Corner of Berkshire & Fairfax Message Board

General Category => Investment Ideas => Topic started by: JoelS on March 26, 2014, 09:39:59 PM

Title: CHTR - Charter Communications
Post by: JoelS on March 26, 2014, 09:39:59 PM
There is a good thread on Liberty Media but I thought it would be worth starting a new thread on Charter Communications (if there isn't one already), as a stand alone company or to help analyse the new Liberty tracking stock LBRDA/B which will hold among other things Liberty Media's 27% interest in Charter. So here's my summary, sourced mostly from the company, VIC, interviews, and Brooklyn Investor.. (i'll post up all the sources i've come across at some point)

Charter Communications is a provider of cable television, broadband internet and telephone services to 6.8 million Americans in 29 US states. The Company is minority owned and controlled by Liberty Media, the flagship company of John Malone. Liberty Media acquired a 27% stake in Charter in March 2013 at a price of $95.50 per share, and has the right to increase its stake to 35% ownership between now and June 2016 and 40% ownership after June 2016.  John Malone, by all accounts, is recognised as one of the best CEO and capital allocators of the 20th century. Over 25 years at the helm of TCI, Malone compounded capital at a rate of over 30% before selling to AT&T, whose cable assets were later bought by Charter and Comcast. Malone has achieved a similar rate of return with Liberty Media, originally a spin off from TCI. From May of 2006 through the financial crisis to March 2013, Liberty returned 33% per year. The upshot is a compounding rate of return near 30% for nearly 40 years.

Cable background

Cable is an attractive industry in general. Cable operators have de facto monopolies in that they control the only data connection into the home with enough capacity to serve video, internet and voice simultaneously. Cable provides the highest speeds and will continue to have the highest speed for the least incremental capital. Because data usage is rising exponentially, having the lowest cost basis will become increasingly important. Cable companies are also attractive in that they hold no inventory, have no labour problems and no long term benefit liabilities. The industry norm is two year contracts with annual price increases.

JM quote on cable industry:

“I used to say in the cable industry that if your interest rate was lower than your growth rate, your present value is infinite. That’s why the cable industry created so many rich guys. It was the combination of tax-sheltered cash-flow growth that was, in effect, growing faster than the interest rate under which you could borrow money. If you do any arithmetic at all, the present value calculation tends toward infinity under that thesis.”

Charter

In 2009, Charter Communications went bankrupt. The company suffered from over leverage and poor management virtually from the time of its IPO in 1999. Charter was bought out of bankruptcy by distressed debt and private equity interests including Apollo and Oaktree. They sold their stakes in the company to Malone's Liberty at a significant profit. Charter emerged from bankruptcy with reduced debt and an enormous net operating loss position (at 31st dec 2013, loss carry forwards were $8.3 billion) meaning Charter won't pay tax until at least 2018. Protected by these NOL's, Charter's earnings will flow through to free cash flow, allowing share repurchases or acquisitions.

Today, Charter is levered 4.8x Ebitda. Historically, cable has been able to support up to 5x ebitda due to the utility-like nature of the business. 95% of Charter's debt is due after 2016, with an average duration of 7.4 years and a weighted average cost of debt of 5.6%.

The stock is priced at an EV/Ebitda multiple of about 9.5x. This is higher than peers but arguably justified because the outlook for charter is much better than peers. Tom Rutledge, Charter's CEO since December 2011, is reputedly one of the best operators in the cable business. Rutledge was formerly COO of Cablevision, The US's eighth largest cable operator. Under his leadership, Cablevision achieved some of the best operating metrics in the cable industry, while overseeing a turnaround comparable to Charter. In 2010 Cablevision acquired Bresnan communications, a company which, although much smaller, has similarities to Charter in that both serve mostly rural markets. Rutledge sought to improve Bresnan's EBITDA per serviceable passing (the standard industry metric for measuring the financial performance of a cable company) through a strategy of driving sales and customer service, boosting internet penetration and offering better video products.
In six quarters, EBITDA per serviceable passing at Bresnan rose from $207 to $270.

Rutledge's strategy for Charter is very similar to Bresnan's and to help turn around Charter, he recruited almost his entire team from Cablevision. Rutledge's employment agreement also includes 1.3 million share awards vesting over four years. Today, Charter's EBITDA per serviceable passing sits around $220. The best cable companies in the US show a figure of about $450 EBITDA per passing. If Charter can increase EBITDA to approximately $280 - $300 per home passed per year, free cash flow should grow at a decent clip. Combined with repurchasing shares and incremental borrowing, Charter should be able to shrink the equity of the company substantially over the next 2-3 years.

John Malone on Charter:

"This is a unique opportunity to take this vehicle and grow it; through both superior marketing and promotion, in other words organic growth… which can be exceptionally strong for a number of years… and particularly the rate of growth of free cash flow can be very, very strong, which allows it to then access the leverage market in order to do roll-up transactions, particularly where there are horizontal synergies. So the old TCI formula, horizontal acquisitions, synergies, grow scale and then look to form consortia with other cable companies".

Title: Re: CHTR - Charter Communications
Post by: prevalou on March 27, 2014, 01:43:41 AM
EBITDA per passing is an interesting statistic.  When comparing to GNCMA (more than $ 600 EBITDA per  passing), there seems to be a lot more of potential improvement at Charter. So price/EBITDA is lower at GNCMA but potential is a lot higher at CHTR.
Title: Re: CHTR - Charter Communications
Post by: yadayada on March 27, 2014, 06:09:35 AM
where is the upside? If they increase to 300, then it still trades at like 12-14x FCF with current revenue? If it increases to 375 then it trades at 6.75x FCF. How can you assess the chance they will succeed at this? Seems like alot of the improvement is already priced in?

Also is attaining GCI's level not a bit unrealistic, and isn't their cost structure different with higher cap exp?
Title: Re: CHTR - Charter Communications
Post by: Olmsted on March 27, 2014, 06:24:19 AM
Oh, the pain!  I bought CHTR warrants post-reorganization for ~6, then sold a couple months later for no explicable reason.  Every time I see a CHTR thread or message, it opens up the wound again.  Quick - bury this thread!  ;)
Title: Re: CHTR - Charter Communications
Post by: prevalou on March 27, 2014, 06:42:53 AM
if EBITDA per passing is $300, price to ebitda becomes 9.5*220/300=7. If it increases to $375, price to ebitda is 5.57. If it increases to $690 (GNCMA level), it becomes 3 times ebitda.
Title: Re: CHTR - Charter Communications
Post by: JoelS on March 27, 2014, 03:31:26 PM
where is the upside? If they increase to 300, then it still trades at like 12-14x FCF with current revenue? If it increases to 375 then it trades at 6.75x FCF. How can you assess the chance they will succeed at this? Seems like alot of the improvement is already priced in?

Also is attaining GCI's level not a bit unrealistic, and isn't their cost structure different with higher cap exp?

Attaining GCI's passing figure seems out of reach, at least for the next few years. Getting to $300, on the other hand, doesn't seem so unrealistic. Most of the upside in EBITDA would come from increasing internet penetration in its footprint.. In 2013, Charter provided internet to just over 32% of customers v competitors Time Warner, Comcast and Cablevision all over 36%. (50%+ for Cablevision).

If they can get to $300 per passing at year end 2015, it depends on your assumptions of course, but from 1. 2014 free cash flow, 2. 2015 free cash flow and 3. incremental borrowing to keep leverage at 4.5x ebitda, you end up with c $5bn of cash for Mr Malone and Mr Maffei to use for whatever purpose they deem appropriate.

The current market cap is c $13.1bn. So the free cash looks good in comparison.


Title: Re: CHTR - Charter Communications
Post by: yadayada on March 27, 2014, 05:11:18 PM
What would cap exp be compared to depreciation?

Because here is what I get. 300$ per passing is 36% higher right? So 36% more ebitda. they had 2.8b$ ebitda in 2013. So x  = 3.8bn$ in ebitda now. - 1.8bn$ in depreciation (how much cap exp is that in reality?, and will this be  higher or lower?) - 850 in interest is 1.15 bn$ in FCF, not counting in taxes. with a market cap of 13 bn$ that doesnt look v cheap?

Also if you think they can get more debt, then you are saying i should buy liberty media? Is that FCF for liberty media? I dont get that part.

Did I do the FCF calculation right?
Title: Re: CHTR - Charter Communications
Post by: JoelS on March 27, 2014, 05:41:55 PM
What would cap exp be compared to depreciation?

Because here is what I get. 300$ per passing is 36% higher right? So 36% more ebitda. they had 2.8b$ ebitda in 2013. So x  = 3.8bn$ in ebitda now. - 1.8bn$ in depreciation (how much cap exp is that in reality?, and will this be  higher or lower?) - 850 in interest is 1.15 bn$ in FCF, not counting in taxes. with a market cap of 13 bn$ that doesnt look v cheap?

Also if you think they can get more debt, then you are saying i should buy liberty media? Is that FCF for liberty media? I dont get that part.

Did I do the FCF calculation right?

We're in about the same ballpark. So using your figure of 3.8bn, and keeping leverage at 4.5 v 4.8 today (for charter, not liberty) you add about 3.1bn to debt. Maintenance capex should come down as a percentage of revenues in 2015, when the c400m attributed to the digital rollout ends. So you get capital coming down per customer. I think the cash flow yield might be closer to 10% in 2015 - more like 1.3 - 1.4bn.. But that's subjective.
Title: Re: CHTR - Charter Communications
Post by: Liberty on March 28, 2014, 10:38:16 AM
Quote
Charter Communications has filed legal documents contesting the proposed $42.5bn merger between Time Warner Cable and Comcast, claiming that the deal has been subject to a “flawed process”.

In a filing with the Securities and Exchange Commission on Thursday night, Charter, a cable operator, outlined a series of complaints against the structuring of the deal, with a particular focus on proposed divestitures and the lack of a break-up fee.

“TWC’s process for negotiating and approving the merger was flawed because of the failure of the TWC board of directors to consider and investigate alternatives to the proposed Comcast merger,” the document reads.

“In particular, the TWC board simply refused to meaningfully engage with Charter regarding a potential business combination even after deciding to pursue a transaction with Comcast

http://www.ft.com/intl/cms/s/0/4279ccc4-b671-11e3-b230-00144feabdc0.html#axzz2xHQ55UlE
Title: Re: CHTR - Charter Communications
Post by: tombgrt on April 12, 2014, 11:19:55 AM
Haven't look at this yet but just thinking out loud here:

If you assume that "internal/organic growth can be exceptionally strong for a number of years" is possible in combination with increased EBITDA per passing to $300 by the end of 2015/2016 you would get much much higher EBITDA in only a few years. If internal growth is 10%/year* you'd get near $5B EBITDA in 2016! Sure, that would be a very bullish outcome but also one where you could see a double from the current market cap, if not more.

(*likely way too aggressive ;))
Title: Re: CHTR - Charter Communications
Post by: wellmont on April 12, 2014, 11:40:48 AM
very bad blood now between malone and roberts. I don't suspect charter now has the inside track on divestitures. so I guess the strategy is to go "all in".
Title: Re: CHTR - Charter Communications
Post by: tombgrt on April 12, 2014, 02:12:27 PM
What do you mean with 'going all in' wellmont? TIA
Title: Re: CHTR - Charter Communications
Post by: fareastwarriors on April 22, 2014, 04:06:09 PM
Charter Said to Near Deal for Divested Comcast Subscribers


http://www.bloomberg.com/news/2014-04-22/charter-said-to-near-deal-with-comcast-for-1-5-million-customers.html
Title: Re: CHTR - Charter Communications
Post by: fareastwarriors on April 28, 2014, 09:41:56 AM
Charter Reaches Deal With Comcast for Subscribers



http://dealbook.nytimes.com/2014/04/27/charter-said-to-finalize-deal-with-comcast-for-subscribers/?ref=business (http://dealbook.nytimes.com/2014/04/27/charter-said-to-finalize-deal-with-comcast-for-subscribers/?ref=business)
Title: Re: CHTR - Charter Communications
Post by: wellmont on April 28, 2014, 10:04:04 AM
What do you mean with 'going all in' wellmont? TIA

Apparently the "bad blood" was just for show. It appears that Malone was using the threat of making himself into a real nuisance and object to the Comcast/TWC deal, in the hopes that he could get something for charter. So he was "all in" in acting like a total jerk. He also knew that comcast wanted to swap subscribers with charter in LA. So being a jerk got comcast to the table.

And it looks like it worked. Malone knew he had lost TWC. But he got almost as good a deal with this 3 stage agreement. The original plan was for chtr to buy twc and split some of it with comcast. The only change is that comcast is buying twc and will split some with charter. The end result is comcast gets more subs and charter less than the original proposal. But this deal will work for both companies. If charter also bags COX and or CVC down the road, there will essentially be a duopoly in cable. And that could bode well for DTV/DISH.
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 28, 2014, 07:39:21 PM
http://www.sec.gov/Archives/edgar/data/1091667/000109166714000090/exhibit992publicpresenta.htm

Charter and Comcast's presentation on the deal.
Title: Re: CHTR - Charter Communications
Post by: JoelS on August 14, 2014, 03:12:20 PM
http://www.cnbc.com/id/101920898?utm_source=twitterfeed&utm_medium=twitter

Warren Buffett's Berkshire Hathaway added Charter Communications to its stock holdings during the second quarter.

The stake is worth about $361 million, indicating the decision to buy was almost certainly made by one of Berkshire's portfolio managers, not by Buffett himself.
Title: Re: CHTR - Charter Communications
Post by: Gopinath on August 14, 2014, 04:27:40 PM
Such a complicated valuation on the deal! Anyone care to venture a guess what will be the market cap of the new charter? There could be opportunities in all these spinoffs and new company formation! I would like to see what's the valuation on single customer?

Ex:  New Charter will have 5.7M in legacy & 1/3(2.5M) in the spinco?? On a ownership basis, new charter will have 6.5M customers??

Proforma debt - $21.8 B
Current market cap - $16B??
EV - $38B

Each customer is valued @ $38B/6.5M(both legacy and spinco ownership) --> $5846???

Can someone verify the math above?? Something is wrong i guess!

Title: Re: CHTR - Charter Communications
Post by: dwy000 on August 14, 2014, 04:46:13 PM
The value for Charter should be even more than that (whatever number you use per subscriber) because they are getting a revenue share fee for managing the new entity.  That's huge - it's a fee on the entire business so they are in effect paying themselves for their 1/3'd share but getting fees on the other 2/3's.  That revenue/fee should drop pretty squarely to the bottom line.
Title: Re: CHTR - Charter Communications
Post by: pks99 on August 19, 2014, 01:23:25 PM
This is my first post on CoB.  Charter is intriguing, and I've just started trying to understand it to get a better handle on what LMCA pre-spin is worth.  Here is my stab at valuing Charter pro-forma for the Comcast transaction.  Welcome your thoughts / improvements:

2014 Charter Enterprise Value
+ 5.4m video subscribers = $5.7b revenue (+1.4m acquired)
+ 5.1m internet subscribers = $2.5b revenue
+ 2.5m voice subscribers = $0.7b revenue
+ 0.6m commercial subscribers = $0.9b revenue
+ 2.5m SpinCo video managed subscribers = $0.1b revenue (4.25% on revenue of SpinCo subscribers)
+ Other revenue = $0.5b
= $10.5b total revenue

x 36.0% Adj. EBITDA margin (historical 35%-37%)
= $3.8b Adj. EBITDA

x 9.5 EBITDA multiple (accounts for growth)
= $36.1b enterprise value

+ 33% stake in SpinCo = $2.1b equity value
- $21.8b debt (5.7x leverage)
= $16.4b equity value

/ 0.1b diluted shares
= $153 per share

Charter is currently trading around this value, suggesting upside of improved ARPU, margins and future capital allocation actions by Malone or Rutledge is not fully priced into the current price.  Charter could potentially be worth 25% more is one assumes improved ARPU and margins as a result of economies of scale. 

What do you think?
Title: Re: CHTR - Charter Communications
Post by: dwy000 on August 20, 2014, 07:37:26 AM
Hey there, welcome to the Board!

I think your analysis is pretty correct.  The only things I'd question are: a) the managed subs should have much, much higher margins since that is just a management fee and wouldn't have any of the associated costs of revenue;  b) for the SpinCo ownership, you show $2.1bn of enterprice value and $21bnof debt - not sure that math works but the $16bn remaining value is probably right.

I can't recall but I thought they were also purchasing some 2M subs from Comcast to get them to a total managed base of about 9-9.5M subs.
Title: Re: CHTR - Charter Communications
Post by: pks99 on August 20, 2014, 04:56:41 PM
Yes, thanks for taking a look at these estimates.  I agree that most of the revenue from the managed subs would drop to profit, especially since some costs will be reimbursed by the SpinCo.  Also, the way I presented the SpinCo equity value and CHTR debt is confusing.  They are not related, just grouped together to get to CHTR equity value.

