital continued cable disciplined our drive with growth. flow cash growth capital EBITDA combined intensity, free

connectivity a in in added of lines today over grow. is and core business X over future XXX,XXX of it accelerating with and service in extension have pace. strategic capabilities our XXXX We mobile the mobile million to Our now well an those at continues

per reflected service reduction rolls, billing And were improvements lower In transactions customer calls, those calls. a per in XXXX, in saw substantial call, relationship and truck [repair] we relationships. trouble

rolls We growing also installation self-installation activity. fewer physical performed levels truck giving

our workforces, mentioned, and the as sales. activity operation growing self-service levels of network, self-installation field XX% service online maintenance quarter of activity, reliability activity greater given levels in-sourcing positioned center of forward to Spectrum pricing to increasingly of the call packaging, customers in-source XXXX, service customer, and in higher program and well we're per activity level Looking to reduce completion a and fourth quality, exceeded I our in of experienced continue overall of improving the and which

per overall relationship customer customer in in continue these relationship. in service cost levels improvements and lower churn lower service So to customer activity should XXXX, of satisfaction, reduction

megabits nearly speed with our also to continues or XXX set of minimum half or residential megabits more. now in-home of Internet improve connectivity XXX product XX% Internet minimum customers and receiving Our of speed more receiving

cost everywhere we network capital. for in outperform megabits, our the capable entire gigabit DOCSIS $XXX gigabit footprint. planned months also efficient technology offer using speed demanding our more we more and a tier to across network, that use on have speeds network Through devices operate multi-gigabit We plan, businesses our greater XXG to service pathway to X.X million our more and to and made XX our continue to our continue and attach We a reliability. course product consumers of daily over data ultra of lower and providing basis, responsiveness latency

home to deploy Texas, Antonio, we closes quarter, Dallas, the Southern San including markets During to capabilities also beyond of Wi-Fi continued our Austin, advanced California. and new

control Wi-Fi security, the delivering band managed all while and enhanced homes, devices provides Wi-Fi simultaneously dynamic IP coverage, switching bands. better capability our Wi-Fi channel in-home privacy app-based consumers’ superior experience solutions in to of through advanced within Our and a and customer optimization

far, entire footprint. well our this rollout deployment throughout gone we has and to capability our So plan

Our business over lines quickly, added and to than in quarter in quarter. XXX,XXX we fourth the Spectrum Mobile third grow continues more we added the

at so early, mobile generate still satisfaction scale. it's believe core While product customer our indicate far we profitability and will our that results connectivity, standalone drives

spectrum We technology small cells own CBRS high tools two-way and our by also on test to using capacity continue network. mounted

well. tests continue very go Our to

the And We plan continue to first Mobile our to add features to and offer we in quarter, XG Spectrum functionality product. mobile service.

call the to Chris. over turn I'll Now,

Chris Winfrey

Thanks Tom.

results, quick the that within reminder our we business a services sale the Spectrum in closed cloud Enterprise managed September. covering of Before Navisite

in financials XXXX, forma XXXX. quarter to We of not have results not fourth quarter recorded but Navisite prepared fourth of in pro include

revenue and roughly will For material. an the our On EBITDA CapEx Navisite growth quarters, not in discuss impact on Enterprise million comparability. its next $XXX and excluding and revenue for Navisite including I was basis annual few generated

X. our to on Turning results Slide

residential X% XXX,XXX SMB, X.X% the declined customer XXX,XXX over the And XXX,XXX packaging. higher quarter months. accelerated by and Over XX XX of were At months, by XX% customers by Spectrum pricing our of residential growth quarter, end fourth ARPU our million relationship X.X XXX,XXX the the to million, the Video by X.X% XXX,XXX in we residential or we declined Including quarter. and grew added and relationships mobile by Internet customer by voice quarter the grew in residential customers and we lines. wireline the fourth last and in total year-over-year. last in or X.X SMB over and

customer As highly reducing is our service rate we full we XXXX competitive churn. and our growth better as year products accelerate connects driving with look deliver at goal to

