Spectrum Business sees 3.8% Q1 revenue boost from enterprise customers

May 1, 2024
Cable MSO’s business services unit is finding a growing cadence with larger business customers.

Spectrum Business continues to find its footing with larger business customers, a trend that continued into the first quarter. 

One potential growth driver is Spectrum Business, which has remained a top Ethernet service provider to businesses. The provider ranked third on Vertical Systems Group’s year-end 2023 U.S. Carrier Ethernet LEADERBOARD.

Joining other top providers, including AT&T and Lumen, Spectrum Business is a group of providers with 4% or more of the U.S. retail Ethernet services market to qualify for a rank on the LEADERBOARD.

Driven by 6.9% year-over-year enterprise PSU growth, Spectrum Business enterprise revenue grew 3.8% year-over-year to $708 million.

“Excluding all wholesale revenue, enterprise revenue grew by 5.9,” said Jessica Fischer, CFO of Charter Communications, during the first quarter earnings call. “Enterprise PSUs grew by 5,000 in the first quarter of 2024 versus 4,000 added in the first quarter of 2023.”

SMB softness

Despite Spectrum Enterprise's gains in the enterprise market, the provider saw varied results in the small to medium business (SMB) segment.

The provider reported it did see gains in internet and mobile, adding 14,000 and 64,000 customers. However, it lost 2,000 SMB wireline voice customers and 40,000 video customers.

SMB revenue declined by 0.3% year-over-year.

Fischer said the SMB revenue decline reflected “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, adding that “these factors were slightly offset by SMB customer growth of 0.2% year-over-year.”

Wholesale remains steady

Spectrum continues to be a player in the wholesale bandwidth market, providing optical and Ethernet circuits to wireless operators for wireless backhaul. It also provides services to other providers who need to extend their services to businesses without facilities.

Today, the Spectrum Partner Program has ample depth and coverage capabilities. The provider serves 41 states, 40 metros, and 271,000+ fiber-lit buildings.

While Charter did not provide a breakdown of wholesale revenues, Fischer said wholesale “is less than 20% of overall enterprise revenues.”

She added, "Traditional wholesale is relatively steady, and the cell tower backhaul is in systemic decline, if you will.”

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