I like the CHTR story.  Must believe that the economics of the business will improve to resemble leaders like CVC and Malone and Rutlege will make shareholder friendly capital allocation decisions.  Resembles the FIATY thesis (but probably with fewer upside options...).

Look forward to the dialogue on the board!
Title: Re: CHTR - Charter Communications
Post by: Liberty on September 18, 2014, 06:21:17 AM
http://www.sec.gov/Archives/edgar/data/1091667/000109166714000176/chtr91114425filing.htm

Transcript from the goldman sachs conference.
Title: Re: CHTR - Charter Communications
Post by: merkhet on September 18, 2014, 07:21:11 AM
http://www.sec.gov/Archives/edgar/data/1091667/000109166714000176/chtr91114425filing.htm

Transcript from the goldman sachs conference.

Thanks for the transcript.

I must be a little slow, because it took this transcript to help me figure out why the GreatLand deal was such a good deal for Charter. They get to offload some of their costs (R&D, marketing, etc.) onto GreatLand, and this helps Charter by increasing Charter's margins while at the same time they benefit off the revenue share on GreatLand. It's pure margin for them.
Title: Re: CHTR - Charter Communications
Post by: Wilson-TPC on September 18, 2014, 09:21:33 PM
http://www.sec.gov/Archives/edgar/data/1091667/000109166714000176/chtr91114425filing.htm

Transcript from the goldman sachs conference.

Thanks for the transcript.

I must be a little slow, because it took this transcript to help me figure out why the GreatLand deal was such a good deal for Charter. They get to offload some of their costs (R&D, marketing, etc.) onto GreatLand, and this helps Charter by increasing Charter's margins while at the same time they benefit off the revenue share on GreatLand. It's pure margin for them.

It's more than just margin expansion. The customer trade with Time Warner is very beneficial. And not to mention the possibility of acquiring GreatLand when the opportunity arises.
Title: Re: CHTR - Charter Communications
Post by: merkhet on September 18, 2014, 09:28:32 PM
Yes. I understood the reasoning behind the customer trade, but I didn't quite see why they touted the other part -- the management agreement -- as being that great a deal.

At the end of the day, they have various fixed costs that they were going to incur anyway, and now they get to offload some of that onto GreatLand.

I'm still a little unclear on whether acquiring GreatLand would be more beneficial to them than their current arrangement. I suppose it all depends on price.
Title: Re: CHTR - Charter Communications
Post by: Wilson-TPC on September 18, 2014, 09:38:00 PM
Yes. I understood the reasoning behind the customer trade, but I didn't quite see why they touted the other part -- the management agreement -- as being that great a deal.

At the end of the day, they have various fixed costs that they were going to incur anyway, and now they get to offload some of that onto GreatLand.

I'm still a little unclear on whether acquiring GreatLand would be more beneficial to them than their current arrangement. I suppose it all depends on price.

The management agreement gives them "pure" profit, which is why they are touting it.

The pro-forma EBITDA is roughly 7 something with synergies and the management fee.
Title: Re: CHTR - Charter Communications
Post by: merkhet on October 15, 2014, 03:04:18 PM
HBO Sets Stand-Alone Streaming Service http://online.wsj.com/articles/hbo-to-launch-standalone-streaming-service-1413385733
Title: Re: CHTR - Charter Communications
Post by: dwy000 on October 15, 2014, 03:34:44 PM
I don't get that move.

At the end of the day HBO is just an aggregator of movie content plus some proprietary shows.  If Charter (or Comcast or Verizon or TW, etc) increased their broadband price by $5/month and offered unlimited movies (a la Netflix) it would kill the Netflix and HBO and Showtime and Starz business model in one fell swoop.  They would turn into channels that only show proprietary content - and while I love the HBO shows I'm not sure how many would pay $10-12/month for just those (or $9/month for the proprietary Netflix shows, etc.

As HBO, why would you antagonize and make an enemy of the very partners that you rely on for survival - whether that's through a cable distribution relationship or as the provider of broadband that's needed to access your new business model.
Title: Re: CHTR - Charter Communications
Post by: morningstar on October 15, 2014, 04:06:42 PM
I don't get that move.

At the end of the day HBO is just an aggregator of movie content plus some proprietary shows.  If Charter (or Comcast or Verizon or TW, etc) increased their broadband price by $5/month and offered unlimited movies (a la Netflix) it would kill the Netflix and HBO and Showtime and Starz business model in one fell swoop.  They would turn into channels that only show proprietary content - and while I love the HBO shows I'm not sure how many would pay $10-12/month for just those (or $9/month for the proprietary Netflix shows, etc.

As HBO, why would you antagonize and make an enemy of the very partners that you rely on for survival - whether that's through a cable distribution relationship or as the provider of broadband that's needed to access your new business model.

I don't think HBO relies on a Charter for its survival, particularly... the pay-TV services have been very resilient precisely because (1) subs really want their content (even to the point of paying for it ala carte) and (2) they provide revenue to the MVPDs via revenue sharing (they are not cost centers, unlike traditional cable). It's a mutually beneficial relationship. I'd expect that the new streaming service will ultimately be priced such that if you are subscribing to cable, it's still cheaper/higher quality to get HBO via cable than as a stand-alone package; it will also probably force cable to take a smaller cut as revenue share.

Bigger picture, the breakdown of the existing model, and proliferation of over the top/streaming services, seems more dangerous for Charter and other big cable companies than for the companies controlling the content. The main advantage of scaling up in cable may be lower content costs, not lower installation costs, e.g. I think Google's experiences in Fiber largely point to this. Charter definitely does not want to position itself as just a generic provider of bandwidth.

As it stands the cable channels create a lot of value by aggregating content, thereby (1) forcing subs to end up paying more than they really want to or would in an alacarte world - creating new revenue - and (2) generating market power for themselves by being indispensible to the content creators/controllers who can't afford, for instance, not to be distributed on Comcast.
Title: Re: CHTR - Charter Communications
Post by: dwy000 on October 15, 2014, 04:26:37 PM
Can't argue with that.  I think the cable companies have 2 advantages.  a) they provide the broadband which is a massive margin business (much higher than cable because the costs are almost zero) and frankly a duopoly with the telcos;  b) they can aggregate content. 

I'd love to pick and choose my channels and only pay for the ones I watch but I don't want to pay 25 different providers a monthly fee like I pay Netflix today.  If someone packaged up the channels I wanted and it cost an extra $10/month for that service, I'm paying that all day long.  The cable/telcos are best positioned to do that since they already do it for cable and they are providing the broadband that allows the OTT services to reach me (so I'm paying them anyways).

At the end of the day the cablecos (and telcos) hold all the cards because they are the provider of the pipe through which all the content is delivered.  If they doubled the price tomorrow everyone would still pay it because they have no choice (forget that regulators would get involved). 

For HBO, right now they are unique in that they are one of the few a la carte channels out there.  And it's great for both HBO and cableco (with revenue share).  The move to offer OTT is great for HBO because it expands distribution but it can only be negative for cableco.  And given HBO is delivered by cableco (either through cable or broadband), why antagonize that relationship?  I get the short term drive for revenues but the long term impact is questionable.
Title: Re: CHTR - Charter Communications
Post by: ItsAValueTrap on October 15, 2014, 04:40:55 PM
Can't argue with that.  I think the cable companies have 2 advantages.  a) they provide the broadband which is a massive margin business (much higher than cable because the costs are almost zero) and frankly a duopoly with the telcos;  b) they can aggregate content. 

I'd love to pick and choose my channels and only pay for the ones I watch but I don't want to pay 25 different providers a monthly fee like I pay Netflix today.  If someone packaged up the channels I wanted and it cost an extra $10/month for that service, I'm paying that all day long.  The cable/telcos are best positioned to do that since they already do it for cable and they are providing the broadband that allows the OTT services to reach me (so I'm paying them anyways).

At the end of the day the cablecos (and telcos) hold all the cards because they are the provider of the pipe through which all the content is delivered.  If they doubled the price tomorrow everyone would still pay it because they have no choice (forget that regulators would get involved). 

For HBO, right now they are unique in that they are one of the few a la carte channels out there.  And it's great for both HBO and cableco (with revenue share).  The move to offer OTT is great for HBO because it expands distribution but it can only be negative for cableco.  And given HBO is delivered by cableco (either through cable or broadband), why antagonize that relationship?  I get the short term drive for revenues but the long term impact is questionable.

The Internet service provider / cable company might get some of that money back via interconnect fees.
Title: Re: CHTR - Charter Communications
Post by: Wilson-TPC on October 27, 2014, 08:03:46 PM
Just modeled out Charter for the next 5 years. I would love to hear some feedbacks. I'm not certain of the EBITDA margins will expand or not, anyone have any insights into this?

Thanks a ton.
Title: Re: CHTR - Charter Communications
Post by: dwy000 on October 27, 2014, 08:48:27 PM
Just modeled out Charter for the next 5 years. I would love to hear some feedbacks. I'm not certain of the EBITDA margins will expand or not, anyone have any insights into this?

Thanks a ton.

Nice job Wilson.  What's the basis for the subscriber growth?  Seems very, very aggressive given the flat numbers for the industry as a whole.  Also, did you back solve for the operating expenses to get to a flat 36% EBITDA margin?
Title: Re: CHTR - Charter Communications
Post by: Wilson-TPC on October 27, 2014, 11:38:10 PM
Yes I did.

The sub number is based off what people think Tom can do to get the EBITDA pass through to Cable Vision level.

I'm just making a ballsy call on the sub numbers. It's currently not priced into any sell side reports, which is another reason why I would love to hear feedbacks.
Title: Re: CHTR - Charter Communications
Post by: JoelS on October 28, 2014, 12:36:56 AM
If the deal with Comcast goes through, I believe that will get you to 4500bn ebitda in 2015.
- that doesn't include any improvement in underlying performance - i think that was the number given for 2014 assuming the transaction proceeds.

the analyst reports I have read don't know how to discount the deal into CHTR price. If it goes through I assume they will boost their price targets accordingly. If it doesn't, then TWC opens up for another bite. So I don't know how you model this on any steady state basis.

Title: Re: CHTR - Charter Communications
Post by: dwy000 on October 28, 2014, 06:45:47 AM
Yes I did.

The sub number is based off what people think Tom can do to get the EBITDA pass through to Cable Vision level.

I'm just making a ballsy call on the sub numbers. It's currently not priced into any sell side reports, which is another reason why I would love to hear feedbacks.

Thanks Wilson.  I'd caution against comparing margins (EBITDA or FCF) to Cablevision.  CVc is a unique beast in the industry because they are so heavily concentrated on the NYC market. It is very, very dense which makes operating much more efficient (everything from head ends to customer visits are easier - especially due to having so many Apartment buildings) and there is only limited competition from DirecTV and Dish.  CVC margins have been the holy grail for everyone but nobody has come close.

Also, is there a basis for the 10x EBITDA multiple?  That's probably right for the pass thru EBITDA but the Spinco and Charter and Comcast are valuing transfers at 7.5x EBITDA.
Title: Re: CHTR - Charter Communications
Post by: merkhet on October 28, 2014, 08:21:27 AM
If the deal with Comcast goes through, I believe that will get you to 4500bn ebitda in 2015.
- that doesn't include any improvement in underlying performance - i think that was the number given for 2014 assuming the transaction proceeds.

the analyst reports I have read don't know how to discount the deal into CHTR price. If it goes through I assume they will boost their price targets accordingly. If it doesn't, then TWC opens up for another bite. So I don't know how you model this on any steady state basis.

Just a quick note that I think you meant 4500mn in EBITDA. Though if they did $4.5 trillion in EBITDA, this will be a home run! :P
Title: Re: CHTR - Charter Communications
Post by: ItsAValueTrap on October 28, 2014, 08:50:44 AM
Thanks Wilson.  I'd caution against comparing margins (EBITDA or FCF) to Cablevision.  CVc is a unique beast in the industry because they are so heavily concentrated on the NYC market. It is very, very dense which makes operating much more efficient (everything from head ends to customer visits are easier - especially due to having so many Apartment buildings) and there is only limited competition from DirecTV and Dish.  CVC margins have been the holy grail for everyone but nobody has come close.

I think I'd rather own rural assets with little competition from AT&T U-verse and Verizon and other high-speed DSL providers.  Monopoly economics on high-speed Internet are better than duopoly economics.

Charter should have fewer visits due to digital set-top box upgrades and encryption.  If somebody cancels their cable, the cableco doesn't have to send a tech to the grey box in their neighborhood to disconnect analog cable service by disconnecting the cable.  They can do this remotely.
Title: Re: CHTR - Charter Communications
Post by: merkhet on October 28, 2014, 11:25:24 AM
I actually think that they can get significantly higher than $4.5B EBITDA through the deal.

Let's think about it this way. They're currently at around $3 billion in EBITDA, right? And they're about to purchase about $1 billion of EBITDA for $7 billion or thereabouts, and they're picking up another $2.1 billion of equity value + about $200 million of revenue share in GreatLand for 16 million more shares of New Charter Co.

Now, that already gets you to $4.2 billion of EBITDA before you get to the fact that Charter gets to lay off costs relating to Costs to Service Customers, Marketing and Other, which amounts to almost $3 billion in current costs over a user base that is now about double what it used to be -- including the Customer Swap and the GreatLand servicing agreement.

I think that it won't take much to see Charter squeeze around $5 billion of EBITDA out of the deal with Comcast and GreatLand. If you figure out a free cash flow based on maintenance cap-ex and figure they refinance their debt down to a reasonable interest rate, then you're looking at a pretty steep discount to intrinsic value here. (And don't forget to add back in that they have $2.1 billion of equity value in GreatLand, which, depending on various assumptions, might itself be undervalued significantly.)
Title: Re: CHTR - Charter Communications
Post by: merkhet on October 28, 2014, 11:35:10 AM
Moreover, if you think about the 5x EBITDA target and I'm right that EBITDA is closer to $5 billion than $4.4 billion, then they would have another $3 billion of share repurchase capacity in addition to their yearly FCF.

I could foresee a scenario where, a year from closing the deal, they've bought back the 16 million shares they've issued for this deal and then some. Add in the possible layering of buybacks from Liberty Broadband, and it makes the heart quicken.
Title: Re: CHTR - Charter Communications
Post by: yadayada on October 28, 2014, 01:53:50 PM
What is your best guess on maintenance capex. 1.5 billion$? 700m$ interest? that is 5-2.2 = 2.8bn$. But I assume some taxes? another 800m$ in taxes, so about 2bn$ in FCF. then a 12x multiple on 92m shares is 260$ of value. Possibly 280-290$ with that greatland stake?

what is an appropriate cash flow multiple on these things. Since they do have a nice moat, and possibly some growth? So if you say a 15x multiple, then it gets interesting.
Title: Re: CHTR - Charter Communications
Post by: merkhet on October 28, 2014, 01:57:52 PM
Your interest is too low. They're going to have $22 billion of debt post-Comcast deal.

My guess is that $2 billion in FCF probably isn't out of the realm of possibility.
Title: Re: CHTR - Charter Communications
Post by: Wilson-TPC on October 28, 2014, 07:12:31 PM
I actually think that they can get significantly higher than $4.5B EBITDA through the deal.

Let's think about it this way. They're currently at around $3 billion in EBITDA, right? And they're about to purchase about $1 billion of EBITDA for $7 billion or thereabouts, and they're picking up another $2.1 billion of equity value + about $200 million of revenue share in GreatLand for 16 million more shares of New Charter Co.

Now, that already gets you to $4.2 billion of EBITDA before you get to the fact that Charter gets to lay off costs relating to Costs to Service Customers, Marketing and Other, which amounts to almost $3 billion in current costs over a user base that is now about double what it used to be -- including the Customer Swap and the GreatLand servicing agreement.

I think that it won't take much to see Charter squeeze around $5 billion of EBITDA out of the deal with Comcast and GreatLand. If you figure out a free cash flow based on maintenance cap-ex and figure they refinance their debt down to a reasonable interest rate, then you're looking at a pretty steep discount to intrinsic value here. (And don't forget to add back in that they have $2.1 billion of equity value in GreatLand, which, depending on various assumptions, might itself be undervalued significantly.)

Thanks for chiming in. It's great that we are all back of the napkin gunning this, but if you actually model out the numbers, it's not anywhere near the speed most people think. Even if Charter reaches 4.5 billion in EBITDA, it's EV is 45 billion. It's still trading at 10x EBITDA. No change in valuation.

What's important here is understanding the organic growth rather than the additional add ons. Charter is using a 10x EBITDA stock to acquire a 7x EBITDA entity. It's automatically accretive, so I rather not think too much about future possible acquisitions, rather than focusing on the right metrics that Charter could do to organically grow the current business.

Is penetration rate increasing 300 basis points too much of an assumption? 
Title: Re: CHTR - Charter Communications
Post by: JoelS on October 28, 2014, 09:01:17 PM
I actually think that they can get significantly higher than $4.5B EBITDA through the deal.