Internet, residential year-over-year, XXX,XXX growth in driven customers in added In Internet total continuing resulting we quarter, customer by improvements. churn of the residential X.X% of a

residential in market our voice, continued we driven mobile in lost sell-in generally. the quarter In residential primarily additions in driven customers by video, XXX,XXX lost customers And the to gross in wireline bundle, video XXX,XXX lower the selling mobile substitution fixed the quarter, by following transition and lower in and it’s year-over-year. we

the the offers, growing product mobile, and our by quarter added sales Turning mobile total product value XXX,XXX we of lines to mobile and increased brand awareness in driven effectiveness.

and XXst, As of By had X.X lines of we the December mix Gig million healthy lines. nearly both a Unlimited with

Spectrum scale per connectivity not traditional to include any loss with does to benefits at less Mobile even an accelerating cable business. line that continues And net our rate. EBITDA addition

Over customers relationship the total promotional year-over-year by grew migration given last a Residential lower year, campaign X.X% SPP by we per of X residential rate over just rate customer and residential X.X%. million adjustments. grew revenue or roll-off and

and mix the video higher by packages partly customers, within video $XX lower ARPU in base mix million higher quarter. year-over-year a Those non-video were revenue streaming lighter of pay-per-view of of a and offset our benefits

the Our timing mobile this especially rate does reflect not year. any cable revenue, QX adjustments but benefited ARPU of from the

resulted year-over-year combined growth revenue X.X%. of shows cable X with in customer ARPU our elevated that Slide residential QX growth The growth

customer Turning grew SMB and the as continues products last well. X.X% the to X.X% relationships as House by faster and SMB revenue TWC commercial, from of SMB by year-over-year. revenue Bright than effects our quarter repricing Legacy grew

and Navisite by sales of revenue backhaul one-time Enterprise as tower X.X% we in declined mentioned year-over-year by of that benefit the fourth quarter driven fees a cell the XXXX.

of the by quarter both revenue of Navisite, of cell grow XXXX. tower nicely challenging. as And X.X%. XXXX, to backhaul Enterprise to the I piece continue backhaul Enterprise Navisite expect in grew Excluding continue fourth fourth including will to the X.X% from tower retail wholesale quarter that cell by and be Enterprise grew excluding portion

Fourth XXXX. to by due declined revenue less XX% quarter in political revenue advertising

products primarily and data. -- efficiently recently more deployed by tailed much advertising sell Our anonymized non-political own year-over-year advertising our capabilities, grew using X.X% highly to long our detailed revenue due inventory, grew viewed that advanced viewing

continue to year advanced of advertising XXXX, healthy and to As driven revenue. the a growth political by full business year our we we expect look that

year-over-year. in revenues both driven with $XXX In declined when mobile processing by fees subscriber partly declines revenue levels years being by that was quarter or lower totaled revenue video consolidated to by related year-over-year XXXX. lower revenue. X.X% Cable videos and up excluding X.X% growth was fourth offset Navisite revenues X.X%, Other CPE advertising $XXX and of customers. home of higher in excluding million Mobile shopping million X.X% to sold revenue total, device

expenses year-over-year, And decline X.X% operating that mentioned. despite and tied operating expenses pay-per-view revenue of lower pay-per-view video Cable lighter up packages essentially fourth excluding In of operating was flat and million Slide grew X.X% $XXX a offset Programming were X.X% X. that's Stream relationship by higher as customer total expenses to such on streaming year-over-year. of or video to growth. expenses when X.X% Moving and by lower I quarter rates due higher million excluding increased revenue Navisite. mix year-over-year, to year-over-year and mobile the Choice $XX the or strong to

growth. driven content costs. X.X% percentage expect to to Looking programming video mid-single-digit the programming original customer at we declined and costs year-over-year, that customers compared Cost connectivity service X% was of and XXXX, grew full relationship sold by CPE to higher X.X% video costs to produced per and customer by in year grow Regulatory, range. customers by

number all rolls So metrics move our per as core mentioned. we're customer, rates Tom a efficiency calls meaningfully customer the continue churn, and per operating, strategy. improvements, lowering costs and our is truck service to through self-install like in quality relationship per which direction Key right to

which be this of productivity we every quarter. customers increased Cable cost expenses ahead, decline year, this year-over-year, to it a and through level lower year. the marketing by expect costs which per down carry and sales of reverses in were service basis exceptional to and driven but political on other single quarter’s was ad X.X% Looking quarter customer lower further X.X% in costs, replicated Navisite, will sale by will relationship the of third a operational related expenses cable

