Charter’s Q4 commercial business sees enterprise gains while SMB slips

Feb. 4, 2024
The cable MSO’s commercial segment took a slight hit from slower voice service sales to SMBs while enterprise rose on higher PSUs.

Charter’s commercial segment fluctuated during the fourth quarter as its Spectrum Enterprise revenues climbed amidst losses in the small to medium-sized business (SMB) segment. 

Enterprise revenue, excluding wholesale, increased by 6.1% year-over-year. Driven by 6.5% primary service unit (PSU) growth, Charter’s Enterprise revenue grew 3.8% year-over-year.

In all, the enterprise gains helped drive up Charter’s overall fourth-quarter commercial revenue. Commercial revenue increased by 0.9% year-over-year to $1.8 billion, driven by enterprise revenue growth of 3.8% year-over-year, partly offset by a SMB revenue decrease of 0.9%.

Alternatively, SMB revenue declined by 0.9% year-over-year. Voice revenue grew 3.8% year-over-year to $393 million, driven by voice rate adjustments, partly offset by a decline in wireline voice customers over the last twelve months.

However, these losses were offset slightly by 0.7% SMB year-over-year customer growth.

“The year-over-year decrease in fourth quarter 2023 SMB revenue was driven by lower monthly SMB revenue per SMB customer primarily due to a higher mix of lower-priced video packages and a lower number of voice lines per SMB customer relationship, partly offset by customer relationship growth,” said Jessica Fischer, CFO of Charter during the fourth-quarter earnings call. 

Enterprise PSU gains

Charter continues to find its footing in the enterprise market, growing its presence as a competitor to established telcos like AT&T and Verizon, which have long enjoyed a dominant relationship with large businesses. Excluding all wholesale revenue, Charter’s enterprise revenue grew by 6.1%.

Enterprise PSUs grew by 5,000 in the fourth quarter of 2023 versus 2,000 added in the fourth quarter of 2022.

Charter ended the quarter with a total of 303,000 total enterprise PSUs.

Also, the cable MSO remains a top contender in the business Ethernet market and one of the leading providers of business fiber, according to Vertical Systems Group.

Although AT&T retained the number one rank on the 2022 U.S. Fiber Lit Buildings LEADERBOARD for the seventh consecutive year, Charter ranked number three on the research group’s annual listing. Charter held a similar spot on VSG’s Mid-2023 U.S. Carrier Ethernet LEADERBOARD.

SMB's wireless bright spot

Charter’s SMB segment saw its struggles with declines in video and voice services. During the quarter, SMB lost 9,000 video lines and 3,000 voice lines.

While Charter’s SMB segment saw declines in internet and video, mobile was a bright spot. The provider said total residential and SMB mobile lines increased by 546,000 in the fourth quarter.

It added 14,000 new SMB mobile lines during the quarter, ending the period with 247,000 mobile customers. As of December 31, 2023, Charter served 7.8 million mobile lines, with 2.5 million mobile lines added in 2023.

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