Let's think about it this way. They're currently at around $3 billion in EBITDA, right? And they're about to purchase about $1 billion of EBITDA for $7 billion or thereabouts, and they're picking up another $2.1 billion of equity value + about $200 million of revenue share in GreatLand for 16 million more shares of New Charter Co.

Now, that already gets you to $4.2 billion of EBITDA before you get to the fact that Charter gets to lay off costs relating to Costs to Service Customers, Marketing and Other, which amounts to almost $3 billion in current costs over a user base that is now about double what it used to be -- including the Customer Swap and the GreatLand servicing agreement.

I think that it won't take much to see Charter squeeze around $5 billion of EBITDA out of the deal with Comcast and GreatLand. If you figure out a free cash flow based on maintenance cap-ex and figure they refinance their debt down to a reasonable interest rate, then you're looking at a pretty steep discount to intrinsic value here. (And don't forget to add back in that they have $2.1 billion of equity value in GreatLand, which, depending on various assumptions, might itself be undervalued significantly.)

Thanks for chiming in. It's great that we are all back of the napkin gunning this, but if you actually model out the numbers, it's not anywhere near the speed most people think. Even if Charter reaches 4.5 billion in EBITDA, it's EV is 45 billion. It's still trading at 10x EBITDA. No change in valuation.

What's important here is understanding the organic growth rather than the additional add ons. Charter is using a 10x EBITDA stock to acquire a 7x EBITDA entity. It's automatically accretive, so I rather not think too much about future possible acquisitions, rather than focusing on the right metrics that Charter could do to organically grow the current business.

Is penetration rate increasing 300 basis points too much of an assumption?


my understanding is they will raise 8.4bn in debt leaving them with 22.4bn in debt. Market cap today is c 17bn. So EV is 39.4bn. If you think 10x EV/EBITDA on 4.5bn EBITDA is deserved, that means market cap has to rise 5.6bn or 33%.  With this you don't have to make any growth assumptions, that is all gravy (or goes someway to justifying the 10x EV/EBITDA)
Title: Re: CHTR - Charter Communications
Post by: ItsAValueTrap on October 28, 2014, 09:49:54 PM
What is your best guess on maintenance capex. 1.5 billion$? 700m$ interest? that is 5-2.2 = 2.8bn$. But I assume some taxes? another 800m$ in taxes, so about 2bn$ in FCF. then a 12x multiple on 92m shares is 260$ of value. Possibly 280-290$ with that greatland stake?

what is an appropriate cash flow multiple on these things. Since they do have a nice moat, and possibly some growth? So if you say a 15x multiple, then it gets interesting.

Look over the conference call transcripts.  Management provides some information on free cash flow, and how much of that is customer premise equipment (CPE).

Whenever Charter signs up a new customer, it needs to send out a set-top box that it will rent to that customer.  The CPE is growth capex.
Some of Charter's capex may get a little blurry.  If it improves its Internet infrastructure, some of that is maintenance and some of that would be growth.  It's hard to say what the right split is.  But in any case, Charter management doesn't break that out.
Title: Re: CHTR - Charter Communications
Post by: merkhet on October 29, 2014, 05:23:33 AM
I actually think that they can get significantly higher than $4.5B EBITDA through the deal.

Let's think about it this way. They're currently at around $3 billion in EBITDA, right? And they're about to purchase about $1 billion of EBITDA for $7 billion or thereabouts, and they're picking up another $2.1 billion of equity value + about $200 million of revenue share in GreatLand for 16 million more shares of New Charter Co.

Now, that already gets you to $4.2 billion of EBITDA before you get to the fact that Charter gets to lay off costs relating to Costs to Service Customers, Marketing and Other, which amounts to almost $3 billion in current costs over a user base that is now about double what it used to be -- including the Customer Swap and the GreatLand servicing agreement.

I think that it won't take much to see Charter squeeze around $5 billion of EBITDA out of the deal with Comcast and GreatLand. If you figure out a free cash flow based on maintenance cap-ex and figure they refinance their debt down to a reasonable interest rate, then you're looking at a pretty steep discount to intrinsic value here. (And don't forget to add back in that they have $2.1 billion of equity value in GreatLand, which, depending on various assumptions, might itself be undervalued significantly.)

Thanks for chiming in. It's great that we are all back of the napkin gunning this, but if you actually model out the numbers, it's not anywhere near the speed most people think. Even if Charter reaches 4.5 billion in EBITDA, it's EV is 45 billion. It's still trading at 10x EBITDA. No change in valuation.

What's important here is understanding the organic growth rather than the additional add ons. Charter is using a 10x EBITDA stock to acquire a 7x EBITDA entity. It's automatically accretive, so I rather not think too much about future possible acquisitions, rather than focusing on the right metrics that Charter could do to organically grow the current business.

Is penetration rate increasing 300 basis points too much of an assumption?


my understanding is they will raise 8.4bn in debt leaving them with 22.4bn in debt. Market cap today is c 17bn. So EV is 39.4bn. If you think 10x EV/EBITDA on 4.5bn EBITDA is deserved, that means market cap has to rise 5.6bn or 33%.  With this you don't have to make any growth assumptions, that is all gravy (or goes someway to justifying the 10x EV/EBITDA)

Wilson, I don't think you have to think about additional acquisitions outside of the Comcast deal (subscriber swap, customer purchase and GreatLand transaction) in order to get to more than $4.5 billion in EBITDA. I mean, think about it this way -- if they can squeeze $300 million in cost savings by doubling their user base, then they're @ $4.5 billion in EBITDA already.

Joel, don't forget that they're issuing equity for the GreatLand piece of the transaction. $17 billion in market cap does not include the equity issue.
Title: Re: CHTR - Charter Communications
Post by: Liberty on October 29, 2014, 07:10:33 AM
http://phx.corporate-ir.net/phoenix.zhtml?c=112298&p=irol-newsArticle&ID=1982904

Quote
Key highlights:

Third quarter revenues of $2.3 billion grew 8.0% as compared to the prior-year period, led by residential revenue growth of 6.7%, and commercial revenue growth of 17.7%.

Third quarter Adjusted EBITDA1 grew by 7.0% year-over-year. Net loss totaled $53 million in the third quarter of 2014, an improvement compared to a $70 million net loss in the year-ago period.

Total residential customer relationships grew by 4.9% over the last twelve months, with third quarter residential revenue per customer growing 2.0% compared to the prior-year period.

Residential customer relationships increased 68,000 during the third quarter, versus 46,000 during the third quarter of 2013. Residential primary service units ("PSUs") increased by 114,000 during the period, versus 100,000 in the year-ago quarter, including continued improvement in year-over-year Internet and video customer trends.

As of the end of the third quarter of 2014, Charter had completed over 80% of its all-digital initiative, having deployed over 2 million set top boxes since the start of Charter's all-digital transition in 2013. Charter remains on schedule to complete its all-digital initiative by year-end 2014.
Title: Re: CHTR - Charter Communications
Post by: JoelS on October 29, 2014, 03:13:22 PM
Merkhet, yes you are correct, my mistake - so they will issue $US 2.1bn of Charter equity and get 33% of Greatland in return. But there is still some difference between the current market price and what 10x EV/Ebitda pro forma the transaction implies. Maybe that difference is justified given the length of time until the deal closes, if it does.
Title: Re: CHTR - Charter Communications
Post by: merkhet on November 10, 2014, 03:02:51 PM
To the extent that you think Charter comes out well on the other side, this downdraft in stock price will help Liberty Broadband once it secures some cash in the rights offering.
Title: Re: CHTR - Charter Communications
Post by: Liberty on November 11, 2014, 07:35:31 PM
http://www.washingtonpost.com/blogs/the-switch/wp/2014/11/11/the-fcc-weighs-breaking-with-obama-over-the-future-of-the-internet/
Title: Re: CHTR - Charter Communications
Post by: giofranchi on November 11, 2014, 10:55:45 PM
To the extent that you think Charter comes out well on the other side, this downdraft in stock price will help Liberty Broadband once it secures some cash in the rights offering.

On the other hand, the lower the stock price of Liberty Broadband, the smaller the cash it will receive in the rights offering. Right?

Gio
Title: Re: CHTR - Charter Communications
Post by: merkhet on November 12, 2014, 06:19:49 AM
To the extent that you think Charter comes out well on the other side, this downdraft in stock price will help Liberty Broadband once it secures some cash in the rights offering.

On the other hand, the lower the stock price of Liberty Broadband, the smaller the cash it will receive in the rights offering. Right?

Gio

Yes, also true.
Title: Re: CHTR - Charter Communications
Post by: EliG on June 18, 2015, 06:16:46 PM
Q&A with Thomas Rutledge, 2015 TMT Symposium, June 17

https://guggenheim.metameetings.net/events/tmt2015/sessions/6422-charter-communications-inc/webcast
Title: Re: CHTR - Charter Communications
Post by: ccplz on September 07, 2015, 01:25:06 PM
That guy (Punchcard) seems to have a hard on for Malone.
Title: Re: CHTR - Charter Communications
Post by: marazul on November 13, 2015, 10:07:04 AM
Using the numbers from the proxy, EBITDA should grow to $19.5BN by 2019. Let´s say that during those 4 years the multiple gets compressed to 8.25x and that leverage is mantained at 4.0x. If they use all the FCF and incremental debt (as they have done historically and expect to do) the share count should be reduced by approximately 40%. Using that 8.25x multiple and 4.0x leverage would leave us with an equity value of $82.5BN or $435 per share using the reduced share count for an IRR over the 4 years of 23%. At that price, the FCF multiple would be close to 8.5x. Let´s assume CHTR deserves a 12x FCF multiple, that takes the stock to $617 or a 34% IRR over the 4 years. Yes, there are a lot of risks such as the TWC deal getting blocked, leverage, depending on the capital markets, technological risk, Google Fiber, etc.. but if things go according to plan then the upside is huge.
Title: Re: CHTR - Charter Communications
Post by: folivera13 on November 16, 2015, 05:10:28 AM
California Public Utilities Commission ruling on CHTR-TWC.  Seems like they will rule on the deal in June 2016. Anyone have any thoughts or insight? Can the DOJ and FCC override this? Is this very bearish on the deal?
Title: Re: CHTR - Charter Communications
Post by: Liberty on January 08, 2016, 10:01:29 AM
http://www.prnewswire.com/news-releases/new-york-state-approves-chartertime-warner-cable-transaction-300201578.html
Title: Re: CHTR - Charter Communications
Post by: giofranchi on February 10, 2016, 05:04:33 AM
Charter: An Attractive Idiosyncratic Risk In A Market Full Of Uncertainties

http://seekingalpha.com/article/3877636-charter-attractive-idiosyncratic-risk-market-full-uncertainties

Cheers,

Gio
Title: Re: CHTR - Charter Communications
Post by: EliG on February 11, 2016, 08:07:14 PM
Report: California speeding up Charter-TWC review

http://seekingalpha.com/news/3104536-report-california-speeding-charter-twc-review
Title: Re: CHTR - Charter Communications
Post by: Kiltacular on March 15, 2016, 08:31:10 PM
http://www.reuters.com/article/us-twc-charter-communi-fcc-idUSKCN0WI02Z


.S. Federal Communications Commission Chairman Tom Wheeler is likely to circulate a draft order approving Charter Communications Inc's (CHTR.O) $56 billion deal to buy Time Warner Cable Inc (TWC.N), the Wall Street Journal reported, citing people familiar with the matter.

The order, which could be circulated as soon as this week, would levy some conditions on the deal, such as preventing Charter from including clauses in pay-TV contracts that limit a content company's ability to offer its programming online or to new entrants, the WSJ reported on Tuesday.

The transaction will also likely include a requirement for Charter to build or upgrade service to more homes, the Journal said.
Title: Re: CHTR - Charter Communications
Post by: Liberty on March 28, 2016, 05:36:02 AM
http://www.nytimes.com/2016/03/28/business/media/charters-67-billion-cable-merger-hinges-on-the-cord-cutters.html
Title: Re: CHTR - Charter Communications
Post by: muscleman on April 03, 2016, 11:03:28 AM
Does anyone know the source of the diluted share count increase? It's been going up by about 1 million shares a quarter, but the 10-k shows the equity grants are only 164k shares for the whole 2015.
https://www.sec.gov/Archives/edgar/data/1091667/000109166716000396/chtr123115-10k.htm#s93EBB37E823E0AF10248B53A3DE2184F

Please see page F-29, F- 37 and F- 38.

The acquisition of 35% ownership of AVN in 2015 is all case, so that won't increase the count.
Title: Re: CHTR - Charter Communications
Post by: muscleman on April 03, 2016, 01:12:42 PM
Another question, what's the proper way to calculate CHTR's ROIC?
Their PPE plus accumulated D&A is 15 bn, but they also have 6 bn francise asset. I wonder if I should use adjusted EBITDA/(ppe+accumulated D&A+franchise value) to calculate it?

I know the traditional way to do this is to use EBIT/(total assets), but in the case of cable or real estate firms, the assets appreciate in value, so that may not be the best way.
Title: Re: CHTR - Charter Communications
Post by: muscleman on April 05, 2016, 09:45:36 AM
Does anyone know the source of the diluted share count increase? It's been going up by about 1 million shares a quarter, but the 10-k shows the equity grants are only 164k shares for the whole 2015.
https://www.sec.gov/Archives/edgar/data/1091667/000109166716000396/chtr123115-10k.htm#s93EBB37E823E0AF10248B53A3DE2184F

Please see page F-29, F- 37 and F- 38.

The acquisition of 35% ownership of AVN in 2015 is all case, so that won't increase the count.

I finally found out this is related to the exercise of warrants "pursuant to the Joint Plan of Reorganization upon the Company's emergence from bankruptcy in 2009."
So this should be a non-recurring event.
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 25, 2016, 11:55:58 AM
http://www.bloomberg.com/news/articles/2016-04-25/charter-takeover-of-time-warner-cable-gets-antitrust-approval

Quote
Charter Communications Inc. won U.S. antitrust approval for its $55 billion takeover of Time Warner Cable Inc., which would create the No. 2 U.S. cable provider, after agreeing to measures intended to protect distribution of online video.
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 26, 2016, 04:26:44 AM
People been waiting so long for this, when it comes they're all...

(http://www.relatably.com/m/img/waiting-skeleton-meme-maker/553a98434aa21808310057d3.jpg)
Title: Re: CHTR - Charter Communications
Post by: merkhet on April 26, 2016, 05:51:49 AM
People been waiting so long for this, when it comes they're all...

(http://www.relatably.com/m/img/waiting-skeleton-meme-maker/553a98434aa21808310057d3.jpg)

Tiiiiiime... was not on his side.

Title: Re: CHTR - Charter Communications
Post by: muscleman on April 26, 2016, 07:42:58 AM
http://www.bloomberg.com/news/articles/2016-04-25/charter-takeover-of-time-warner-cable-gets-antitrust-approval

Quote
Charter Communications Inc. won U.S. antitrust approval for its $55 billion takeover of Time Warner Cable Inc., which would create the No. 2 U.S. cable provider, after agreeing to measures intended to protect distribution of online video.

They are required to build 1 million homes in which a competitor with at least 25 M speed internet is already available. Not sure if the economics will be good on these projects.
Does anyone know if AT&T's U-verse is DSL based? I see on their website that U-Verse can go up to 1 G as well.
I don't think CHTR will build out to homes that already have Comcast or other cable internet. They will most likely build to homes with AT&T's DSL access.
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on April 26, 2016, 10:13:47 AM
Quote
They are required to build 1 million homes in which a competitor with at least 25 M speed internet is already available. Not sure if the economics will be good on these projects.

