A Look at Charter Communications’ Spectrum Mobile Strategy

Charter Communications launches its wireless service

On September 4, Charter Communications (CHTR) announced that its Spectrum Mobile wireless service was available for new and existing Spectrum Internet customers across its footprint. The company soft-launched its wireless service in June.

During the Bank of America Merrill Lynch Media, Communications & Entertainment Conference held on September 6, Christopher L. Winfrey, Charter’s CFO, discussed the company’s mobile business strategy. Winfrey believes that the company’s mobile business would ultimately become profitable on a standalone basis. He added that it was expected to help add broadband subscribers and reduce churn.

Winfrey noted, “We’ll be using this not only as a tool to sell mobile into our existing customer base, but we’ll be using mobile to sell into all of our existing new sales that we have every day. And we’ll be using mobile to drive incremental sales to cable.”

A Look at Charter Communications’ Spectrum Mobile Strategy

Charter’s Spectrum Mobile wireless service is based on its MVNO (mobile virtual network operator) agreement with Verizon (VZ). The company offers two packages as part of its wireless service. It offers unlimited mobile data for $45 per month. It also offers the option to pay for data usage at $14 per GB (gigabit) of mobile data.

This move follows in the footsteps of cable operator Comcast (CMCSA), which launched Xfinity Mobile, its wireless service, last year. Charter has formed a wireless alliance with Comcast to boost each company’s competitiveness in the wireless space.

Rise in mobile video traffic

The growing focus on wireless services from media and telecom players has been driven by the rise in mobile video traffic. According to Cisco Systems’ (CSCO) VNI (visual networking index), video accounted for 60.0% of global mobile data traffic at the end of 2016. By the end of 2021, analysts expect this number to reach 78.0%.