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Charter Communications Inc. (NASDAQ: CHTR) is rolling out a multibillion-dollar initiative to deliver high-speed broadband access to more than 1 million unserved customer locations across 24 states.
What Happened: Charter was awarded a contract through the Federal Communications Commission's the Rural Digital Opportunity Fund (RDOF) Phase I auction.
Charter budgeted approximately $5 billion for the project, which will be offset by $1.2 billion in support won from the RDOF auction.
The initiative is designed to reach mostly rural areas with 1 Gbps high-speed broadband access, with starting speeds of 200 Mbps. Charter said this new connectivity will enhance telemedicine, remote learning and work and other applications that rely on high-bandwidth, low-latency connectivity.
Charter is preparing to hire more than 2,000 employees and contractors to support this project, which will also expand the company's national network mileage coverage by 15%.
Charter will also introduce its Spectrum product line of voice, television and mobile products to the business and residential customers in these markets. The company said its new customers will not be subject to data caps, modem fees or annual contracts.
Why It's Important: "The pandemic has further highlighted the need for broadband availability and adoption and Charter is committed to furthering its efforts as part of the comprehensive solution needed to address these challenges," Tom Rutledge, chairman and CEO of Charter Communications, said in a statement. "As Americans across the country increasingly rely on broadband to work, learn, access health care and stay in touch with family and loved ones, bringing broadband access to more unserved areas should be a priority for all stakeholders."
Rutledge added that he's hopeful that more public-private initiatives could be created for "expanding networks to unserved areas."
The markets being served in this initiative are located within Alabama, California, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Massachusetts, Michigan, Missouri, New Hampshire, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Vermont, Virginia, Washington and Wisconsin. Charter in headquartered in Stamford, Connecticut.
Charter's Financials: Last week, Charter announced its customer base reached a total of 31.1 million residential and small and medium business customers by the end of 2020, with 1.9 million customers added last year.
The company also announced fourth-quarter revenue of $12.6 billion, up by 7.3% year-over-year, which it attributed to a residential revenue growth of 5%, mobile revenue growth of 80.9% and advertising revenue growth of 43.9%.
For calendar year 2020, Charter reported revenue of $48.1 billion, a 5.1% year-over-year increase, and an adjusted EBITDA of $18.5 billion, up 9.9% from the previous year.
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