Author Topic: CHTR - Charter Communications  (Read 154052 times)

dwy000

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Re: CHTR - Charter Communications
« Reply #640 on: September 14, 2018, 09:53:17 AM »
Good presentation by Tom today at GS Communacopia. Loved the part where he goes, "fixed wireless is basically a cable overbuild with a more expensive drop". I had to shut my office door to laugh properly at the appropriate volume. Not because I disagree with him (in fact, I do agree) but because he threw so much shade at VZ's new announcement (without mentioning them of course). Aside from how funny it was, I do believe it really is true and important to the long thesis. FWA is not an immediate threat and perhaps not a long-term one either.

He also gave some overlap statistics, namely the amount of overlap with CHTR being about 8% after 10 years, EVEN IF fixed wireless were to prove to be a threat. I'm not sure how he came up with that number, given VZ has not announced all of its 30 mm sub geographies. Perhaps based simply on VZ's fiber coverage.

Would love to hear feedback/opinions from the group.

Disclosure: Long LBRDK

I had the same reaction to his comments.  However, the one part that is worrisome is that Verizon is going to build out 5G almost regardless of cost and IRR on that investment.  They have no choice in order to stay ahead of the other wireless carriers (which is their whole marketing premise to customers).  And on that basis they will start with the denser urban areas where they get the best payback - which is probably in the sweet spot of cable customers.  The Verizon CEO was on CNBC after Rutledge and commented that the rollout of 5G was more cost efficient than people thought and their capex spend this year is actually going to be lower than projected (and lower than last year) despite the initial roll out.

The best part of the Rutledge interview was his comments that the fiber network today can already handle 1Gb (the end goal for 5G) and could be upgraded to 10Gb.  That means that by the time the wireless companies get there with 5G, the cableco's might already be double or triple that speed.


Liberty

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Re: CHTR - Charter Communications
« Reply #641 on: September 14, 2018, 10:02:19 AM »
Good presentation by Tom today at GS Communacopia. Loved the part where he goes, "fixed wireless is basically a cable overbuild with a more expensive drop". I had to shut my office door to laugh properly at the appropriate volume. Not because I disagree with him (in fact, I do agree) but because he threw so much shade at VZ's new announcement (without mentioning them of course). Aside from how funny it was, I do believe it really is true and important to the long thesis. FWA is not an immediate threat and perhaps not a long-term one either.

He also gave some overlap statistics, namely the amount of overlap with CHTR being about 8% after 10 years, EVEN IF fixed wireless were to prove to be a threat. I'm not sure how he came up with that number, given VZ has not announced all of its 30 mm sub geographies. Perhaps based simply on VZ's fiber coverage.

Would love to hear feedback/opinions from the group.

Disclosure: Long LBRDK

Good presentation, I agree. I tweeted some highlights in a thread here if anyone wants to see more:

https://twitter.com/LibertyRPF/status/1040632767871107072
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cameronfen

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Re: CHTR - Charter Communications
« Reply #643 on: September 15, 2018, 07:48:26 AM »

I had the same reaction to his comments.  However, the one part that is worrisome is that Verizon is going to build out 5G almost regardless of cost and IRR on that investment.  They have no choice in order to stay ahead of the other wireless carriers (which is their whole marketing premise to customers).  And on that basis they will start with the denser urban areas where they get the best payback - which is probably in the sweet spot of cable customers.  The Verizon CEO was on CNBC after Rutledge and commented that the rollout of 5G was more cost efficient than people thought and their capex spend this year is actually going to be lower than projected (and lower than last year) despite the initial roll out.

The best part of the Rutledge interview was his comments that the fiber network today can already handle 1Gb (the end goal for 5G) and could be upgraded to 10Gb.  That means that by the time the wireless companies get there with 5G, the cableco's might already be double or triple that speed.

I think 99% of people dont need speeds above 1Gbps or even 100Mbps .  Unless your whole family isn't satisfied with anything but 4k video all at the same time, 100Mbps wont be the bottleneck in terms of latency. 

dwy000

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Re: CHTR - Charter Communications
« Reply #644 on: September 15, 2018, 08:49:53 AM »

I had the same reaction to his comments.  However, the one part that is worrisome is that Verizon is going to build out 5G almost regardless of cost and IRR on that investment.  They have no choice in order to stay ahead of the other wireless carriers (which is their whole marketing premise to customers).  And on that basis they will start with the denser urban areas where they get the best payback - which is probably in the sweet spot of cable customers.  The Verizon CEO was on CNBC after Rutledge and commented that the rollout of 5G was more cost efficient than people thought and their capex spend this year is actually going to be lower than projected (and lower than last year) despite the initial roll out.

The best part of the Rutledge interview was his comments that the fiber network today can already handle 1Gb (the end goal for 5G) and could be upgraded to 10Gb.  That means that by the time the wireless companies get there with 5G, the cableco's might already be double or triple that speed.

I think 99% of people dont need speeds above 1Gbps or even 100Mbps .  Unless your whole family isn't satisfied with anything but 4k video all at the same time, 100Mbps wont be the bottleneck in terms of latency.

