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Charter Sees Strong Q3 Broadband Growth, Adds Video Subscribers Too; CEO Tom Rutledge Extends Contract Through 2024

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Charter Communications — the big publicly-traded, pure play cable company — Friday posted revenue for the September quarter up 5% at $12 billion driven by growth in residential high-speed broadband, mobile and advertising. Net income jumped to $814 million from $387 million.

Stamford CT-based Charter announced that Rutledge’s contract, set to expire in May of 2021, was extended through 2024.

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Adoption of high-speed internet service has been racing, driven by households needing more bandwidth during the pandemic and overall shifts in the video landscape, said CEO Tom Rutledge on a call with Wall Street analysts. Other companies have also reported sharp Internet growth.

The company added 494,000 residential Internet customers in the 2020 third quarter compared with net adds of 351,000 in the year-earlier period. Bucking industry trends, residential video customers also increased, by 53,000. They fell by 77,000 the year before. Charter had 15.7 million residential video customers at the end of September.

Rutledge said the uptick in video isn’t a reversal of long-term trends but a reflection of how fast Charter is adding broadband customers — some of them taking video as well. “We still think bundles of very expensive video are under pressure and will continue to be and we’ll have continued erosion of that bundle over time. But we are just growing faster than that erosion,” he said.

Only 5% of Charter customers have purely a video package anymore. In other words, any new video signups are coming mostly as add-ons to broadband service.

Over the last 12 months, Charter said total high-speed Internet subs grew by 2.3 million, or 8.8%, to 28.6 million. COVID drove some of the increased demand but Rutledge said he doesn’t think growth will “go backward or away. It’s a permanent shift” with some households turning mobile-only or generally requiring more broadband.

Charter said it’s planning for $218 million of estimated credits to be provided to video customers when it finalizes expected rebates from sports programming networks as a result of fewer games broadcast during COVID-19.

The company added 363,000 mobile lines in the quarter and as of September 30, 2020, Charter served a total of 2.1 million mobile lines. Spectrum MobileTM is available to all new and existing Spectrum Internet customers.