the costs were totaled comprised business. operate of tied Mobile and device device usage stand acquisition to up and million $XXX customer they operating cost mobile revenue, and costs and to expenses

due is mobile similar costs, mobile XXXX mobile looking acquisitions our exceed But will that and of Our further, at all to our costs. current costs. in probably XXXX related it EBITDA and the service to revenue operating growth scale growth regular looks XXXX, expectation excluding

net revenue Turning $XXX the in expense X.X% million. fourth in its the growth from the mobile negative total periods. adjusted grew of roughly loss including we startup including grew Cable quarter, to EBITDA rate by X% impact by when EBITDA advertising quarter EBITDA, both EBITDA associated of in X.X% adjusted a

Slide driven The million net net increase million financial the we to to tax by $XXX the in income last Turning X, Charter versus by partly year-over-year on on higher was fourth offset primarily the year. generated period shareholders in $XXX income year adjusted loss higher in prior EBITDA and expense. instruments income quarter attributable

CapEx and I’ve mentioned is mobile. expenditures footprint retail by trends, lower DOCSIS X.X to in million quarter the in related Turning capital, software spent year-over-year, driven and $X.X mostly costs $XXX about with the integration declining million year. fourth benefits billion it Capital this for in-support was and Slide costs accounted throughout and for $XXX quarter, X. CPE the upgrades driven CapEx in-sourcing by which We totaled development cable same mobile

would In meaningfully on CapEx expect acquisition in potential a behind ROI then be mid-band XXXX, XXXX evaluation. will Spectrum to build mobile we separate expenditures XXXX be excludes that our be decline us. mobile work as outlook any which and to similar based out, And capital

new existing that what to we we’d on capital projects still just I high CapEx to in course expenditures with we cable XXXX expect accelerated dollar mobile basis intensity so. growth, be different of projects if our to year to faster do we drive about the our ROI on XXXX, from continue don't the expenditures, said an our decline spend from the meaningfully In find XXXX. And levels. cable Similar expect to absolute XX% capital during

XX of quarter billion and excluding consolidated our we quarter. The flow, $X.X free versus shows, in Slide billion generated free cash year's cash up fourth investment $X.X $XXX in flow mobile, cable this generated last million we

year. $X.X XXXX, generated million cable cable versus billion year of of free past flow, full the XXXX, up working cash For headwind $X despite capital $XXX a we this billion

quarter, significantly full our expect working the in For cash. XXXX. a cable of improve first negative year which we our add would which elevated use seasonal drive almost pace, typical swings impact at with will neutral cash to We respect XXXX, to needs the in we always is customers still slightly to flow. working continue have including capital working on to capital capital, With continue to a handset related mobile an working mobile capital

our event improved any significantly In profile free year. cash last flow

to free growth flow our positioned couple return to with focused We’re and capital investment cash continue our strategy.

in finished with principal debt. net billion $XX.X debt year We and the billion $XX.X in

mobile and current calculating run than the cable-only at leverage adjusted now be X.XX our annualized times end net X.X Our while XX more as And end our EBITDA interest include investment $X was high the of fourth is times the X.XX the conservative was at to looking the range. in And last of quarter. we fourth leverage, leverage, quarter, our X end at upfront the which months rate cash billion. times debt to of of

shares totaling Holdings Charter $X.X billion During million an average share. the repurchased about $XXX X.X Charter per at and price units quarter, common we of

full since billion, For over a more per billion $X.X And repurchased of we've average XX% price at share. September we equity. XXXX, than Charter's bit of $XXX year equity an or over XXXX, repurchased our the $XX of

assets composed our NOL our cash in to expect tax primarily tax of Federal taxpayer meaningful X, are anticipate don't Advance/Newhouse, some becoming be our with late modest existing receivables cash that we now the XXXX, utilized a on our with and arrangement end we federal of XXXX to as beginning by payings Turning of until the bulk taxes, Slide tax year. NOL

cash our we cash consolidated to estimate plus XX% our include statements. XXXX the by and multiple today. impact to factors Advance/Newhouse are cash interest expenditures, of state our for captured taxes baseline our our for through Federal I tax distributions just capital our approximate a to would XXXX less looking described, in years financial financing improve it's but we're that EBITDA, separately in expense profile cash multiplied to and ways always flows from XX%. the For That and There tax good part expect what

strategy with pleased and of period our believe we're has create capabilities long strong over Charter we time. network our all infrastructure and in a assets in work cash growth which results with sheet strategy, balance and So our flow to characteristics operating concert value the yield.