That's probably the case today but they are building for the use cases of tomorrow.  I remember when people asked what on earth you would do with 100Mbps of service.  Verizon is also not just building 5G for home use but also for IoT applications which are outside of home (like connected vehicles).

vince

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Re: CHTR - Charter Communications
« Reply #645 on: September 15, 2018, 12:41:01 PM »
Does anyone have any idea how much incremental cost to cable service provider to increase speeds for cable customers.  I don't mean capex.  I mean if they up the speeds from 100 mbps to 500 mbps for a whole city.  There is a capex cost to do that.  But I'm wondering what the cost is after that if someone decides to pay for a higher tier? Does it cost cable money to deliver higher speeds after the residence has the ability?  And the reason I ask is I just realized, after reading Chtr's latest call, that they could raise everyone's speed at no extra charge to the customer as a competitive response that cannot be matched outside of fiber.  I realize that 1 gig is overkill for most people (for now) but I think its natural for the consumer to feel like they are receiving real value for that especially when it is received at low to no cost.  Im sure cable doesnt want to dilute the value of their product but im also sure that its nice to have that capability in ur pocket if you need it.

bizaro86

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Re: CHTR - Charter Communications
« Reply #646 on: September 15, 2018, 12:58:35 PM »
I would guess it's low marginal cost, but don't know for sure. My wife calls retention at our cable company every year for a new deal, and they always bump the speed a level as part of their offer, almost as a throw in.

Spekulatius

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Re: CHTR - Charter Communications
« Reply #647 on: September 15, 2018, 02:49:25 PM »
Does anyone have any idea how much incremental cost to cable service provider to increase speeds for cable customers.  I don't mean capex.  I mean if they up the speeds from 100 mbps to 500 mbps for a whole city.  There is a capex cost to do that.  But I'm wondering what the cost is after that if someone decides to pay for a higher tier? Does it cost cable money to deliver higher speeds after the residence has the ability?  And the reason I ask is I just realized, after reading Chtr's latest call, that they could raise everyone's speed at no extra charge to the customer as a competitive response that cannot be matched outside of fiber.  I realize that 1 gig is overkill for most people (for now) but I think its natural for the consumer to feel like they are receiving real value for that especially when it is received at low to no cost.  Im sure cable doesnt want to dilute the value of their product but im also sure that its nice to have that capability in ur pocket if you need it.

The marginal cost depends most likely on speed thresholds. I know that FIOS can deliver 1GIG in most of their areas and to do that costs them almost nothing compared delivering the basic rate of 100Mbit for example, but I think it would cost quite a bit to go beyond 1GIG, because that requires special hardware.

FWIW, if Verizon really follows though with their 5G pricing and offers $50/ month for 1 GIg speed, they would need to reduce the cost for a lot of their current FIOS customers too, as they charge right now $50 for 100Mbit and $80 for 1GIG (where it is available).
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vince

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Re: CHTR - Charter Communications
« Reply #648 on: September 15, 2018, 02:59:10 PM »
Spek, I dont believe they are giving 1 gig.  They said something like up to 1 gig but average will be closer to 300

cameronfen

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Re: CHTR - Charter Communications
« Reply #649 on: September 15, 2018, 05:56:10 PM »

I had the same reaction to his comments.  However, the one part that is worrisome is that Verizon is going to build out 5G almost regardless of cost and IRR on that investment.  They have no choice in order to stay ahead of the other wireless carriers (which is their whole marketing premise to customers).  And on that basis they will start with the denser urban areas where they get the best payback - which is probably in the sweet spot of cable customers.  The Verizon CEO was on CNBC after Rutledge and commented that the rollout of 5G was more cost efficient than people thought and their capex spend this year is actually going to be lower than projected (and lower than last year) despite the initial roll out.

The best part of the Rutledge interview was his comments that the fiber network today can already handle 1Gb (the end goal for 5G) and could be upgraded to 10Gb.  That means that by the time the wireless companies get there with 5G, the cableco's might already be double or triple that speed.

I think 99% of people dont need speeds above 1Gbps or even 100Mbps .  Unless your whole family isn't satisfied with anything but 4k video all at the same time, 100Mbps wont be the bottleneck in terms of latency.

That's probably the case today but they are building for the use cases of tomorrow.  I remember when people asked what on earth you would do with 100Mbps of service.  Verizon is also not just building 5G for home use but also for IoT applications which are outside of home (like connected vehicles).

As someone who has been in the tech sector, I can tell you that most IoT will use something like 5-10 KB a second (this is sort of pulled out of my ass but the number is really small).  Something like a self-driving car can potentially generate a lot of data, but even then I think its unlikely they will generate 1GBps of data that will have any reason to be transmitted (a lot of the data processed will just be internal).  Will there be other IoT things that need lots of video and video-like data, maybe, but I don't have any idea what it will be.  Maybe virtual reality, but how many people right now even use an oculous or other virtual reality.  So far it's a dud but maybe an Apple comes in and designs something that people want.  Most people don't even need 100Mbps IMO.  Experts say that you can watch 4K even with 15Mbps.  Is it worth paying $10 more per month so you can watch 4K video instead of 480p?  Not in my opinion and probably a lot of people agree.  There will always be some that would appreciate the difference and others that want to get the latest thing even if they cannot notice the difference, but the larger the data you provide, the smaller the customer base that wants it is.  IMO at this point in the product cycle, people would rather spend less money on cable, than have bigger data capacity.  It's only because cable companies have almost local monopolies, that aren't noticing this effect IMO.