Small price to pay to get the deal done. They can stretch the build out over many years. As a % of homes already passed for New Charter, 1M is a small number.
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 12, 2016, 11:41:35 AM
There we go:

http://www.bloomberg.com/news/articles/2016-05-12/charter-twc-merger-clears-final-hurdle-with-california-approval
Title: Re: CHTR - Charter Communications
Post by: Liberty on August 09, 2016, 11:06:11 AM
Q2:

Quote
Key highlights:
• Charter is now a company with greater scale, an enhanced footprint, and new revenue, product innovation and cost savings opportunities. Charter's network reaches 48.8 million homes and businesses, and serves 25.6 million residential and small and medium business ("SMB") customers.
• Pro forma1 for the Transactions, second quarter revenues of $10.0 billion grew 6.6% as compared to the prior-year period, driven by residential revenue growth of 5.6% and commercial revenue growth of 13.4%. On an actual1 basis, second quarter revenue of $6.2 billion grew 153.5% year-over-year, driven primarily by the Transactions.
• On a pro forma basis, total customer relationships increased 173,000 during the second quarter, compared to 54,000 during the second quarter of 2015, and for the twelve months ended June 30, 2016, grew by 1,251,000 or 5.1%. Pro forma residential and SMB primary service units ("PSUs") increased by 249,000 during the period, versus 270,000 in the year-ago quarter. The year-over-year decline in PSU net additions was driven by fewer voice net additions in the second quarter of 2016 versus the second quarter of 2015.
• On a pro forma basis, second quarter Adjusted EBITDA2 of $3.5 billion grew 9.0% year-over-year. Excluding transition costs in the second quarters of 2016 and 2015, Adjusted EBITDA grew by 9.2% year-over-year. On an actual basis, second quarter Adjusted EBITDA grew by 161.6%, driven primarily by the Transactions.
• Pro forma net income totaled $280 million in the second quarter, compared to $107 million during the same period last year, driven by higher income from operations year-over-year. On an actual basis, net income totaled $3.1 billion, compared to a net loss of $122 million during the second quarter of 2015, driven by higher income from operations following the close of the Transactions and the reduction of substantially all of Charter’s historical valuation allowance on its deferred tax assets.
• On a pro forma basis, second quarter capital expenditures totaled $2.1 billion, as compared to $1.9 billion in the year-ago period. Excluding transition capital, second quarter 2016 pro forma capital expenditures totaled $2.0 billion as compared to $1.8 billion during the second quarter of 2015. Second quarter actual capital expenditures totaled $1.3 billion.
Title: Re: CHTR - Charter Communications
Post by: muscleman on August 09, 2016, 01:48:39 PM
Q2:

Quote
Key highlights:
• Charter is now a company with greater scale, an enhanced footprint, and new revenue, product innovation and cost savings opportunities. Charter's network reaches 48.8 million homes and businesses, and serves 25.6 million residential and small and medium business ("SMB") customers.
• Pro forma1 for the Transactions, second quarter revenues of $10.0 billion grew 6.6% as compared to the prior-year period, driven by residential revenue growth of 5.6% and commercial revenue growth of 13.4%. On an actual1 basis, second quarter revenue of $6.2 billion grew 153.5% year-over-year, driven primarily by the Transactions.
• On a pro forma basis, total customer relationships increased 173,000 during the second quarter, compared to 54,000 during the second quarter of 2015, and for the twelve months ended June 30, 2016, grew by 1,251,000 or 5.1%. Pro forma residential and SMB primary service units ("PSUs") increased by 249,000 during the period, versus 270,000 in the year-ago quarter. The year-over-year decline in PSU net additions was driven by fewer voice net additions in the second quarter of 2016 versus the second quarter of 2015.
• On a pro forma basis, second quarter Adjusted EBITDA2 of $3.5 billion grew 9.0% year-over-year. Excluding transition costs in the second quarters of 2016 and 2015, Adjusted EBITDA grew by 9.2% year-over-year. On an actual basis, second quarter Adjusted EBITDA grew by 161.6%, driven primarily by the Transactions.
• Pro forma net income totaled $280 million in the second quarter, compared to $107 million during the same period last year, driven by higher income from operations year-over-year. On an actual basis, net income totaled $3.1 billion, compared to a net loss of $122 million during the second quarter of 2015, driven by higher income from operations following the close of the Transactions and the reduction of substantially all of Charter’s historical valuation allowance on its deferred tax assets.
• On a pro forma basis, second quarter capital expenditures totaled $2.1 billion, as compared to $1.9 billion in the year-ago period. Excluding transition capital, second quarter 2016 pro forma capital expenditures totaled $2.0 billion as compared to $1.8 billion during the second quarter of 2015. Second quarter actual capital expenditures totaled $1.3 billion.

I saw the results earlier today, and scratching my head as to why CHTR is doing much better than Liberty Global. Any thoughts on that?
Title: Re: CHTR - Charter Communications
Post by: TheAiGuy on August 09, 2016, 07:22:16 PM

I saw the results earlier today, and scratching my head as to why CHTR is doing much better than Liberty Global. Any thoughts on that?

Lot of reasons -- but the biggest is probably that there is a lot more English content for an American audience in TV than there are local-language (and cultural) context for European markets. This means that the average American has higher quality content than the average European (the average quality of the content does't matter -- just the raw volume of it). Hence TV, has always been a bigger US phenomenon than in Europe, so its a much more important product here.

~15 years ago, the TV market was very competitive in the US with the advent of Satellite but now, broadband internet is far more important and this has shifted the balance back towards cable. Broadband internet is also largely (though not entirely) about video and the shift from a subscription package to one plus an OTT package has allowed for a secular growth in cable subscriptions at a cost to traditional internet providers and satellite. In Europe, which is also far more Balkanized and far more competitive, doesn't face this same pressures to the same degree. In contrast, Charter inherited a substantial pool of assets (in terms of wires in the ground) that were under-managed that now have a substantial, and importantly, new, competitive advantage. There aren't any clever bits of strategy here -- Charter really just has to execute to grow revenue and the extra scale and low interest rates (and NOLs) provide a lot of operating and financial leverage for that growth. B/c of the leverage involved, any data that reinforces this story will send the stock through the roof.


Just full disclosure, I made all of this up, and I know very little about LBTYA/K but I think it's pretty compelling.
Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on August 09, 2016, 07:40:25 PM


I saw the results earlier today, and scratching my head as to why CHTR is doing much better than Liberty Global. Any thoughts on that?
[/quote]

define "doing much better".
Title: Re: CHTR - Charter Communications
Post by: muscleman on August 10, 2016, 06:40:17 AM


I saw the results earlier today, and scratching my head as to why CHTR is doing much better than Liberty Global. Any thoughts on that?

define "doing much better".
[/quote]

Pro forma EBITDA growth is around 9%. The growth of EBITDA is what I meant doing much better.
Liberty Global said they were targeting 7-9% growth YoY into 2018, but this year so far it has only been 2%. They said in Q1 that they think the second half will accelerate and this year's growth will be 7-9%, but in Q2 they lowered to 5-7% but still stuck to the 7-9% for the next two years. Not sure how much I can trust from the promotional Mike Fries's mouth.  :(
Title: Re: CHTR - Charter Communications
Post by: muscleman on August 10, 2016, 07:00:12 AM

I saw the results earlier today, and scratching my head as to why CHTR is doing much better than Liberty Global. Any thoughts on that?

Lot of reasons -- but the biggest is probably that there is a lot more English content for an American audience in TV than there are local-language (and cultural) context for European markets. This means that the average American has higher quality content than the average European (the average quality of the content does't matter -- just the raw volume of it). Hence TV, has always been a bigger US phenomenon than in Europe, so its a much more important product here.

~15 years ago, the TV market was very competitive in the US with the advent of Satellite but now, broadband internet is far more important and this has shifted the balance back towards cable. Broadband internet is also largely (though not entirely) about video and the shift from a subscription package to one plus an OTT package has allowed for a secular growth in cable subscriptions at a cost to traditional internet providers and satellite. In Europe, which is also far more Balkanized and far more competitive, doesn't face this same pressures to the same degree. In contrast, Charter inherited a substantial pool of assets (in terms of wires in the ground) that were under-managed that now have a substantial, and importantly, new, competitive advantage. There aren't any clever bits of strategy here -- Charter really just has to execute to grow revenue and the extra scale and low interest rates (and NOLs) provide a lot of operating and financial leverage for that growth. B/c of the leverage involved, any data that reinforces this story will send the stock through the roof.


Just full disclosure, I made all of this up, and I know very little about LBTYA/K but I think it's pretty compelling.
Well, I think that's the reason why content companies are making a ton in the US. EU cable operators have higher EBITDA margins than US. (65% vs 48% roughly)
Do you think there is more competition in the EU? I read through the risk factors of LGI and the primary competition comes from DSL internet providers, which is similar to US.
Title: Re: CHTR - Charter Communications
Post by: TheAiGuy on August 10, 2016, 07:10:10 AM

I saw the results earlier today, and scratching my head as to why CHTR is doing much better than Liberty Global. Any thoughts on that?

Lot of reasons -- but the biggest is probably that there is a lot more English content for an American audience in TV than there are local-language (and cultural) context for European markets. This means that the average American has higher quality content than the average European (the average quality of the content does't matter -- just the raw volume of it). Hence TV, has always been a bigger US phenomenon than in Europe, so its a much more important product here.

~15 years ago, the TV market was very competitive in the US with the advent of Satellite but now, broadband internet is far more important and this has shifted the balance back towards cable. Broadband internet is also largely (though not entirely) about video and the shift from a subscription package to one plus an OTT package has allowed for a secular growth in cable subscriptions at a cost to traditional internet providers and satellite. In Europe, which is also far more Balkanized and far more competitive, doesn't face this same pressures to the same degree. In contrast, Charter inherited a substantial pool of assets (in terms of wires in the ground) that were under-managed that now have a substantial, and importantly, new, competitive advantage. There aren't any clever bits of strategy here -- Charter really just has to execute to grow revenue and the extra scale and low interest rates (and NOLs) provide a lot of operating and financial leverage for that growth. B/c of the leverage involved, any data that reinforces this story will send the stock through the roof.


Just full disclosure, I made all of this up, and I know very little about LBTYA/K but I think it's pretty compelling.
Well, I think that's the reason why content companies are making a ton in the US. EU cable operators have higher EBITDA margins than US. (65% vs 48% roughly)
Do you think there is more competition in the EU? I read through the risk factors of LGI and the primary competition comes from DSL internet providers, which is similar to US.

I think broadband internet is more important in the US b/c video is more important. I don't know enough about LGI to really comment on their competitive position. The Charter story is about growing into this massive internet monopoly -- is that true for LGI?
Title: Re: CHTR - Charter Communications
Post by: muscleman on August 10, 2016, 07:33:11 AM

I saw the results earlier today, and scratching my head as to why CHTR is doing much better than Liberty Global. Any thoughts on that?

Lot of reasons -- but the biggest is probably that there is a lot more English content for an American audience in TV than there are local-language (and cultural) context for European markets. This means that the average American has higher quality content than the average European (the average quality of the content does't matter -- just the raw volume of it). Hence TV, has always been a bigger US phenomenon than in Europe, so its a much more important product here.

~15 years ago, the TV market was very competitive in the US with the advent of Satellite but now, broadband internet is far more important and this has shifted the balance back towards cable. Broadband internet is also largely (though not entirely) about video and the shift from a subscription package to one plus an OTT package has allowed for a secular growth in cable subscriptions at a cost to traditional internet providers and satellite. In Europe, which is also far more Balkanized and far more competitive, doesn't face this same pressures to the same degree. In contrast, Charter inherited a substantial pool of assets (in terms of wires in the ground) that were under-managed that now have a substantial, and importantly, new, competitive advantage. There aren't any clever bits of strategy here -- Charter really just has to execute to grow revenue and the extra scale and low interest rates (and NOLs) provide a lot of operating and financial leverage for that growth. B/c of the leverage involved, any data that reinforces this story will send the stock through the roof.


Just full disclosure, I made all of this up, and I know very little about LBTYA/K but I think it's pretty compelling.
Well, I think that's the reason why content companies are making a ton in the US. EU cable operators have higher EBITDA margins than US. (65% vs 48% roughly)
Do you think there is more competition in the EU? I read through the risk factors of LGI and the primary competition comes from DSL internet providers, which is similar to US.

I think broadband internet is more important in the US b/c video is more important. I don't know enough about LGI to really comment on their competitive position. The Charter story is about growing into this massive internet monopoly -- is that true for LGI?

Yeah. Same for LGI, and on top of that, EU content providers are more fragmented as you said, and they charge a fraction of the US content providers, so LGI is supposed to make money from both Video and internet.
But the growth so far has not been good. Hope the second half did pick up as they predicted.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on August 10, 2016, 09:16:40 AM
My thesis for Charter vs Global was a simple one: America will outperform Europe. Also the regulatory framework is more pro-business and less distributional. I also thought the Europeans would cap pricing power and require more capex spending and this would cut into profits over time...Not saying American regulators don't do this but on a smaller scale. I remember Buffett's speech where he said if Coke was based in Amsterdam he'd still like it but just a little bit less. Cable is no Coke and probably far more regulated so it becomes more important to know the operating environment, consumer culture, etc...For some reason, US businesses seem to do well for shareholders in a safer fashion.

Title: Re: CHTR - Charter Communications
Post by: muscleman on August 10, 2016, 09:52:56 AM
My thesis for Charter vs Global was a simple one: America will outperform Europe. Also the regulatory framework is more pro-business and less distributional. I also thought the Europeans would cap pricing power and require more capex spending and this would cut into profits over time...Not saying American regulators don't do this but on a smaller scale. I remember Buffett's speech where he said if Coke was based in Amsterdam he'd still like it but just a little bit less. Cable is no Coke and probably far more regulated so it becomes more important to know the operating environment, consumer culture, etc...For some reason, US businesses seem to do well for shareholders in a safer fashion.


In the Liberty Global thread I asked why merger approvals tend to go in a few months instead of over a year like the CHTR/TWC merger, and people said regulatory environment in EU is much better than in the US. How come you think the opposite? From which metrics do you base your view on? Do you mean EU regulators push cable cos to spend more capex? I do see that EU broadband is in the 200-300 Mbps range but the US ones are typically touting the 60 Mbps speed.

Yeah EU's economic is not as good as the US, but the interest rates are so much lower in the EU, so that mitigates a bit. ::)


Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on August 10, 2016, 10:31:10 AM
Perhaps the faster approvals are so that they can torture one company instead of two, a sort of ode to convenience :)

Of course you have to study each company. I just used a simple mental model, namely that regulators in Europe could be tougher on a utility-like business than in the US, perhaps even the starting profitability would be lower. They might even be swayed by the fact Liberty is a US founded company.
All of this is conjecture but when you pull the trigger you have to decide: I know the US environment and maybe the return will be lower but the outcome more certain.
A case of home-bias advantage with the bonus that the US home advantage is alright.
Also swirling in my head was the thought that over long periods of time virtually no stock market has done as well as the US one so there are probably structural benefits to the US economic system.
In short, I thought the Americans would shoot themselves in the foot, but less so than the Europeans.
It's an amazing ability of people to shoot themselves in the foot. It's fascinating to rank the foot-shooting.

I like to apply a mental model before getting scientific. Broad strokes, no need for too much numerical crunching at the start, just enough to choose A over B, then you can dig in to see if you want C or D under B, or E, F , G under C, etc...
Title: Re: CHTR - Charter Communications
Post by: Liberty on August 15, 2016, 04:44:55 PM
Soros's fund took a decent-sizd position in LBRDK. Almost 9m shares.

http://whalewisdom.com/filer/soros-fund-management-llc#/tabholdings_tab_link

Update: Thanks to @FrancoOlivera on Twitter for reminding me that they got these shares from the deal with Liberty to finance part of the TWC acquisition.
Title: Re: CHTR - Charter Communications
Post by: Liberty on August 31, 2016, 05:58:30 PM
CHTR is being added to the SP500 to replace EMC (and KHC is going in the SP100):

http://www.prnewswire.com/news-releases/kraft-heinz-set-to-join-sp-100-charter-communications-to-join-sp-500-300321081.html
Title: Re: CHTR - Charter Communications
Post by: Liberty on September 21, 2016, 05:31:43 PM
CHTR has asked Verizon to active its MVNO agreement, going for quad play:

http://www.fiercecable.com/cable/rutledge-charter-has-asked-verizon-to-activate-mvno-agreement

Quote
Verizon in 2011 purchased AWS-1 spectrum from Bright House Networks, Comcast, Cox and TWC (a group dubbed SpectrumCo) and in return gave those companies access to its wireless network for use in a potential MVNO offering. […]

“We’d like to put Netflix and other [SVOD] services into our UI, so our customers can operate them seamlessly with our products,” he said. “Our primary objective is to follow the customer wherever they go.”

Rutledge said 57 percent of Charter’s pay-TV users also subscribe to Netflix. 
Title: Re: CHTR - Charter Communications
Post by: Liberty on November 01, 2016, 07:50:49 AM
http://www.multichannel.com/news/distribution/charter-talks-wireless-network-play-fcc/408794
Title: Re: CHTR - Charter Communications
Post by: muscleman on November 01, 2016, 08:04:48 AM
http://www.multichannel.com/news/distribution/charter-talks-wireless-network-play-fcc/408794


How will this impact the existing wireless carriers? Softbank has long complained that US has more than 2 wireless competitors and that makes it brutal. Does CHTR want to join the competition here?
Title: Re: CHTR - Charter Communications
Post by: Liberty on November 01, 2016, 08:55:21 AM
http://www.multichannel.com/news/distribution/charter-talks-wireless-network-play-fcc/408794


How will this impact the existing wireless carriers? Softbank has long complained that US has more than 2 wireless competitors and that makes it brutal. Does CHTR want to join the competition here?

They want quad play to reduce their churn. They'll probably go the MVNO + wifi route, through the deal they have with Verizon.
Title: Re: CHTR - Charter Communications
Post by: dwy000 on November 01, 2016, 01:25:10 PM
Would love to know the details of that MVNO agmt with Verizon.  Both parties are pretty savvy.  I would guess that they are (at least initially) using a pretty broad service offering from Verizon and then narrow it down if they get the uptake of customers.