will with of lot equity of so cash drive combined ancillary and advantaged use flow to levered top We for, have a products with and connectivity core growth and services on tax good value returns. service

Q&A. for ready now we're Operator,

Operator

from ahead John please. Instructions]. [Operator And Hodulik from the of our Go comes first line UBS. question

Your line open. is

John Hodulik

Chris, metrics, of in the I come you gave with on into this a in And into detail especially and out the really down, to margin the guys improvement you good cable points of programming lot XXXX. XXX should of heading some it cost was all trends as of we think cable how together highlight. to think saw margin basis cost But look quarter, the headwind advertising we XXXX? terms serve continuing putting the

Chris Winfrey

fourth quarter Sure. in the you On advertising political you XXXX. as of a being one not headwind, hand, mentioned, had

had timing well our has On pieces increases were earlier QX of exceptional the that years. prior than as XXXX the in inside as fairly it other some taking hand, been of place rate we

relationship So sustainable for that higher I think or inside in would ARPU quarter be growth in either prior a that results to of what XXXX. customer

So you that into need take account. to

and XXXX more think for given saw rate mix that the full we saw like year could what growth that the look lot QX. a what of in we I subscriber with

that a very well relationship per I'd thing is done mention The basis. second and programming customer gross on has

mentioned, per fourth to in like quarter. And exceptional do XXXX. a customer the as it'll then I in serve cost relative programming finally, relationship was think cost to least But I the well years. at growth other still mid-single-digit in

to going big customer cost our declining. serve every quarter encourage relationship to inside to the been an I would down. has But expectation. continue to And It's replicate people a have is one quarter. Our significant actual decline decline, for step just that was single to gross

guidance good but the later I again, a pretty to not am in advertising. to political to working year expect you against for see year, particularly we help model, that, then giving So build ways a

move think managing faster. that's our growth, continues goal, not revenue which relationships that we around all-in, it's better our the What then be will drive goal our can actively and we manage customer it's grow something And inside to we’re to I is to business. going So faster? grow

our it to or EBITDA experience political continues rate been growth and than advertising has And year. to our be our grow a a faster revenue with without goal at rate

to margin trend. about and the think comparison strategically on what’s to I think to happening the not hung-up that's a So in that underlying a with right particular way of rate quarter get year-over-year

Operator

Cusick the with from please. of comes Go line question JPMorgan. Philip next Our ahead

is open. Your line

Philip Cusick

Following a lower How if on ads said Where the go it changed of much incentives? gross And of forward? you how goal being you going you year-over-year. in your on ads rate. gross fewer that Is costs terms duplicated customer labor to completion and everything quickly I video promotions accelerate expect in talked as in-sourcing up growth still else? of about that to we result you program, about the talked terms there, a then are do Chris, you in-source is commentary. And are and churn in that, and the from, can and of follow-up

Chris Winfrey

what the second your program, first ads, gross one one and -- video is So second in-sourcing was lower what is third one? question? or any Sorry, status Phil, double of was

Philip Cusick

it? That was the of gist

Chris Winfrey

the of setup if box Tom traditional add I that. believe that in attractive -- an IP But I as of as connectivity to and well I user important It’s on Alright, up think offer. more wants attribute more we investment video our know else. And any video was of more all anything second. it's an as a marketplace than to platforms. the still function anyway, in our growth piece package lower there don't thought gross ads We it’s

Tom Rutledge

to Well, it drives model, our ads a yes. a The but marketplace. function It's broadband the our of lower gross addition material is small are not economic to think I connectivity what business. nice

