Traditional Providers Losses, 4th Quarter 2023 Edition

[Bruce]

They also added over 500k cellular subs. FWIW

And yet, profits fell

Profits still declined 11%, however, and free cash flow at the company fell 7%.

For the year, total revenue rose 1% to $56.4 billion in annual revenue. Net income, however, fell 10% to $4.6 billion, and free cash flow plummeted 43% to just $3.5 billion.

https://www.nasdaq.com/articles/why-charter-communications-stock-just-crashed-15

I know Wall Street isn't patient, but the backlash against fixed wireless has begun with throttling and price hikes here and forthcoming respectively, so Charter is probably going to see a lot of those lost broadband subs back eventually. It will just be a higher churn rate for a while.

That is what people used to say about cord cutters, they will be back, streaming is not as good, yet those leaving are increasing and the cord nevers still have no interest .

As far as price hikes and data caps, there is plenty of that in the traditional broadband world, my 1 gig service with Charter just went up to $139 ( up $10), while I do not have a data cap, there are plenty that do, Cox ( have to pay $30-50 more? to not have one), Comcast ($10-15 more for xFi Advantage/no data cap), etc.

So as long as broadband goes up every year, then 5G goes up every year, the difference in pricing will stay the same, just like streaming vs Paid Live TV.

And I expect the 5G services to get better, which, if so, will hurt Traditional Broadband Providers even more.

 

[ncted]

And yet, profits fell

Profits still declined 11%, however, and free cash flow at the company fell 7%.

For the year, total revenue rose 1% to $56.4 billion in annual revenue. Net income, however, fell 10% to $4.6 billion, and free cash flow plummeted 43% to just $3.5 billion.

https://www.nasdaq.com/articles/why-charter-communications-stock-just-crashed-15

That is what people used to say about cord cutters, they will be back, streaming is not as good, yet those leaving are increasing and the cord nevers still have no interest .

As far as price hikes and data caps, there is plenty of that in the traditional broadband world, my 1 gig service with Charter just went up to $139 ( up $10), while I do not have a data cap, there are plenty that do, Cox ( have to pay $30-50 more? to not have one), Comcast ($10-15 more for xFi Advantage/no data cap), etc.

So as long as broadband goes up every year, then 5G goes up every year, the difference in pricing will stay the same, just like streaming vs Paid Live TV.

And I expect the 5G services to get better, which, if so, will hurt Traditional Broadband Providers even more.

The reality is there isn't enough spectrum for everyone in a suburban neighborhood to sign up for 5G home internet without serious congestion. There probably isn't enough spectrum for 10% of suburban residences to sign up in total across all three cellular companies without serious congestion at peak times. Never mind a dense urban neighborhood. Also the mid-band spectrum needed to make home internet fast enough is also what all the 5G cell phone users need to make their experience fast enough. T-Mobile already came out last week to tell people they are going to throttle them when there is congestion, and home internet will get the lowest priority. I just don't see the market penetration becoming that high. As a result, the cell companies will have to make big price increases to make the business profitable, probably a lot faster than the fiber and coax providers.

 

[Bruce]

The reality is there isn't enough spectrum for everyone in a suburban neighborhood to sign up for 5G home internet without serious congestion.

Never said everybody, just enough to really hurt, Cable/Satellite has lost almost 50% of their Video Subscribers in 7 years, how many Broadband subscribers lost will hurt Providers.

Now, I totally agree, the 5G Spectrum will not reach or be good enough for everyone, I will never see it unless I move, but 5G will get better as time goes on, not for the vast majority of Households, but a good sized minority of them, maybe 30-40% at the most.

As far as the price difference goes, 5G will go up, Broadband will go up, but I expect to see broadband to go up even faster to make up the $$$ for those who have left, which then will cause more Broadband subs to leave.

Look at what is happening now with video, the difference in $$$ between Streaming and Cable/Satellite is largely the same, because Cable/Satellite is raising the price so much, now twice a year for the top 3 providers.

But to judge 5G’s future on what is going on today is a mistake, long way to go.

 

[ncted]

But to judge 5G’s future on what is going on today is a mistake, long way to go.

Agreed, 5G home internet is a loss-leader for the cell companies. Some estimates I've seen say T-Mobile's net income on it is around -50%. Economies of scale should bring that down as more people sign up, but the are going to have to start charging almost twice as much as current to actually make a decent profit off it. It makes sense for people suffering on old DSL connections or dialup, but who is going to sign up when their price for it is the same as Charter or Comcast for low-priority 30-50Mbps? The capacity of a wire of a fiber is orders of magnitude more than the limited spectrum available to cell companies. If the FCC just gave them everything from 800-5000Mhz, it would be more competitive, but that isn't going to happen any time soon.

 

[Juan]

Agreed, 5G home internet is a loss-leader for the cell companies. Some estimates I've seen say T-Mobile's net income on it is around -50%. Economies of scale should bring that down as more people sign up, but the are going to have to start charging almost twice as much as current to actually make a decent profit off it. It makes sense for people suffering on old DSL connections or dialup, but who is going to sign up when their price for it is the same as Charter or Comcast for low-priority 30-50Mbps? The capacity of a wire of a fiber is orders of magnitude more than the limited spectrum available to cell companies. If the FCC just gave them everything from 800-5000Mhz, it would be more competitive, but that isn't going to happen any time soon.

The money was supposed to be in content...but alas most people don't want to watch TV on a 5 inch screen..the bigger issue is that the signal doesn't pass thru walls very well and has trouble connecting to whole house router...the fix is an out door antenna but for that to work it requires a dispatch and a intall...that costs money and defeats the entire purpose if 5g....so we wait for 6g....but you are correct..the only real option is fiber to the home..and that costs significantly more in maintenance than cellular...so we just sit back and watch

 

[MikeD-C05]

Something has to give here, I'm not sure how many more quarters the traditional providers can sustain of subscriber losses like this.