It's a really tough business.  You need big volume to make it work but the only way to get that volume is through price - which kills the economics of it and the ability to invest big dollars in marketing and infrastructure (plus relationships and retail, etc. etc. etc.).
Title: Re: CHTR - Charter Communications
Post by: Liberty on November 03, 2016, 05:50:30 AM
Q3: Revenues: +7.4%, EBITDA +14.5%, subs +279k.

http://ir.charter.com/phoenix.zhtml?c=112298&p=irol-newsArticle&ID=2219119

Title: Re: CHTR - Charter Communications
Post by: maybe4less on November 03, 2016, 06:36:43 PM
Was there something not to like here?
Title: Re: CHTR - Charter Communications
Post by: muscleman on November 04, 2016, 11:54:29 AM
The results are far better than LBTYA and LILA. I don't understand why those two are struggling with growth, though to be fair, LBTYA's growth is not too bad, just not good compared with CHTR, and they trade at similar EV/EBITDA multiples.  ::)
Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on January 03, 2017, 12:50:34 PM
just keep in mind there is probably some meaningful political spend this year hitting their advertising bucket.  ~100% margin.  That's not going to be in the print starting January.  Still a good story.
Title: Re: CHTR - Charter Communications
Post by: Liberty on January 26, 2017, 06:34:20 AM
Verizon apparently looking at a merger with CHTR:

http://www.wsj.com/articles/verizon-is-exploring-combination-with-cable-firm-charter-communications-1485439901
Title: Re: CHTR - Charter Communications
Post by: Liberty on January 26, 2017, 08:56:56 AM
More details:

https://www.bloomberg.com/news/articles/2017-01-26/verizon-exploring-combination-with-charter-wsj-reports

Looks like Maffei was approached, but not CHTR directly, and they're looking at multiple deals, but this might be the one that makes the most sense..
Title: Re: CHTR - Charter Communications
Post by: Liberty on February 24, 2017, 11:49:20 AM
Quote
FCC chairman Ajit Pai has circulated an item adjusting a Charter-Time Warner Cable deal buildout condition so that it would no longer require Charter to overbuild where a million homes were already getting broadband service.

http://www.broadcastingcable.com/news/washington/pai-proposes-removing-charter-twc-overbuild-condition/163581
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 01, 2017, 08:30:23 AM
Greg Maffei talked a bit about CHTR this morning:

http://video.cnbc.com/gallery/?video=3000614682&play=1
Title: Re: CHTR - Charter Communications
Post by: muscleman on May 01, 2017, 10:25:56 AM
Does anyone know how this may impact CHTR?

https://www.law360.com/publicpolicy/articles/918984/breaking-dc-circ-refuses-to-rehear-net-neutrality-challenge?nl_pk=dcb4823a-d63f-4a78-8335-a8570deed8f6&utm_source=newsletter&utm_medium=email&utm_campaign=publicpolicy
Title: Re: CHTR - Charter Communications
Post by: maybe4less on May 01, 2017, 11:43:48 AM
Does anyone know how this may impact CHTR?

https://www.law360.com/publicpolicy/articles/918984/breaking-dc-circ-refuses-to-rehear-net-neutrality-challenge?nl_pk=dcb4823a-d63f-4a78-8335-a8570deed8f6&utm_source=newsletter&utm_medium=email&utm_campaign=publicpolicy

Likely no impact. The court challenge is moot now that Pai is planning on repealing the rule.
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 02, 2017, 04:37:53 AM
CHTR Q1:

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mzc2MjU5fENoaWxkSUQ9LTF8VHlwZT0z&t=1&cb=636293131780142848
Title: Re: CHTR - Charter Communications
Post by: muscleman on May 02, 2017, 07:50:06 AM
CHTR Q1:

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mzc2MjU5fENoaWxkSUQ9LTF8VHlwZT0z&t=1&cb=636293131780142848

What do you guys think? The video addition last year turned into losses this year. Internet additions also decreased a bit.
The revenue increase is just 4%.

Title: Re: CHTR - Charter Communications
Post by: Liberty on May 07, 2017, 04:55:31 PM
Wireless partnership for Comcast and Charter:

https://www.wsj.com/articles/comcast-charter-to-strike-wireless-partnership-1494200087
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 31, 2017, 07:11:23 PM
Apparently Verizon tried to buy CHTR:

http://nypost.com/2017/05/31/cable-giant-charter-snubbed-a-buyout-bid-from-verizon/

Quote
Verizon boss Lowell McAdam, his company facing slowing sales of mobile phones, made a proposal to acquire cable-TV giant Charter Communications in recent months, three sources told The Post.

The offer — valued at between $350 and $400 a share, and well over $100 billion, according to two of the sources familiar with the move — was rejected by Liberty Media-controlled Charter because it was too low — and because Charter was not ready to sell.
Title: Re: CHTR - Charter Communications
Post by: Liberty on June 29, 2017, 07:38:42 AM
Interesting writeup about Charter and an indirect way to see how much buybacks they're doing on a monthly basis:

http://www.yetanothervalueblog.com/2017/06/charter-levered-return-of-capital-story.html
Title: Re: CHTR - Charter Communications
Post by: Liberty on July 27, 2017, 06:38:02 AM
CHTR Q2: http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mzg0MzA1fENoaWxkSUQ9LTF8VHlwZT0z&t=1&cb=636367527732848674

Revenue 3.9% Y/Y, Adjusted EBITDA 8.6% Y/Y, net adds of 211K, repurchase of 11.2M CHTR shares, or equivalent, for $3.7B.

Those $CHTR repurchases are at annual run rate of $14.8bn/year. On a $94bn market cap… 🤔
Title: Re: CHTR - Charter Communications
Post by: muscleman on July 28, 2017, 08:36:20 PM
https://www.thestreet.com/story/14248097/1/sprint-s-owner-proposes-merger-with-charter-communications.html?puc=CNBC&cm_ven=CNBC
https://www.bloomberg.com/news/articles/2017-07-29/charter-is-said-to-rebuff-sprint-corp-s-merger-proposal
Title: Re: CHTR - Charter Communications
Post by: Liberty on July 31, 2017, 05:31:51 AM
Looks like there might be a direct offer from Softbank:

https://www.bloomberg.com/news/articles/2017-07-31/softbank-s-son-is-said-to-plan-direct-offer-for-charter

https://www.bloomberg.com/news/articles/2017-07-31/charter-has-no-interest-in-softbank-s-proposal-to-buy-sprint
Title: Re: CHTR - Charter Communications
Post by: Liberty on July 31, 2017, 12:05:50 PM
Not given up yet:

https://www.cnbc.com/2017/07/31/softbank-hasnt-given-up-on-charter-yet-sources-say.html
Title: Re: CHTR - Charter Communications
Post by: Liberty on August 09, 2017, 06:48:23 AM
 ;D

https://www.cnbc.com/2017/08/09/altice-weighing-bid-for-charter-communications.html
Title: Re: CHTR - Charter Communications
Post by: Gamecock-YT on August 09, 2017, 08:07:15 AM
Are they serious in play or is this all nonsense? Seems to be too much smoke to just be conincidence.
Title: Re: CHTR - Charter Communications
Post by: thefatbaboon on August 09, 2017, 08:54:57 AM
If Charter owners wanted their equity to contain Altice they would make an offer and Drahi could become a shareholder alongside Malone, Newhouses, Buffett etc. If Charter owners wanted a massively levered equity they could do it without Drahi and still stay in control.

So, if Altice wants to be in control and cash out the Charter owners they need to make a cash offer attractive and enough to pay all off everyones taxes - probably +$500.  Don't see how Altice could open their mouth wide enough for a mainly cash offer at $150bn.
Title: Re: CHTR - Charter Communications
Post by: Liberty on August 09, 2017, 09:50:05 AM
Are they serious in play or is this all nonsense? Seems to be too much smoke to just be conincidence.

I don't think Malone's really interested, but if someone is willing to grossly overpay, he'll look at it and might do it.
Title: Re: CHTR - Charter Communications
Post by: Packer16 on August 09, 2017, 09:57:22 AM
Remember he sold TCI to AT&T at nice multiple of EBITDA (12x I think).  If someone is willing to offer a high enough multiple, the business is for sale.

Packer
Title: Re: CHTR - Charter Communications
Post by: dwy000 on August 09, 2017, 10:30:59 AM
That's true.  But he also very much regretted taking AT&T stock and watching it dissipate while he stood on the sidelines and couldn't do anything because of lockup.  I would guess his price differs depending upon cash vs. Altice/Softbank stock.
Title: Re: CHTR - Charter Communications
Post by: namo on August 09, 2017, 10:44:57 AM
Except that if it's cash, he has to pay taxes, which he hates...
So yes, it would have to be a *great* offer.
Title: Re: CHTR - Charter Communications
Post by: TheAiGuy on August 09, 2017, 06:12:34 PM
Are they serious in play or is this all nonsense? Seems to be too much smoke to just be conincidence.

Seriously fucking hope not
Title: Re: CHTR - Charter Communications
Post by: skanjete on August 10, 2017, 01:13:14 AM
Remember he sold TCI to AT&T at nice multiple of EBITDA (12x I think).  If someone is willing to offer a high enough multiple, the business is for sale.

Packer

There were other reasons for the sale of TCI as well, mainly the upcoming satellite competition (and lesser so the internet threat). This is well explained in "Cable Cowboy".
But on top of that, Malone succeeded in extracting a very attractive price as well. It was perfectly executed, but afterwards he was stuck with a unsalable minority interest in ATT which stung him big time.

So Malone was not only motivated by the price of the deal. I don't have the feeling he's in the same situation right now (as of yet).
Title: Re: CHTR - Charter Communications
Post by: Liberty on September 06, 2017, 10:43:29 AM
New rumors of an Altice bid  ::)

http://www.reuters.com/article/altice-loans/lpc-bankers-work-on-us70bn-debt-for-altice-charter-tie-up-idUSL8N1LN4NK
Title: Re: CHTR - Charter Communications
Post by: Liberty on September 11, 2017, 07:21:16 AM
CHTR raising new debt and increasing its buyback authorization to $6.4bn:

http://ir.charter.com/phoenix.zhtml?c=112298&p=irol-newsArticle&ID=2299699
Title: Re: CHTR - Charter Communications
Post by: Liberty on September 13, 2017, 11:24:17 AM
https://seekingalpha.com/article/4106337-charter-communications-chtr-ceo-tom-rutledge-goldman-sachs-communacopia-brokers-conference?part=single
Title: Re: CHTR - Charter Communications
Post by: Liberty on September 14, 2017, 02:01:56 PM
https://www.bloomberg.com/news/articles/2017-09-14/it-s-official-verizon-has-moved-on-from-possible-cable-tie-up

Translation is probably that they approached CHTR and Malone said "no".
Title: Re: CHTR - Charter Communications
Post by: Liberty on October 02, 2017, 06:54:42 AM
http://www.yetanothervalueblog.com/2017/10/still-bullish-on-charter-chtr.html
Title: Re: CHTR - Charter Communications
Post by: Liberty on October 05, 2017, 06:39:40 PM
http://www.yetanothervalueblog.com/2017/10/cord-cutting-and-other-cable-risks-chtr.html
Title: Re: CHTR - Charter Communications
Post by: Liberty on October 26, 2017, 05:40:48 AM
CHTR Q3:

http://ir.charter.com/phoenix.zhtml?c=112298&p=irol-newsArticle&ID=2311569

Quote
Key highlights:

Third quarter total customer relationships increased 212,000, compared to 275,000 during the third quarter of 2016, when excluding the impact of customer activity related to Legacy Bright House's seasonal customer plan in 2016.2 Third quarter total residential and SMB primary service units ("PSUs") increased by 257,000, while third quarter 2016 PSUs grew by 395,000, when adjusted for the seasonal customer program changes at Legacy Bright House.
Third quarter revenues of $10.5 billion grew 4.2%, as compared to the prior year period, driven by residential revenue growth of 4.4% and commercial revenue growth of 8.0%, partly offset by a decline in advertising revenue of 11.1%, due to lower political revenue.
Third quarter Adjusted EBITDA3 of $3.8 billion grew 5.0% year-over-year, and 4.7% when excluding transition costs.
Net income attributable to Charter shareholders in the third quarter declined to $48 million from $189 million during the same period last year. The decline was driven by an increase in depreciation and amortization in the third quarter of 2017, partly offset by a year-over-year increase in Adjusted EBITDA.
Third quarter capital expenditures totaled $2.4 billion, and $2.3 billion when excluding transition capital expenditures.
During the third quarter, Charter purchased approximately 10.9 million shares of Charter Class A common stock and Charter Holdings common units for approximately $4.0 billion.
Title: Re: CHTR - Charter Communications
Post by: Gamecock-YT on November 01, 2017, 08:37:39 PM
Here we go again

http://nypost.com/2017/11/01/softbank-definitely-in-talks-with-charter-about-merger/

SoftBank ‘definitely’ in talks with Charter about merger
Title: Re: CHTR - Charter Communications
Post by: Liberty on November 02, 2017, 04:24:24 AM
 I don't think they're getting the message...

http://nypost.com/2017/11/01/softbank-definitely-in-talks-with-charter-about-merger/
Title: Re: CHTR - Charter Communications
Post by: Liberty on November 06, 2017, 06:45:03 AM
More deal speculation. It's déjà vu all over again..

https://www.cnbc.com/2017/11/06/softbank-willing-to-reengage-charter-communications-on-deal-sources-say.html

Quote
During the summer the Japanese conglomerate had worked on a deal to acquire Charter for $540 a share in cash and stock, the sources said.
Title: Re: CHTR - Charter Communications
Post by: Liberty on November 13, 2017, 07:00:37 AM
Some speculation in the NY Post about Rutledge and Malone not seeing eye to eye about whether to sell or do more M&A:

http://nypost.com/2017/11/12/charters-ceo-butts-heads-with-biggest-shareholder/
Title: Re: CHTR - Charter Communications
Post by: Gamecock-YT on November 13, 2017, 07:32:18 AM
Softbank just needs to raise price to whatever Rutledge's big options exercise price is....$564, I think?
Title: Re: CHTR - Charter Communications
Post by: Liberty on November 13, 2017, 08:16:59 AM
I don't think the journalist quite understands the balance of power. I think in the hand, it'll be Malone who decides. He has lots of board seats, he picked Rutledge, and he has more influence than anyone else in the industry. It might be true that they're debating the best way to go forward and aren't sure yet if they'd take a really high offer or just keep executing on the plan, knowing that there'll be other offers later anyway if they ever change their minds. It'll probably depend on the terms of any deal offered (Malone probably doesn't want a repeat of what happened when he sold TCI and got stuck with billions in stock that he couldn't sell in a company he didn't control...). In other words, if Masa is the kind of guy to overpay for CHTR, Malone won't want to be stuck with a bunch of Softbank stock...
Title: Re: CHTR - Charter Communications
Post by: Jurgis on November 13, 2017, 08:29:34 AM
I doubt SoftBank can pay in cash for Charter. It's not even clear if Malone would want cash - taxes?? So, yeah, majority of purchase would likely have to be Softbank shares, which Malone might not want either.

IMO Masa should just buy DISCA, TRIP, EXPE, LGF... all my "crappy" Liberty universe companies.  8)  ;D
Title: Re: CHTR - Charter Communications
Post by: Happy on November 22, 2017, 02:42:00 AM
https://www.bloomberg.com/news/articles/2017-11-21/fcc-head-proposes-abandoning-obama-era-net-neutrality-rules (https://www.bloomberg.com/news/articles/2017-11-21/fcc-head-proposes-abandoning-obama-era-net-neutrality-rules)

Should be very good for Charter if they really abandon net neutrality.
Title: Re: CHTR - Charter Communications
Post by: Jurgis on November 22, 2017, 07:55:16 AM
Defend net neutrality, defend Internet!

https://www.eff.org/deeplinks/2017/11/today-and-every-day-we-fight-defend-open-internet
Title: Re: CHTR - Charter Communications
Post by: no_free_lunch on November 29, 2017, 06:31:13 AM
http://www.yetanothervalueblog.com/2017/10/still-bullish-on-charter-chtr.html

These 2 articles were excellent reads.  Sounds like the author is a telecom analyst.  They bring you up to speed on the situation very quickly.

It sounds like the biggest risk to the thesis is 5G.  This author is not too concerned and it does sound like a longer term issue but with CHTR being so leveraged it could really turn on you if there's any doubts.  Not that CHTR is completely doomed in that scenario but if they have to pivot that leverage and existing infrastructure might weigh on them.  I am hardly an expert or even really an amateur :) here but that is my 2 cents reading up last night. 