Chris Winfrey

then program, is the And essentially in-sourcing in-sourcing the complete. on

onshore. in-house well available well have contract that our XX% to over calls handled were anymore the system. service of and both And labor to PC there. guys for now. some have that's case some field been are labor We XX% in time for need in you in those the little over service about the There's side, for our the way in of And that's costs in-source of very then talk

think of also the trend our of continue The to better are going I time. have And infrastructure. I going for The that as which churn a long The down. self-installation transactions means it's Charter. and a number get us going digital truck Tom is more up. going going tenure talked that amount to longer, do employees do of with get The own calls employees who for rolls path that all higher service which amount transactions quality think with is they career mentioned. reasons period better gets the and is be less intensive and experienced to our labor means going Tom down. about up of of is And the at

Operator

comes line with the Goldman question Sachs. next Brett from Our Feldman of

Brett Feldman

providers There they're including us to issues, on maybe being could direct-to-consumer or the you're there to or still it just give video not through whether Max whether looking this? number that sense, you for your them. thoughts was very considerations hoping have mentioned just said it's how be products you are technical the to it's a partner do factors of through updated Peacock MVPDs. have that strategic Tom, makes coming economics, soon, broadband around you your whether and some new those all distribution, can complementary intending product. video core I as or decide are And whether weighing of some or all a for you is of if think HBO some

Tom Rutledge

our is relationships with there's thoughts an operating many head we direct-to-consumer can under same and products which the model. in also at cases time. marketing in Brett, cable the are our Well, And yes, in model those Alright. hold opportunity both enough programmers the too, bundled old relationship

those I the also relationship, of come, to can direct-to-consumer and but overall we Flex which think enhance. products because be developed product will so into we And help bundled mix, way selling for our user and like package products years selling with are interfaces products of our customer products that designed because the to

content. opportunity their and an to to sell do us. way in mutually have that create that's beneficial both programmers help a We of And

with And so those working we're the through models various companies.

products for customers direct-to-consumer the doing a interface user user We on we've long products our way. services, interface, purchase card have by can placed from other which time like directly product been our already Netflix and

and In opportunities products like many ways TV. to I at the pay customer look are the video at experience There look relationship. these enhance of I part

there. entities there us. fundamentally, ongoing there's all there's video of have going in a the on opportunity we dislocation think So for the discussions out with while business, in of an lot And I

Operator

comes next with Our question Ben from Morgan Swinburne the please. line ahead Go Stanley. of

is open. line Your

Ben Swinburne

or for video both quarter thinking you either in the you a rate business? of wondering than if you change the in your philosophy pricing adjustments to at from past. would was in characterize know any I about or questions us that about the prior your of the in particular? a how if video I more aggressive like don't reflects manage change you've your fourth Two pricing But how change seemed in as in Tom, done it least increase business a you. you're mind not.

some options likely that’s this likely, should and Spectrum in out go as road? think down just prepared remarks and be was becoming mid-band where more coming And any the just that collective acquisition we opportunity, less was how then mentioned on or through Chris if that something guide sort we at I about your of year curious there. about thinking head his build that's

Chris Winfrey

growth, haven’t it's subscriber we component growth, price revenue product our think have the isn’t growth because we our strategy, the the major have changed do. we the bulk we we to our fundamentally, revenue is anything which accelerating of And do Ben, price and that. growth. or subscriber strategy, with we accelerating pricing growth continue to from expect I strategy, how regard And comes drive subscriber of didn't with have to we

So, been how video the fundamental and at but and in video consent video business priced, the like strategy our other is things margins and in passing-through we're we competitive not business environment have the things and fees retransmission the business, the looking different. in

Ben Swinburne

wireless? And

Chris Winfrey

Mid-band CBRS. spectrum? We're an up participate that in interested to mid-band auction. auction spectrum, coming for likely We're there's in

I been that think there’s opportunity for SEC an that's helpful a in way The in positioning spectrum us. has us. an opportunity for

carefully we're auction considering so And our there.

disciplined Ben the and to doing be build return in about the that’s us for you We'll what -- costs, would and to do where ROI as it. you'd expect spectrum required; costs for so, are what’s financial

people then think should mobile attractive ROI we clearly we have, and we around think that disciplined pretty I that the that will the first that what more be attractive So, is more expect lines is.