Here's what I think about that one.

 

[Juan]

Something has to give here, I'm not sure how many more quarters the traditional providers can sustain of subscriber losses like this.

The smart ones transformed from being a cable provider to being a internet provider...they were forced to when satellite ate their lunch

 

[Bruce]

The smart ones transformed from being a cable provider to being a internet provider...they were forced to when satellite ate their lunch

That is a myth, Satellite never had more subs then cable, DirecTV started in 94, I had Broadband (3 down/1 up) , in 1996, back in Michigan.

Satellite did not start to really take off until they had locals, which started in 1999.

 

[Jimbo]

That is a myth, Satellite never had more subs then cable, DirecTV started in 94, I had Broadband (3 down/1 up) , in 1996, back in Michigan.

Satellite did not start to really take off until they had locals, which started in 1999.

You've got 700 Cable companies and 2 Sat companies, I sure Hope Cable had more.

 

[savarese04]

The money was supposed to be in content...but alas most people don't want to watch TV on a 5 inch screen

I'm confused. It's 5G home internet service, what does content or watching tv on a 5 inch screen have to do with anything?

 

[Bobby]

I'm confused. It's 5G home internet service, what does content or watching tv on a 5 inch screen have to do with anything?

Um, 5G internet service can easily hook up to Roku or other streaming devices that hook up to 85” screens. But then we know that. All except Juan who wants to open another rabbit hole.

 

[Juan]

I'm confused. It's 5G home internet service, what does content or watching tv on a 5 inch screen have to do with anything?

Internet service is used to deliver content...the profit is in the content...they deliberately lower the price the internet service so you buy the more profitable content

 

[Bruce]

Internet service is used to deliver content...the profit is in the content...they deliberately lower the price the internet service so you buy the more profitable content

But what does watching on a 5” screen have to do with anything.

And have you seen Comcast/Charter’s prices lately, if there is a bundle discount, it is not much of one.

Specially since you have to add $40 in just Broadcast/RSN fees on top of the overpriced package price, then box, then those little just because you are a Comcast customer fee.

 

[Juan]

Um, 5G internet service can easily hook up to Roku or other streaming devices that hook up to 85” screens. But then we know that. All except Juan who wants to open another rabbit hole.

Knock off the personal atracks..he asked and I explained..it was all relevant information

 

[Juan]

But what does watching on a 5” screen have to do with anything.

And have you seen Comcast/Charter’s prices lately, if there is a bundle discount, it is not much of one.

Specially since you have to add $40 in just Broadcast/RSN fees on top of the overpriced package price, then box, then those little just because you are a Comcast customer fee.

The problem was signal penetration..thats why they switched to c band frequencies...they want to use 4 g frequencies too but still to many users..until they get a decent signal in the house..it will be a 5 inch screen for most

 

[ncted]

The problem was signal penetration..thats why they switched to c band frequencies...they want to use 4 g frequencies too but still to many users..until they get a decent signal in the house..it will be a 5 inch screen for most

And speeds on 850MHz won't be significantly faster than 4G, although they will be able to stuff a few more devices on the same tower, if they have the backhaul to support it.

 

[Juan]

And speeds on 850MHz won't be significantly faster than 4G, although they will be able to stuff a few more devices on the same tower, if they have the backhaul to support it.

You don't understand...they are going to REUSE the frequencies for 4g...its going to be a new faster service...probably called 6g...its not going to 4g speeds..just 5g with better penetration...its going to be several years before that happens...similar to the way they reuse cband for verizon ultrawideband g5...the one that really can be used for home use

 

[ncted]

You don't understand...they are going to REUSE the frequencies for 4g...its going to be a new faster service...probably called 6g...its not going to 4g speeds..just 5g with better penetration...its going to be several years before that happens...similar to the way they reuse cband for verizon ultrawideband g5...the one that really can be used for home use

I understand fine Juan. I think you did not understand my point. 5G isn't hardly any faster than 4G on the same band. Maybe 6G will be faster , although I am skeptical about the real world benefits based on the strategies they are planning to use. The carriers know this which is why they keep buying more and more spectrum to spread the load across.

 

[Juan]

I understand fine Juan. I think you did not understand my point. 5G isn't hardly any faster than 4G on the same band. Maybe 6G will be faster , although I am skeptical about the real world benefits based on the strategies they are planning to use. The carriers know this which is why they keep buying more and more spectrum to spread the load across.

Has nothing to do with the band...its the back end equipment that determines speed...4g has a gige connection to a cell tower...you have different flavors of 5g..verizon wide band 5g is alot faster than the cellular tower version...wide band is fixed 5g and uses nodes that provide service to a neighborhood, office building or college campus.where as regular verizon 5g just has a 10gig to a cell tower and speed depends on how many users are on that particular tower..6g is supposed to be similar to fixed 5g service..but 6g is still being developed and years away

 

[ncted]

Has nothing to do with the band...its the back end equipment that determines speed...4g has a gige connection to a cell tower...you have different flavors of 5g..verizon wide band 5g is alot faster than the cellular tower version...wide band is fixed 5g and uses nodes that provide service to a neighborhood, office building or college campus.where as regular verizon 5g just has a 10gig to a cell tower and speed depends on how many users are on that particular tower..6g is supposed to be similar to fixed 5g service..but 6g is still being developed and years away

So, the band doesn't matter, but wide-band is better. I see.