I wonder if CHTR coupled with DISH might not be a bad option.  In the event that 5G starts to take off it seems there is a good chance DISH will benefit.
Title: Re: CHTR - Charter Communications
Post by: Liberty on November 29, 2017, 06:34:03 AM
Defend net neutrality, defend Internet!

https://www.eff.org/deeplinks/2017/11/today-and-every-day-we-fight-defend-open-internet

An argument that Title II might not have been the right way to go to protect net neutrality:

https://stratechery.com/2017/pro-neutrality-anti-title-ii/

https://stratechery.com/2017/light-touch-cable-and-dsl-the-broadband-tradeoff-the-importance-of-antitrust/
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on December 08, 2017, 08:13:33 AM
Defend net neutrality, defend Internet!

https://www.eff.org/deeplinks/2017/11/today-and-every-day-we-fight-defend-open-internet

An argument that Title II might not have been the right way to go to protect net neutrality:

https://stratechery.com/2017/pro-neutrality-anti-title-ii/

https://stratechery.com/2017/light-touch-cable-and-dsl-the-broadband-tradeoff-the-importance-of-antitrust/

Great thoughts.

Is there a corollary between bundling & un-bundling / regulating & de-regulating?

Where there's a will, there's a way (and John Malone is still kicking...)
Title: Re: CHTR - Charter Communications
Post by: Liberty on December 11, 2017, 07:13:24 AM
http://www.leveragedloan.com/amid-investor-appetite-loans-charter-communications-eyes-12-3b-refinancing-package/

Looks like they're lowering further their cost of debt..
Title: Re: CHTR - Charter Communications
Post by: muscleman on December 11, 2017, 09:27:22 PM
http://www.leveragedloan.com/amid-investor-appetite-loans-charter-communications-eyes-12-3b-refinancing-package/

Looks like they're lowering further their cost of debt..


Thank you for the note. L+200 for a 8 year loan is really cheap, and it is rated as BBB+? What a joke.  :D
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on December 13, 2017, 07:14:38 AM
I'm having trouble keeping up & some stuff is dropping below the fold so nother bump...
Title: Re: CHTR - Charter Communications
Post by: Liberty on December 20, 2017, 09:31:04 AM
https://www.bloomberg.com/news/articles/2017-12-20/cable-tv-s-password-sharing-crackdown-is-coming
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on December 20, 2017, 09:47:21 AM
https://www.bloomberg.com/news/articles/2017-12-20/cable-tv-s-password-sharing-crackdown-is-coming

Good!

NetFlix is like $0.40 a day.

I'm willing to bet these same service thieves regularly make vapid gestures to Sally Strothers whiny entreaties.
Title: Re: CHTR - Charter Communications
Post by: fareastwarriors on December 20, 2017, 10:19:52 AM
https://www.bloomberg.com/news/articles/2017-12-20/cable-tv-s-password-sharing-crackdown-is-coming

Good!

NetFlix is like $0.40 a day.

I'm willing to bet these same service thieves regularly make vapid gestures to Sally Strothers whiny entreaties.

10 streams? Crazy. Maybe limit it to 2 streams max for the "basic" account.
Title: Re: CHTR - Charter Communications
Post by: Liberty on December 20, 2017, 10:26:28 AM
https://www.bloomberg.com/news/articles/2017-12-20/cable-tv-s-password-sharing-crackdown-is-coming

Good!

NetFlix is like $0.40 a day.

I'm willing to bet these same service thieves regularly make vapid gestures to Sally Strothers whiny entreaties.

10 streams? Crazy. Maybe limit it to 2 streams max for the "basic" account.

"The CEO has said that one unidentified channel owner had 30,000 simultaneous streams from a single account."
Title: Re: CHTR - Charter Communications
Post by: Liberty on December 20, 2017, 10:31:45 AM
Also, bringing DOSCIS 3.1 to NYC and six markets:

https://www.fiercecable.com/cable/charter-officially-announces-expansion-docsis-3-1-into-new-york-6-other-markets

Quote
The 1 Gbps services will come with a 35 Mbps upload speed and be priced at $105 a month. The minimum speed in the deployed regions will increase to 200 Mbps.
Title: Re: CHTR - Charter Communications
Post by: rogermunibond on December 20, 2017, 10:41:56 AM
https://www.bloomberg.com/news/articles/2017-12-20/cable-tv-s-password-sharing-crackdown-is-coming

Very interesting - let's see if subs start to go up on all services both linear and OTT.
Title: Re: CHTR - Charter Communications
Post by: CLM5 on December 21, 2017, 10:51:58 AM
Question for anyone who understands Charter better than I do....

Recently started digging into Charter, and I've been trying to understand where the differences come in between Charter and Comcast. Most of the thesis resolves around the consolidation of the cable industry, and Charter closing the margin gaps between them and comcast, who are at least close in scale. After digging into the numbers, there was something that stood out to me as not making sense.... as far as customer relationships go, comcast and charter are in the same ballpark. 28k for comcast at end of 2016 versus 26k for charter at end of 2016. Now, video makes much higher revenue per customer than HSD does, so it makes sense that Comcast has much higher revenue than Charter, because they have a much higher proportionality of video customers. But the impression I get from most people who have done deep dive analysis into Charter is that Video is currently only around a breakeven segment, while HSD is supposed to be much higher margins, driving even higher in the future due to the switch to all-digital.

So if Charter is the company made up of much more HSD customers proportionally, and HSD is a much better business when compared with video, then why is it that Comcast's margins are so superior to Charter? Is it simply because Comcast has so much more scale in video, so their video segment is actually profitable because their massive revenues can offset the ever increasing programming costs? Still, to me this would seem to counteract the argument that HSD is so much better of a business than video (obviously ignoring the fact that video is dying a slow death) in terms of margin at least. However, if we take into account the fact that video is dying (i.e. Comcast slowly losing their scale, programming costs becoming unwieldy) and the fact that Charter is proportionally more weighted towards HSD, would that not point towards the conclusion that someday in the future, it would be reasonable to assume Charter would surpass Comcast in ebitda margin? Whether or not that margin is higher or lower than it is today is debatable, but it seems charter is better positioned in terms of segment concentration.

Edit: Thoughts are getting a bit jumbled here, but I guess what I'm trying to say is that I see what people are saying about how video is a bad industry if you have no scale. Pretty much every player outside of comcast is screwed in terms of cable video. But comcast has so much scale, they they are able to offset those programming costs, and to me, this is where I see most of the margin advantage comcast has over charter coming from. Not necessarily because they are better operators, but because their video has more scale. And most of the charter theses seem to revolve around charters margins closing the gap on comcast (and most analysis revolves around HSD obviously), but absent the scale in video, is this reasonable/possible? I don't see much difference in Charter/Comcast numbers in terms of HSD and that's what the thesis relies upon.
Title: Re: CHTR - Charter Communications
Post by: Liberty on December 21, 2017, 11:18:38 AM
Comcast is a better operator than legacy TWC, and than legacy CHTR before Rutledge came around. Part of the story is a turnaround/optimization, with going all-digital, simplifying the products/pricing, going triple play and quad play to reduce churn/costly transactions/maintenance, etc.
Title: Re: CHTR - Charter Communications
Post by: CLM5 on December 21, 2017, 11:35:43 AM
My point is - I get that people are saying that, but I'm not seeing it in the numbers. All I'm seeing is a scale advantage in video for comcast over charter.
Title: Re: CHTR - Charter Communications
Post by: Liberty on December 21, 2017, 12:02:52 PM
My point is - I get that people are saying that, but I'm not seeing it in the numbers. All I'm seeing is a scale advantage in video for comcast over charter.

"Right now Comcast earns about $375 of EBITDA per home passed and spends about $133 in cap ex per home passed. Comcast’s operating margin and EBITDA margin for the past quarter were 25.11% and 40.4% respectively. Comcast also generated $151.19 per month in revenue per customer.

By contrast Charter is generating only about $285 in EBITDA per home passed and spending about $148 in cap ex. EBITDA margins for Charter are around 35% for the past six months and operating margins were just 9.7% (due to high legacy depreciation charges). Charter also only generates $109.77 of monthly revenue per customer."

https://seekingalpha.com/article/4112178-charter-great-potential-fully-valued
Title: Re: CHTR - Charter Communications
Post by: CLM5 on December 21, 2017, 01:51:32 PM
The capex from charter is absolutely elevated, on that I agree. Although from what I understand, that seems to be transitory in nature. But it terms of EBITDA per passing, that directly relates to what I was trying to say above. Because of comcast's scale in video, they're at a 48% gross margin for video. Charter is at a 41% gross margin for video. I believe this makes up a majority of the discrepancy between the EBITDA per passing, not the fact that comcast is a better operator. That's pure scale. The capex is a fair point, but I don't think EBITDA per passing is. It seems to me that's purely a function of scale and the proportionality of the segments. Although Charter's service charges seem to be extremely disproportionately high to me as well, which doesn't make sense.... I would think video would create more service charges than HSD, so maybe that could be a result of comcast being a better operator on that front. Still though, the numbers to me don't seem to be pointing to comcast being radically better operators like I've been told.
Title: Re: CHTR - Charter Communications
Post by: marazul on December 21, 2017, 03:11:31 PM
The delta between Charter and Comcast EBITDA margins has more to with non-video opex per customer than anything else. Rutledge has invested in personnel (insourcing call centers, service, etc), pushing sales, moving analog subscribers to digital, etc. This will accelerate growth but depress margins at the same time. Eventually, growth will slow down and opex will come down as well, resulting in higher margins...I think eventually Charter will ahve higher than 40% EBITDA margins (that is where Comcast is currently at. Reasons: B2B is a higher margin business and keeps growing at an accelerated pace, video keeps losing relevance and broadband is a higher margin line, once Charter achieves a higher level of penetration they will reduce costs (now they are focused on value creating growth, which is rational but affects margins, etc)...Conclusion, there is no structural reason for Comcast to have higher margins than Charter in perpetuity
Title: Re: CHTR - Charter Communications
Post by: Liberty on January 03, 2018, 12:25:45 PM
https://www.fiercecable.com/cable/charter-outlines-inside-out-wireless-strategy-urges-fcc-to-adopt-county-sized-geographic
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on January 04, 2018, 08:52:57 AM
https://www.fiercecable.com/cable/charter-outlines-inside-out-wireless-strategy-urges-fcc-to-adopt-county-sized-geographic

Nice (I never would have been interested except that I just read Cable Cowboy a month ago.)

This is an oldie from the same source:

https://www.fiercewireless.com/tech/fcc-votes-to-adopt-new-3-5-ghz-spectrum-sharing-plan-for-innovation-band

---

What do you think Masa is doing with $S?

Here's an old TMF writeup that goes against what I was thinking re: spectrum for $S.

https://www.fool.com/investing/general/2015/10/04/sprint-doesnt-need-more-spectrum-it-needs-this-ins.aspx

Are they cooking something up with DIS or is the Hulu thing a fluke?
Title: Re: CHTR - Charter Communications
Post by: BG2008 on January 04, 2018, 10:09:26 AM
Nice (I never would have been interested except that I just read Cable Cowboy a month ago.)

Same here, that book was so eye opening
Title: Re: CHTR - Charter Communications
Post by: BG2008 on January 23, 2018, 09:34:42 AM
Has there been any updates on Charter's share buyback?
Title: Re: CHTR - Charter Communications
Post by: Liberty on January 23, 2018, 09:57:36 AM
Has there been any updates on Charter's share buyback?

I haven't done the calc based on the BHN disclosure. I'm just waiting for Q4 to come out, that'll be in there. Wouldn't be surprised if they did a substantial amount during Q4 with the lower stock price.
Title: Re: CHTR - Charter Communications
Post by: BG2008 on March 01, 2018, 10:42:06 PM
During the three months ended December 31, 2017, Charter purchased approximately 13.5 million shares of Charter Class A common stock and Charter Holdings common units for approximately $4.7 billion. - Bought back shares at $348

For the year ended December 31, 2017, Charter purchased approximately 38.2 million shares of Charter Class A common stock and Charter Holdings common units for approximately $13.2 billion. - Bought back shares at $345

As of Dec 31, 2017 - 238.5mm shares outstanding implies a $81bn MC plus $70.2 bn of debt for a TEV of $151bn.  2017 Actual EBITDA is $15.3 bn, Q4 run rate EBITDA is $16.0 bn.  So the TEV/EBITDA is 9.87x and 9.44x respectively.  Debt/EBITDA is 4.6x and 4.4x respectively.   

This company is cannibalizing itself in real time.  Shares trade at less than buyback prices. 

Title: Re: CHTR - Charter Communications
Post by: BG2008 on March 02, 2018, 10:42:17 AM
During the three months ended December 31, 2017, Charter purchased approximately 13.5 million shares of Charter Class A common stock and Charter Holdings common units for approximately $4.7 billion. - Bought back shares at $348

For the year ended December 31, 2017, Charter purchased approximately 38.2 million shares of Charter Class A common stock and Charter Holdings common units for approximately $13.2 billion. - Bought back shares at $345

As of Dec 31, 2017 - 238.5mm shares outstanding implies a $81bn MC plus $70.2 bn of debt for a TEV of $151bn.  2017 Actual EBITDA is $15.3 bn, Q4 run rate EBITDA is $16.0 bn.  So the TEV/EBITDA is 9.87x and 9.44x respectively.  Debt/EBITDA is 4.6x and 4.4x respectively.   

This company is cannibalizing itself in real time.  Shares trade at less than buyback prices.

Apologies, the share counts are much higher than 238.5mm as there are an additional 31.7mm partner units and convertible preferred stocks.  So the fully diluted S/O is closer to 274mm.  This implies a MC of $91.2 bn Plus $70.2bn of debt equates to $161.2 which prices CHTR at roughly 10.1x EV/EBITDA run rate and 10.5x TTM EBITDA.  The thesis of Rutledge and Malone buying back an ungodly amount of shares is still relevant.   
Title: Re: CHTR - Charter Communications
Post by: marazul on March 02, 2018, 10:59:14 AM
Just wanted to add that Charter will likely buyback less stock in 2018 compared to 2017...Leverage is currently close to 4.5x which is near the high end of the range they feel comfortable. FCF generation won´t be significant in 2018 due to high levels of capex...management has already mentioned that the pace of repurchases will slow down
Title: Re: CHTR - Charter Communications
Post by: BG2008 on March 02, 2018, 01:19:50 PM
I read somewhere that in the M&A projections, they had projected $19.5 bn of EBITDA in 2019. I need to find the source.  On that forward metric the current debt/EBITDA is about 3.5x.  I wonder if Malone has an opinion on skating to where the puck is when it comes to debt/EBITDA ratio.  Using a 4.0x DEBT/EBIDA ratio, this would imply another $9-10 bn of buyback via debt increases in the next 2 years and perhaps another $8-10 bn of buyback via FCF.  Still put us in the range of $17-20bn of buyback on a $93bn EV. 

If we think $19.5 bn is the right 2019 EBITDA, then in two years, this could look like $93bn less $17-20bn + $78bn of debt = $154-157bn of EV vs $19.5bn of EBITDA or 7.9x EV/EBITDA in 2 years.  More importantly, the MC becomes about 3.9x EBITDA which would imply higher upside upon further deleveraging etc.  Certainly, these figures are much less than the $13.2 bn they spent this year.  It seems going forward the max run rate of buyback is $8-10bn a year. 

I love cannibalism when it comes to companies.     
Title: Re: CHTR - Charter Communications
Post by: marazul on March 02, 2018, 03:07:20 PM
The problem is that they are running behind the proxy numbers for various reasons, so most likely they won't be able to hit those numbers in 2019...besides, the move into mobile will add costs, which will rsult in even lower cash flow figures...I agree with you on the direction of the company though
Title: Re: CHTR - Charter Communications
Post by: walkie518 on March 20, 2018, 04:09:28 PM
Unless someone can correct me, it seems as though Charter is very attractive here?

Increasing capex for mobile initiative plus reduction of debt might be the impetus for downward pressure on the stock?  Mgmt is simply buying less shares back than last year too?

This doesn't seem to be a reason to sell, but to build a bigger position? 

Of course, the floor is not defined, but does anyone have a feel for how sustainable the $11B cash from operations may be?
Title: Re: CHTR - Charter Communications
Post by: marazul on March 20, 2018, 04:30:27 PM
Think cash flows are very sustainable, market is probably looking at some of the following:

-Rising rates are significant negatives for infrastructure assets given the amount of debt employed and the recurring nature of cash flows

-As you mentioned, push into mobile and continued elevated capex will delay the growth in fcf

-HSD growth is slowing down as penetration increases, this will put pressure on growth

-Other threats include video going to OTT and fixed wireless/5g
Title: Re: CHTR - Charter Communications
Post by: walkie518 on March 23, 2018, 01:26:46 PM
Charter is building the scale needed to do it the right way. 

Charter's pricing is good and the company is developing a mobile business to improve customer retention as well as aid in the transition to 5G. 

I can't help but accumulate shares here...