Operator

Our from with Go please. Craig ahead next question the MoffettNathanson. comes Moffett line of

is line open. Your

Craig Moffett

I Two could. if questions

facilities what based strategy And facilities know line able network? would if to you offload have a scenario think build it business, that to your where where could be about a you full entire continue where How there want if of go how to thinking total able be aerial build? of will much of to offload do to think much ever would sense under own where you any just wireless with infrastructure you you sort might the to your given maybe, eventually own make that you you'd is to you percentage be able just thinking. on today, First -- down I about as traffic

second. just your video And change then to around the just differently back question given strategy? in for you How do about videos a the programming think tone renewals

Tom Rutledge

to on what's question and a to discipline cost about. that's the the look cost situation the does wireless that was that your and build, really pay what's for work MVNO traffic math Chris the So -- a how it's all what's of rate where's talking and

of particular think it, what in there's -- for is a switch would it and we about paying depends what area mobile as zone and the how inside economic that traffic traffic on traffic. you're So, you

with So as goes as marketplace I our -- capacity our immediate and unfolds. And evolves time but and and go up, advantage plan speeds the economics -- those change through don't to the relationship there's market no fundamental we'll of take the time over up, may change carriers.

market as penetrations overall With regard bundled changes the package change, to the the and and we it content price of is obviously, worth to changes been programming, people an issue relative how out is distribution the negotiate to a have the priced you contracts. biggest much in of and the the and value programming continue operator. changes And in relationship lot as of

general distribution And change of so circumstance years. I don't expect of the precipitously the could over next couple

that think act a big but the will still of bundled changing the I we'll value we in product, have appropriately marketplace. relative in and pieces are

Chris Winfrey

we evolve in the Craig, you want asked had a sub where scenario question on the wireless side networking. that if any there is to

seen anything demonstrates that that haven't far so need. we really And

well. very good partner powered microCell have a Verizon. strong to a And going have We very It's very they network.

need we don't to so today economic that partners interim there's partners that we -- the to think And case any need seeing that says for I come. we’re the within years now

Operator

the from of New question with Jonathan Go next please. ahead Street. line Chaplin comes Our

Your open. line is

Jonathan Chaplin

the around clarification. just on of Just cost want following I a question service.

the there’s the a Legacy where seems it on for an down drive shouldn't in churn impute wondering churn assuming improvement we then Charter I'm cost we from same improvement churn said the cost like that service us relative Time bottomed of would is you You cost this whether finally shouldn't cost we something that component of That the if same in Because opportunities service that still that, And update big Legacy and of service. assume there. quarter to Legacy give to service. to kind can saw passed come of related Warner is the what of or of is year year-over-year you Charter improvement down? or was here churn

Tom Rutledge

sorts So cost a you are per has down reasons, But little There to that's the go all there, true. on to trend basis. cost on of gobbled customer continued the Jonathan. serve, to serve

service the and But what of using well people that should the that that fundamental many I the will the network self-serving think part network-as-a-software operations pace on skilled reducing something digitization and is is defined straight doing you that the the is operations and Chris isn't to customer line that high of is transaction of work volume. itself becoming the software definition manifest with quarterly defined. in terms extrapolate. quality And say and overall how trying this we're

a integration made position of the those out capital fundamental taking we puts a and operating costs us of as in business the All to that over that are expenditures result things the of years realize upside. three last

fundamental that he was that's continues relative decline. TWC to declining Legacy trying be to Charter Legacy So churn faster Charter, to than express. to but And Legacy continues both rate elevated a at be the continues notion to

Jonathan Chaplin

should it used a .... to be gap And it now, be

Tom Rutledge

signal Hey, couldn't cell that hear anything question. you've on and so got Jonathan, really bad time this around we

Stefan Anninger

Jonathan. our Operator, question, we'll Thanks take please. next

Operator

of Our Reif next Ehrlich from from question line America. the Jessica of ahead comes Bank please. Go

Your open. line is

Jessica Reif Ehrlich

follow-up. I have a

don’t the know evolution Flex thinking I else including you're make And high So that? accelerate speed can was rate elaborate -- the data services, then you a expect if Tom will talk and that wondering, differentiate is to speed, if customer on Do offer product you would similar Flex service you it also I more to have besides I or it here? mean you it this about mentioned, do was differentiator? a your accelerate but year. Tom just said or was context could of and/or in to are that about who different broadband you growth Comcast direct-to-consumer video just think in you only plans that but And you how of you

