Why Charter’s Capital Spending Fell in Q1

Charter’s capital spending in Q1

Charter Communications’ (CHTR) capital expenditure has been increasing as it strives to improve its network. However, in Q1 2019, Charter’s capital expenditure fell 23.7% YoY (year-over-year) to $1.67 billion, and 31.6% sequentially from $2.43 billion.

Why Charter’s Capital Spending Fell in Q1

Sign up for Bagels & Stox, our witty take on the top market and investment news, straight to your inbox! Whether you’re a serious investor or just want to be informed, Bagels & Stox will be your favorite email.

Infrastructure spending falls

Charter’s 23.7% decrease in capital spending was mostly due to lower spending on customer premise equipment and scalable infrastructure. The company’s spending declined as it completed the rollout of its DOCSIS 3.1 technology and all-digital initiative in Q4 2018. The migration of legacy Time Warner and Bright House customers to Spectrum pricing and packaging fell YoY in the quarter, also reducing capex. However, Charter’s support capital spending rose in Q1 2019 due to higher investments in Spectrum Mobile.

Charter expects its capital expenditure, excluding mobile spending, to fall YoY in 2019 to ~$7 billion from $8.9 billion. In comparison, AT&T’s (T) capital expenditure fell YoY in the first quarter, to $5.2 billion from $6.1 billion.