Title: Re: CHTR - Charter Communications
Post by: bonkers on March 23, 2018, 03:39:08 PM
I'm in fact little surprised that they seem to be so much behind proxy numbers. The business should be predictable, management capable, and the proxy was published not too long time ago. I would also guess they did not have an incentive to overstate the projections. But now both cash flow is weaker and capex higher!  :o

I still bet they can increase their FCF, but for me there's a large spread between min and max case. Does anyone have some practical way to go about forecasting the next few years out?
Title: Re: CHTR - Charter Communications
Post by: marazul on March 23, 2018, 03:43:10 PM
The transaction closed more than 6 months later than they originally thought. This delayed the integration, investment, etc...so it will take longer than expected...also market is a bit worse than in 2015-2016...video has declined at a faster pace than expected and ATT has been a bit aggresive with the buildouts
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on March 23, 2018, 05:22:20 PM
Unless someone can correct me, it seems as though Charter is very attractive here?

Increasing capex for mobile initiative plus reduction of debt might be the impetus for downward pressure on the stock?  Mgmt is simply buying less shares back than last year too?

This doesn't seem to be a reason to sell, but to build a bigger position? 

Of course, the floor is not defined, but does anyone have a feel for how sustainable the $11B cash from operations may be?

Higher interest rates are  the likely reason for downwards pressure. Relatively speaking, VHTR actually had held up very well, way better than CMCSA, despite CMCSA having less leverage.
Title: Re: CHTR - Charter Communications
Post by: Liberty on March 24, 2018, 06:10:52 AM
Malone ran his levered cable model at much higher interest rates for decades, I don't think the currently historically still very low rates will be a problem. Charter had some M&A premium and every time those expectations deflate a bit, a bunch of M&A focused HFs probably move on...
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on March 24, 2018, 06:37:01 AM
Maybe we should ask what makes for a prudent vs an inprudent asset financed with leverage?

1. The rates should be fixed as long as possible at a low rate.
2. The asset side - the business - must have ability to grow prices above the rate of inflation (studies show cable companies can raise prices inflation + some positive amount)
3. The leverage ratio overall should not be totally imprudent.
4. Refinancing risk should be eyed in relation to possible cash-flows a few years out.
5. Business should not be in decline or have a risk of being in decline.

However volatility is higher no matter what because perception of debt differs from reality of debt. So these assets could very well dip much lower than other stocks along the way. I think if you will invest in stocks that use internal leverage, your own personal leverage - if any - should be very strictly controlled. If you invest in stocks that use no leverage - or float, you can afford perhaps a little more leverage yourself. However I am forewarned by what Buffett said that even Berkshire can go down 50% and they have float, permanent, zero cost leverage...so borrower beware!
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on March 24, 2018, 04:42:50 PM
Malone ran his levered cable model at much higher interest rates for decades, I don't think the currently historically still very low rates will be a problem. Charter had some M&A premium and every time those expectations deflate a bit, a bunch of M&A focused HFs probably move on...

I am guessing that Malone purchased and valued cable assets at lower EBITDA multiples back then when interest rates were higher.I also think that the price increases taper out and are lower than they used to be. just my guess, I have not looked at historical numbers closely.  Cable systems do have competition in most areas. Where I live, FIOS for example eats their lunch.
Title: Re: CHTR - Charter Communications
Post by: Liberty on March 25, 2018, 11:11:05 AM
Malone ran his levered cable model at much higher interest rates for decades, I don't think the currently historically still very low rates will be a problem. Charter had some M&A premium and every time those expectations deflate a bit, a bunch of M&A focused HFs probably move on...

I am guessing that Malone purchased and valued cable assets at lower EBITDA multiples back then when interest rates were higher.I also think that the price increases taper out and are lower than they used to be. just my guess, I have not looked at historical numbers closely.  Cable systems do have competition in most areas. Where I live, FIOS for example eats their lunch.

There are many variables. He bought the assets at lower multiples, but they were also much smaller and less developed (scale is the most valuable thing in cable), as he was doing a roll up of the industry...

Rutledge said that his whole footprint can pretty inexpensively get to a gig, and has a path to 10 gigs of bandwidth. Fiber is competitive but much much more expensive, and so the ROI for overbuilds doesn't make much sense.
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on March 25, 2018, 04:58:03 PM
Quote
utledge said that his whole footprint can pretty inexpensively get to a gig, and has a path to 10 gigs of bandwidth. Fiber is competitive but much much more expensive, and so the ROI for overbuilds doesn't make much sense.

I have got. FIOS Gigbit and cable can’t touch it. I actually tried it and switched it toi cable for a while l because they gave me a good offer with 250Mbit, but the issue is not speed, it is ping and packet losses. I ditched cable fairly quickly.

Fiber, where it is available  has high market shares and houses when sold listing the availability as a plus. I think it is also getting cheaper to get fiber to the house.
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on March 25, 2018, 05:16:22 PM
I have Charter's 100 Mbps Spectrum internet service in Southern California, and so far never had any problems with ping or packet losses. I have been very happy with the service.

Regarding the cost of connecting homes with fiber, I would point out that both Verizon and Google had abandoned their over-build FFTH plans as they realized that ROI was quite poor. Verizon unloaded their FIOS business in CTF regions (California, Texas and Florida) to Frontier, and Frontier is having a hell of a time getting decent return from these properties.
Title: Re: CHTR - Charter Communications
Post by: jgyetzer on March 25, 2018, 06:41:48 PM
Has anyone listened to any of the recent Tucows conference calls?  They claim they make back their investment in FTTH in two years with a subscribing customer and expect 20-50% uptake over time.  That translates to a pretty good ROI.  They make it sound like they manage to complete the install at a lower cost than other fiber builds.  Maybe they are able to take advantage of smaller markets where they have an advantage that the national providers find too small, but I wonder why large scale fiber build couldn’t replicate their process.
Title: Re: CHTR - Charter Communications
Post by: WayWardCloud on March 25, 2018, 07:08:43 PM
Sure they could but why would they?
It seems to me that there's already a very expensive infrastructure laid down in the ground (cable) that will easily be upgraded to 1G speeds within a few years, then for a very reasonable additional cost per home can go up to 10G if need be. The average broadband speed today in the US is only ~70Mbps and most people barely ever use the full extend of their bandwidth (or are even aware of what that means). I don't see the incentive for any company to start over from scratch laying down fiber optics to the home everywhere just so they might have an edge in 50 years, when most households will actually feel a need for speeds >10G... We're barely starting to see people migrating from copper DSL to cable for bandwidth reasons.
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on March 25, 2018, 07:38:17 PM
Fiber to the home used to cost $3000 when Verizon did their buildout, but this has dropped to below $1000/ home (LBTYA mentioned £650 for example). Some of cost is cost/ home fixed, some of it is discretionary when customer actually orders it.

I would imagine that getting $80/month of high margin business with a $1000 upfront investment is reasonable  ROI, because based on what I have seen, the uptake of reasonably priced FTTH is quite high.

I had FTTH first (50MPS first) then switched to cable (200MBPS) and then switched back to FIOS(1GPS). At that point, Played an online game and when I switched  from the slow 50MPS to cable, I noticed increased lag. I investigated with a ping tracer they hater were ping spikes and packet losses, which I had not seen before even with slower nominal  data speed. I was extremely happen when gigabit FIOS was offered and didn’t look back since. The nominal data speeds mean very little when you game or even stream and have ping spikes and packet losses, which depend on you local network, what your neighbors are doing etc because bandwidth is always shared to some extend with cable.

FTTH get rid of these issues and that it why I is superior.  This will become very obvious when people start to stream video music on circus devices at the same time.
Title: Re: CHTR - Charter Communications
Post by: Liberty on March 26, 2018, 06:45:40 AM
Quote
utledge said that his whole footprint can pretty inexpensively get to a gig, and has a path to 10 gigs of bandwidth. Fiber is competitive but much much more expensive, and so the ROI for overbuilds doesn't make much sense.

I have got. FIOS Gigbit and cable can’t touch it. I actually tried it and switched it toi cable for a while l because they gave me a good offer with 250Mbit, but the issue is not speed, it is ping and packet losses. I ditched cable fairly quickly.

Fiber, where it is available  has high market shares and houses when sold listing the availability as a plus. I think it is also getting cheaper to get fiber to the house.

Fiber is great. Cable has tons of fiber up to local nodes too. The point is, building new fiber where it doesn't already exist, especially in areas that aren't super densely populated, is VERY expensive. Anything where you have to dig trenches and deal with permits and such, and get new wires to houses will be expensive. If you had to re-build a cable network from the ground up today it would be astronomically expensive too. Over most of Charter footprint, overbuilding fiber doesn't make much sense, especially since most people don't even know what latency or packet losses are (guessing you're a gamer). Even Google has found Google Fiber harder than they expected...
Title: Re: CHTR - Charter Communications
Post by: Liberty on March 26, 2018, 06:47:38 AM
Fiber to the home used to cost $3000 when Verizon did their buildout, but this has dropped to below $1000/ home (LBTYA mentioned £650 for example). Some of cost is cost/ home fixed, some of it is discretionary when customer actually orders

These costs cited don't mean much because they'll vary a lot depending on where you are (population density, regulations, labor costs, etc). Fiber in rural alabama won't cost the same per passing as in Hong Kong.

Extending fiber to somewhere that already has it is one thing, bringing it to somewhere that doesn't is another, etc.
Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on March 26, 2018, 07:38:45 AM
Fiber to the home used to cost $3000 when Verizon did their buildout, but this has dropped to below $1000/ home (LBTYA mentioned £650 for example). Some of cost is cost/ home fixed, some of it is discretionary when customer actually orders

These costs cited don't mean much because they'll vary a lot depending on where you are (population density, regulations, labor costs, etc). Fiber in rural alabama won't cost the same per passing as in Hong Kong.

And also GBP 650 is the incremental cost to connect to Virgin Media's already existing Fiber backbone in the UK across more dense areas.

Here's a nice breakdown of DSL vs. Fiber vs. Cable..

https://broadbandnow.com/report/dsl-vs-cable-vs-fiber/
Title: Re: CHTR - Charter Communications
Post by: Jurgis on March 26, 2018, 08:52:39 AM
I had FTTH first (50MPS first) then switched to cable (200MBPS) and then switched back to FIOS(1GPS). At that point, Played an online game and when I switched  from the slow 50MPS to cable, I noticed increased lag. I investigated with a ping tracer they hater were ping spikes and packet losses, which I had not seen before even with slower nominal  data speed. I was extremely happen when gigabit FIOS was offered and didn’t look back since. The nominal data speeds mean very little when you game or even stream and have ping spikes and packet losses, which depend on you local network, what your neighbors are doing etc because bandwidth is always shared to some extend with cable.

FTTH get rid of these issues and that it why I is superior.  This will become very obvious when people start to stream video music on circus devices at the same time.

I doubt that your packet losses and ping spikes are due to neighbors sharing the network and/or inherent cable (vs FIOS) issues. I'm pretty sure it's due to either the infrastructure the company has locally or losses on physical cable or possibly even connection to backbone (I've even had one game where the issue was backbone to another backbone connection that was being crapped by whatever the backbone interconnect politics was playing at the time). IMO and from what I've heard all of these can occur with FIOS too, so it's somewhat a crapshoot what you gonna get in specific location/specific companies/etc. Best bet is to have a house that has multiple providers and test all. And even then the quality may change in couple months (for who-knows-what reasons).

However, I can't prove any of the above, so FWIW. 8)
Title: Re: CHTR - Charter Communications
Post by: Liberty on March 26, 2018, 08:54:24 AM
I had FTTH first (50MPS first) then switched to cable (200MBPS) and then switched back to FIOS(1GPS). At that point, Played an online game and when I switched  from the slow 50MPS to cable, I noticed increased lag. I investigated with a ping tracer they hater were ping spikes and packet losses, which I had not seen before even with slower nominal  data speed. I was extremely happen when gigabit FIOS was offered and didn’t look back since. The nominal data speeds mean very little when you game or even stream and have ping spikes and packet losses, which depend on you local network, what your neighbors are doing etc because bandwidth is always shared to some extend with cable.

FTTH get rid of these issues and that it why I is superior.  This will become very obvious when people start to stream video music on circus devices at the same time.

I doubt that your packet losses and ping spikes are due to neighbors sharing the network and/or inherent cable (vs FIOS) issues. I'm pretty sure it's due to either the infrastructure the company has locally or losses on physical cable or possibly even connection to backbone (I've even had one game where the issue was backbone to another backbone connection that was being crapped by whatever the backbone interconnect politics was playing at the time). IMO and from what I've heard all of these can occur with FIOS too, so it's somewhat a crapshoot what you gonna get in specific location/specific companies/etc. Best bet is to have a house that has multiple providers and test all. And even then the quality may change in couple months (for who-knows-what reasons).

However, I can't prove any of the above, so FWIW. 8)

First question I'd ask if he was on wifi or on a wired connection...
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on March 26, 2018, 10:04:31 AM
Quote
First question I'd ask if he was on wifi or on a wired connection...

Good question.

Also, why on earth would anyone need 1 Gbps connection to home?

Title: Re: CHTR - Charter Communications
Post by: Spekulatius on March 26, 2018, 12:10:07 PM
Because I can get 1 Gig and it’s not that pricey

Jurgis is correct that some of the issues appeared to be backbone related ( some local nodes in Long Island) but again, it’s the providers job to get this right.

It was also played on wireless on a mobile device. But then again, I had the Verizon router and the cable companies router, but then again, it is the providers job to get the hardware right. My pingtracet indicated that wireless wasn’t the issue though.

When on cable internet, I even had issues with Netflix or Amauon video streams jamming up. Again YMMV but in my comparison test, Fios performed better. Small dataset, I know.
Title: Re: CHTR - Charter Communications
Post by: Liberty on March 26, 2018, 12:28:25 PM
Because I can get 1 Gig and it’s not that pricy.

Jurgis is correct that some of the issues appeared to be backbone related ( some local nodes in Long Island) but again, it’s the providers job to get this right.

It was also played on wireless on a mobile device. But then again, I had the Verizon router and the cable companies router, but then again, it is the providers job to get the hardware right. My pingtracet indicated that wireless wasn’t the issue though.

When on cable internet, I even had issues with Netflix or Amauon video streams jamming up. Again YMMV but in my comparison test, Fios performed better. Small dataset, I know.

Ok. Glad it fixed your problem. Whatever fixes it for you was the right thing to do, I suppose, but with this context, it pretty much has nothing to do about cable vs fiber as technologies.
Title: Re: CHTR - Charter Communications
Post by: vince on March 27, 2018, 07:27:34 AM
anyone hear anything lately that may have caused the price to drop this much? not complaining, i'm buying more.  i do wish tho that they would be able to buy more stock back at these levels
Title: Re: CHTR - Charter Communications
Post by: atbed on March 27, 2018, 01:28:06 PM
BAML came out with a note on VZ this week. They were very bullish on 5G wireless broadband which may be the cause of weakness on CHTR stock this week. Their general opinion is that wireless broadband will be a viable #2, but they don't expect an impact on cable/fiber until 2020.

anyone hear anything lately that may have caused the price to drop this much? not complaining, i'm buying more.  i do wish tho that they would be able to buy more stock back at these levels
Title: Re: CHTR - Charter Communications
Post by: vince on March 27, 2018, 03:49:17 PM
Thanks atbed
Title: Re: CHTR - Charter Communications
Post by: vince on March 28, 2018, 04:09:34 PM
so charter trading for 84 billion.  buy it thru lbrda and its 78 billion.  buy it thru gliba for 70 billion.  ebitda for 2018 should be 16 billion.  normal capex at 15% on 42 billion revenue equals 6.5 billion.  interest about 3.5 billion.  no cash taxes, fcf 6 billion.  pretty good multiple whichever vehicle u choose.  now lets see 4 years out.  with 4 years of 5% ebitda growth (mgmt thinks high single or low double digit growth but trying to see value if operating environment is tougher) we get 20 billion ebitda, 13 billion ebit, 8.5 billion ebt (we borrowed another 25 billion to keep leverage ratio constant).  for sure they will have found a way to push cash taxes back further.  so fcf for next 4 years (4.5, 5.5, 7.5, 8.5) equals 26 billion (i still used elevated capex).  so we have 50 billion with debt and fcf to allocate.  lets assume all on buybacks (which is conservative cause an acquisition will probably add more value).  at an average of 450 dollars a share we can buy back 110 million shares.  not good at figuring out options but lets assume we lose 20 million shares back to mgmt, we will have 185 million left outstanding and about 45 dollars of fcf per share.  a 15 multiple on fcf seems rational, brings us to almost 700 a share.  even a multiple of 10, using pretty conservative numbers thru-out gives us 450, very good in this low interest rate , high priced environment.  full disclosure, i have 50 percent of my net worth in this idea.
Title: Re: CHTR - Charter Communications
Post by: BG2008 on March 28, 2018, 04:52:44 PM
so charter trading for 84 billion.  buy it thru lbrda and its 78 billion.  buy it thru gliba for 70 billion.  ebitda for 2018 should be 16 billion.  normal capex at 15% on 42 billion revenue equals 6.5 billion.  interest about 3.5 billion.  no cash taxes, fcf 6 billion.  pretty good multiple whichever vehicle u choose.  now lets see 4 years out.  with 4 years of 5% ebitda growth (mgmt thinks high single or low double digit growth but trying to see value if operating environment is tougher) we get 20 billion ebitda, 13 billion ebit, 8.5 billion ebt (we borrowed another 25 billion to keep leverage ratio constant).  for sure they will have found a way to push cash taxes back further.  so fcf for next 4 years (4.5, 5.5, 7.5, 8.5) equals 26 billion (i still used elevated capex).  so we have 50 billion with debt and fcf to allocate.  lets assume all on buybacks (which is conservative cause an acquisition will probably add more value).  at an average of 450 dollars a share we can buy back 110 million shares.  not good at figuring out options but lets assume we lose 20 million shares back to mgmt, we will have 185 million left outstanding and about 45 dollars of fcf per share.  a 15 multiple on fcf seems rational, brings us to almost 700 a share.  even a multiple of 10, using pretty conservative numbers thru-out gives us 450, very good in this low interest rate , high priced environment.  full disclosure, i have 50 percent of my net worth in this idea.