Tom Rutledge

accelerating growth, if speed data I growth about high spoke and was accelerating. customer I relationship when Well, talking

I what are by of relationships that. There Flex And products, similar terms IP in answer that's yes, So is the have. variety meant or yes. of we a

We IP devices have selling through one Apple, with Apple.

have subscribed product. product of through got app We are devices an directly We've to that us customers Roku who millions based design.

variety those. cable on a Internet all product video new products the one is TV delivered and Flex our so And through over-the-top delivered being are of IP IP of technology platforms. delivered or

in opportunities various broadband we're pursuing answer And us video the strategy. those our available in that is, so to and are the all including

speed see our connected And throughout privacy well high any house, we've -- the you devices the as our quality differentiation base as service our what high that private getting and how gets which as speeds saw. a network, those enhanced speeds deliver we've we and quality service go. products, of that to in with devices your the advanced house, devices those throughout than allow to to XXX speed your or quality your is property More minimum the the of our Wi-Fi of allow minimum megabits now you're a so they're our the of addition the all house, half taking up. manage enhanced on everywhere slowest manage and to and through secure, broadband In inside customer utilization of you service the

the continue make way And a And so we itself platform. continue IP into to and to broadband legacy invest to platform. in legacy platform continue invest the invest in a in we transforms better video video it we to

Operator

Our line comes Evercore. Vijay of from ahead next question Jayant please. the Go With

is line Your open.

James Ratcliffe

if Vijay. I could. Ratcliffe James it's for Two Hi,

landscape timing M&A. $X sort both opportunities to M&A secondly, looking all And about so a is home-pass make of of like rollout was? the I vertical or done. sense? the is a what give with Tom that for you us any mentioned and acquisitions that X.X slide in are talk XXG business strategy any there any X.X kind you idea if the incremental magnitude sort the for differing Can would mentioned the you not or dependent horizontal in that just on of see assume that of the it's of next First phase the in deployment? Can you that degree

Tom Rutledge

Sure.

to technology And can to today, a upgrade evolution that immediate there the need has we developed everywhere. get your allows put but regard timeframe. to of in ultimately is gig upgraded to deploy allows invest the it's throughout capabilities in to which specifications the compute set a high provided XXG, network. you new delivery with no an marketplace build to XXG XX to cost way, services, X whole to allows we gigabit a do a it that network was And a just very us latency, that in we very industry low project forward. $XXX go million specifications would that That us I month are new efficient symmetrical XX cost mentioned as network. and cost over a So the at incrementally less than capital is lot it brand

capability there's we have you we And incrementally testing. in so gig But a it's associated that -- no immediate with get least at surpassed XX it. capital deployment laboratory a have already our of symmetrical. to variety to And tools

what of that's the is. terms And of in so stake a potential existing our infrastructure just ground in the

opportunity, for say great assets all, scale the United business we and M&A, at of right owned the With about us talk regard of anything with cable -- market think moment. business shareholders the controlled the to have don't I And that combination States. have and there's approach. and But And to first we're nothing about. value always there's in a to lots we but through by mostly of is

Operator

of ahead Deutsche Go next please. Our question line comes Kraft from with Bryan the Bank.

open. Your line is

Bryan Kraft

ask to takes some capital? the down a quite I prior infrastructure on and bit years. about of Can questions wanted couple the you from scalable XXXX talk CapEx. puts in in you It's of a couple

coming to years we Just level category in think you sort relative a spending Is how if about wondering there that normal history. should of will? the

CapEx. secondly on then And

premises network historically in that over maybe growth kind Will we As of you it your SEC homes of commitment way just extend rate Thanks. rate? opportunities the years to home be passed -- The to the the new terms existing for or footprint? do reach normal of currently off-net? are the you passed, been the growth end in expect what it's now the homes a should see of

Tom Rutledge

advantages, infrastructure that a capacity is us a So the the I the on to in But prior those scalable per now. the of with of some per continues getting continuous deployment. plan Internet we with yet, customer. in data by from utilization unit X.X that because the for been scalable usage opportunity the a expanded that are it's which Bryan, the that think once growth per isn't is a what X.X required the that regard while advantages of -- function customer And -- and investment CapEx, so are basis capital required in that right might periods, advantages have

gigabytes And interestingly month, now of per half Internet-only usage. XXX using over our customers data terabytes are

because So of average it space continues think now clearly something that’s to built of of capacity that opportunity. will a put to the to expenditure, towards period in some stay that for customer is that that climb. the to But video [X], And proportion. that's X.X by and DOCSIS, I in is of capital what time, similar of been XXXX, evolution it wireless the relative traditional any

without requirements from passed, to we we our consent build perspective the that regard homes look, decree. Homes a build can everything passed of

and So, more passings the forward there's rate decree built and household nothing which other rate that than going we've the building than actually accelerated we're at would change of consent required, formation. the

Chris Winfrey

for different temporarily to items that And which of declining as is Tom is and more CPE think of about to the Bryan now our video X.X on in the for XXXX Internet-related already if the and the you CapEx, products. which just mix self includes DOCSIS our CPE CapEx, CPE products traditional continued opposed installed, mentioned growing higher tied line But probably installed, depressed in is we're XXXX our benefits. majority

been Tom an As accelerated we've pace on building at mentioned, extension. the line

And to elevated year that'll ROI as continue this have the time few area going invest amount integration last same year, you'll we we that's estate that's to had systems. an that past. see and well, support, or that positive the And be with scalable support in continue in think like [back through then I that the through we out. the in while attached lower continue there's magnitude have that over probably into] that's years, So -- will to whether but on still IT real the a we've the category, to past not fair of integration capital build

scalable whereas higher. of is so, medium I And support be to CapEx the over that's way the pieces think short term. still temporarily may temporarily the will And move different lower,

Bryan Kraft

look for most And XXXX in on-balance, the continued beyond intensity as declines you capital part?

Tom Rutledge

which have I anything changes that We but we're down build trajectory, about investment arch mobile for which remarks, out. to in step its own don't in based ROI expected will significantly in spectrum the talked that see prepared and/or XXXX any on. the And we

Stefan Anninger

take Thanks, Bryan. James our last please. question, we'll

Operator

Doug the last please. our comes Credit with question line Mitchelson Suisse. from and And ahead Go

open. is line Your

Doug Mitchelson

the question think subsidize OTT include need to directly in broadband dig HBO on were against that's services of topics. more the I Tom, wanted that likes AT&T future think specifics certain customers. couple I to for a will you to compete of trying I to ask folks the to in going video in Max to,

or XX more regardless for build you could build just of capacity around of how as megahertz. competitive if I the you XX broadband? or Two, the CBRS to out megahertz, So, amount outlook it's megahertz. is after one, you're lack XX with going need my the the that do super might spectrum, wireless guess of areas, that well physical cost going because build small because on you conversations XX the I high and the or you've with spectrum how CBM sort with the But do out of many same spectrum, think going much been forward interesting if is, network, need having to you're a us question

So of I'm just return you. curious to capital invested on how relative quantity spectrum dynamic? that you think about Thank

Tom Rutledge

And of really perspective on we good broadband price, selling relatively think in subsidization the marketplace. posture have what Well, a just from competitive the OTT, you're that a that's for. I price

just of don't say but effect the them, have pricing lot I It promotional price It's the won’t will see we interact rented the cost a a network marketing strategy. there pieces of each to in a regard do -- never, fundamental you're is the offers of that. so changed But doesn't of two that's it not that the network the cost bills, technique. those And them. of you it's your have physical in things. and what And value us math other. things mean what's with function of changing how with your I cost into wireless, a and is

what exactly haven't is your we do. decided thinking but will say we I'd so correct, And

Doug Mitchelson

up Does there of be If switch updated need spectrum any Tom. could evolution advantage advantage to in MVNO you taking to to need building to new be spectrum? I relationship out -- or of an you for mid that, maximize a to Do Verizon able traffic your follow that MVNO just with on areas? high in advanced take

Tom Rutledge

We have MVNO our happy time. I'm and Verizon. through evolve good with sure relationship will we're And a it relationship with

Stefan Anninger

today. our call And call. Doug. Thanks listened to That who to concludes thanks everyone our

Tom Rutledge

Thank you very much.

Operator

your for And conference conclude today's it you do We thank participation. call. does

disconnect. now may You

Charter Communications (CHTR) 31 Jan 202019 Q4 Earnings call transcript