What vehicles is in that 50%? CHTR, GLIBA, etc
Title: Re: CHTR - Charter Communications
Post by: vince on March 28, 2018, 05:20:31 PM
all 3
Title: Re: CHTR - Charter Communications
Post by: BG2008 on March 28, 2018, 07:35:48 PM
Care to disclose further allocations and the logic behind it? Thanks.
Title: Re: CHTR - Charter Communications
Post by: vince on March 29, 2018, 07:37:48 AM
when you ask about further allocations, you mean to other companies? and logic behind the heavy concentration?
Title: Re: CHTR - Charter Communications
Post by: vince on March 29, 2018, 08:19:15 AM
allison transmission, trading at 5.5 billion.  average fcf over last 4-5 years is 500 million, should be between 550-600 million this year.  so we are starting with a 10 percent yield and that 10 percent is free to distribute, not needed to grow along with nominal gdp.  my experience shows that when you start with a 10 percent yield (or will reach it within a couple years with a high probability, like chtr), in a reasonably good business with sustainable earning power you are going to do well.  obviously if u start with a 10% yield and the business earnings grow with gdp u have a 15% return (10% yield plus 5-6% nominal growth) with no multiple expansion. (this assumes mgmt doesnt like burning our retained earnings on dumb allocations and is potentially conservative cause at these multiples, if mgmt buys back lots of stock we will actually be getting more than a dollar of market value for every dollar retained and therefore a bump to that initial 10% yield).  and u are starting at the low end of price to earnings multiples so much better chance you will get multiple expansion, which means an excellent return.  for this to work, the business must have low-negative working capital needs (payables and accrued expenses greater than sum of inventory and receivables) and maintenance capex (call the company) equal to or less than depreciation. (or else the 5-6 percent growth will consume some of the 10 percent starting yield).  back to allison... they have a 60% worldwide share of teir endmarkets in fully automatic transmissions for med-large sized trucks (think fire trucks, refuse, school buses, motorhomes). penetration in north america is 80%, in China and other large emerging economies its 5%. they check the box on the 10% fcf yield.  doesnt look like an outlier cause its been 5 years of that same level of fcf.  will continue this in another post cause we have to still  assess their likelihood of 5-6 percent nominal growth and im out of space
Title: Re: CHTR - Charter Communications
Post by: vince on March 29, 2018, 09:15:41 AM
my apologies, forgot i was on chtr board.  i will copy and paste the alsn writeup and finish it under allisons board for those who want to see it
Title: Re: CHTR - Charter Communications
Post by: Jurgis on March 29, 2018, 10:15:52 AM
when you ask about further allocations, you mean to other companies? and logic behind the heavy concentration?

BG2008 might be asking in what percentages do you split your position between CHTR/LBRDA/GLIBA.
Title: Re: CHTR - Charter Communications
Post by: vince on March 29, 2018, 10:27:39 AM
Hi Jurgis,

Its a little complicated because of timing.  at first it was mostly lbrda because of the shares i was given in spinoff from liberty and the rights to buy more at 20 percent discount.  acquired about a third of chtr exposure thru lbrda at 45 bucks.  then bought about a third directly in chtr at 190, i wanted to own some directly just in case.  more recently, the last third, been buying lvnta (gliba) cause i want more chtr but i want it at cheapest price possible.  in addition i have bought and sold some lbrda profitably and also some long dated conservatively striked chtr calls.

Vince
Title: Re: CHTR - Charter Communications
Post by: vince on March 29, 2018, 05:12:28 PM
Jurgis and BG2008,

what do u guys think about chtr, the cable industry and my valuation?
Title: Re: CHTR - Charter Communications
Post by: Jurgis on March 30, 2018, 07:02:15 AM
I hold LBRDA and GLIBA shares. I don't really have much to say about valuation.
Title: Re: CHTR - Charter Communications
Post by: walkie518 on March 30, 2018, 07:31:05 AM
Jurgis and BG2008,

what do u guys think about chtr, the cable industry and my valuation?

Charter is evolving.  Adding mobile is no small feat.

Charter's MVNO w/Verizon should prove fruitful, but we also find that on the 20% of Charter's new customers' mobile usage (according to the company 80% is over wifi/Charter's own pipes today), is beholden to Verizon's network. 

I bet Verizon squeezes if Charter is successful?

Does Charter build, buy, or lease towers to overcome reliance on its MVNO?  Does Charter make a bid for Sprint?  Does a bid for Sprint ruin its relationship w/Verizon? 

Studies have shown that quad-plays at scale can reduce costs by 40%.  It's more likely that Comcast sees this 40% before Charter and Charter should be able to learn a lot from Comcast's new offerings.  Charter should be better as a result?

It might be that customers don't sign up for quad-plays without significant financial incentives?  How close does the price for a charter phone need to be to charter's cost to get this done the right way?  Does Charter need to take a loss on mobile and video to gain scale?

Charter is about building value.  Maybe I'm wrong and I should be thinking about how Charter can reinvest to build a better tomorrow for shareholders? 
Title: Re: CHTR - Charter Communications
Post by: vince on March 30, 2018, 09:48:41 AM
Hey Walkie,

lots of good points on wireless but not a material part of my valuation.  Dont really know how verizon squeezes them, they have a mvno agreement.  my understanding is our mvno usage based costs will be minimal because most of bits on wifi anyway.  in addition, it is not going to be a material profit source when viewed as a sole business,  but will lower churn (which would be material).  in my mind, if it is successful, it will drive consolidation on terms favaorable to cable.  but i have to admit i havent spent lots of time on the wireless opportunity.  if it disappeared tomorrow it wouldnt change my valuation
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 04, 2018, 07:31:19 AM
https://www.prnewswire.com/news-releases/charter-comcast-and-cox-to-form-new-group-to-sell-national-advanced-advertising-solutions-300624134.html
Title: Re: CHTR - Charter Communications
Post by: walkie518 on April 04, 2018, 09:09:39 AM
Hey Walkie,

lots of good points on wireless but not a material part of my valuation.  Dont really know how verizon squeezes them, they have a mvno agreement.  my understanding is our mvno usage based costs will be minimal because most of bits on wifi anyway.  in addition, it is not going to be a material profit source when viewed as a sole business,  but will lower churn (which would be material).  in my mind, if it is successful, it will drive consolidation on terms favaorable to cable.  but i have to admit i havent spent lots of time on the wireless opportunity.  if it disappeared tomorrow it wouldnt change my valuation

I don't know how others on this forum feel, but convergence and its synergies at (better) scale are key parts to my Charter thesis. 

Spectrum serves my office, which pays double for nearly the same service I have at home.  Spectrum has been moving business from annual to month/month contracts with teaser rates. 

What happens when Spectrum wants to lock-in pricing?  What happens when Spectrum wants to hike prices by 10%?  They will certainly get it, but is this short-term thinking?

How hard will it be when business customers have broadband and mobile devices with Spectrum (voice and video being less important) to leave?  What happens to those month/month agreements and how much additional revenues will be generated?  How well does Charter reduce churn with these offerings?

The MVNO with Verizon will juice cash flow b/c the pipes are the same, but new revenue is funneled to Charter instead of Verizon.  It's likely Charter undercuts Verizon's pricing, but I speculate that over time they come in line. 

On the other hand, building the infrastructure that Charter already has for 5G seems like a waste for many wireless carriers?  Maybe there will be increasing numbers of these kinds of agreements among the other cable providers. 

In the least, the next few years will be very interesting for cable and wireless companies. 

Title: Re: CHTR - Charter Communications
Post by: walkie518 on April 04, 2018, 05:28:20 PM
Charter prices $2.5B in debt to roll over Time Warner Cable notes https://seekingalpha.com/news/3343745?source=ansh $CHTR

Clear positive...
Title: Re: CHTR - Charter Communications
Post by: BG2008 on April 04, 2018, 07:24:30 PM
$800mm of 20 year debt at slightly higher yield than 5.375% and $1.7bn of 30 year debt at slight higher than 5.75% replacing $2b in 6.75% due 2018.  Wow. 
Title: Re: CHTR - Charter Communications
Post by: gokou3 on April 04, 2018, 08:25:25 PM
I find it interesting that the TWC yields fluctuate so much over a short span around the GFC..
Title: Re: CHTR - Charter Communications
Post by: BG2008 on April 04, 2018, 10:22:53 PM
I find it interesting that the TWC yields fluctuate so much over a short span around the GFC..

I think late 2008 and early 2009 were peak pessimism.  Capital market were essentially closed. 
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on April 05, 2018, 03:59:45 AM
I find it interesting that the TWC yields fluctuate so much over a short span around the GFC..

These times were crazy. You could by lower investment grade bonds for mid teens yields, if you looked around. Also, the financing side is one of the issues with Malone, he runs hothead entities he controls with fairly high leverage and not very “creditor friendly” with this assets shifting around and deals. Few people care now, but when credit gets tight, the remaining bond buyers will, IMO.
Title: Re: CHTR - Charter Communications
Post by: atbed on April 14, 2018, 02:44:53 PM
I had some massive problems with our phone service with one of the cable guys this week. Every time we lose cable internet service, we lose home phone service. I'm not picking on CHTR here specifically (just choosing to post here), because it probably applies to all cable providers.

IMO VOIP phone service through one of the cable providers is a complete rip-off. We are in the process of portering over our phone number from a cable provider to google voice (with a pit stop through T-Mobile). Combining phone/internet just seems like a marketing play to juice pricing.

Not sure how material this is. But curious what other board members think.
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on April 14, 2018, 03:24:02 PM
I had some massive problems with our phone service with one of the cable guys this week. Every time we lose cable internet service, we lose home phone service. I'm not picking on CHTR here specifically (just choosing to post here), because it probably applies to all cable providers.

IMO VOIP phone service through one of the cable providers is a complete rip-off. We are in the process of portering over our phone number from a cable provider to google voice (with a pit stop through T-Mobile). Combining phone/internet just seems like a marketing play to juice pricing.

Not sure how material this is. But curious what other board members think.

You don’t really pay for phone it’s cable providers, in my case the tripple play offering (with phone) was cheaper than the double play after the rebates. We never used the phone since we were happy with Ooma and didn’t feel like changing.
Title: Re: CHTR - Charter Communications
Post by: vince on April 15, 2018, 03:19:31 PM
Chtr being offered at very good prices on CURRENT ebitda where current ebitda is not representative of potential future ebitda.  Said another way, current multiple is basically a good cash on cash return with no growth.  That is a very nice margin of safety IMO.  Wish they had more capacity to take out more equity at these prices
Title: Re: CHTR - Charter Communications
Post by: vince on April 15, 2018, 03:23:12 PM
Not seeing sec filing with Advance Newhouse leads me to believe AN is not selling anymore shares back to Chtr
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on April 15, 2018, 03:49:23 PM
Chtr being offered at very good prices on CURRENT ebitda where current ebitda is not representative of potential future ebitda.  Said another way, current multiple is basically a good cash on cash return with no growth.  That is a very nice margin of safety IMO.  Wish they had more capacity to take out more equity at these prices

What makes you believe that CHTR current EBITDA is not representative of future EBITDA? I expect to see mid single digit EBITDA, Sam than with CMCSA, which trades at lower multiples. I prefer CMCSA because of lower leverage and lower valuation at this point.
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 15, 2018, 06:35:05 PM
Chtr being offered at very good prices on CURRENT ebitda where current ebitda is not representative of potential future ebitda.  Said another way, current multiple is basically a good cash on cash return with no growth.  That is a very nice margin of safety IMO.  Wish they had more capacity to take out more equity at these prices

What makes you believe that CHTR current EBITDA is not representative to future EBITDA? I expect to see mid single digit EBITDA, Sam than with CMCSA, which trades at lower multiples. I prefer CMCSA because of lower leverage and lower valuation at this point.

Because they are going through a huge integration/transition process that is depressing margins and likely growth.
Title: Re: CHTR - Charter Communications
Post by: vince on April 15, 2018, 06:56:11 PM
 Ebitda growth rate with legacy charter footprint was high single to low double digits once the upgrades to the plant were largely complete and the product and pricing strategy was implemented.  I think it's also important to consider the fact that business was performing very much in line with what management was predicting.  Mr Rutledge was confident that once the plant was upgraded consumers would see that the cable product is superior to satellite and chtr would begin to claw back video customers.  Without the drag from video losses and conservative estimates of further broadband penetration you could see very good growth. Mgmt is now predicting, with this latest integration, even better relative performance all factors considered.  And they are backing up that conviction buying back large chuncks of equity at 350 a share.  As the integration recently passed the halfway mark, the biggest risks are behind them and value is increasing as the stock heads south.  Remember, 3 different companies were looking to acquire them and it was publicly stated that there was an offer for 540.  Of course the market overreacts to some lumpiness in their results, which by the way mgmt stated was obviously going to happen due to the sheer scale and complexity of the acquisition.  Lets assume though that you are right and they get mid single digit ebitda growth (which is what I use anyway for valuation), the returns will be fantastic.  And that was my original point.  But I also think one could pencil in 10 percent (or more) growth for the next few years (what I meant when I said not representative of potential future ebitda) which obviously greatly enhances returns.  The cfo was asked at recent conference whether he still felt low double digit growth was in the cards.  He said absolutely and that he is more confident now than ever.
Title: Re: CHTR - Charter Communications
Post by: vince on April 15, 2018, 07:02:26 PM
Thanks Liberty for saying basically what I said with my long post which for some reason I think was a waste of time in terms of getting anywhere with the extra effort.
Title: Re: CHTR - Charter Communications
Post by: dutchman on April 16, 2018, 07:04:24 AM
Can someone direct me to some material which explains why 5g and cord cutting isn't a threat to charter. The market seems to be freaking out of over this, and therein lies the opportunity i guess.  I get that they'll just keep raising the price of broadband if ppl cord cut, and 5g requires many more cells where cable can maybe play a role. Trying to understand the conviction that many of you, whom I respect, have.
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 16, 2018, 07:16:37 AM
Can someone direct me to some material which explains why 5g and cord cutting isn't a threat to charter. The market seems to be freaking out of over this, and therein lies the opportunity i guess.  I get that they'll just keep raising the price of broadband if ppl cord cut, and 5g requires many more cells where cable can maybe play a role. Trying to understand the conviction that many of you, whom I respect, have.

Rutledge touches on this in his March 5 presentation. I suggest you check out his comments.
Title: Re: CHTR - Charter Communications
Post by: Gamecock-YT on April 16, 2018, 03:30:05 PM
Not seeing sec filing with Advance Newhouse leads me to believe AN is not selling anymore shares back to Chtr
a day early

https://www.sec.gov/Archives/edgar/data/914545/000089924318010177/xslF345X03/doc4.xml
Title: Re: CHTR - Charter Communications
Post by: LongTermView on April 18, 2018, 07:38:45 PM
Charter breaks down capex on page 48 of the 2017 10-K:
Quote
in millions:
$3,385 Customer premise equipment [CPE] (a)
$2,007 Scalable infrastructure (b)
$1,176 Line extensions (c)
   $572 Upgrade/rebuild (d)
$1,541 Support capital (e)
--------
$8,681 Total capital expenditures

(a) Customer premise equipment includes costs incurred at the customer residence to secure new customers and revenue generating units. It also includes customer installation costs and customer premise equipment (e.g., set-top boxes and cable modems).
(b) Scalable infrastructure includes costs not related to customer premise equipment, to secure growth of new customers and revenue generating units, or provide service enhancements (e.g., headend equipment).
(c) Line extensions include network costs associated with entering new service areas (e.g., fiber/coaxial cable, amplifiers, electronic equipment, make-ready and design engineering).
(d) Upgrade/rebuild includes costs to modify or replace existing fiber/coaxial cable networks, including betterments.
(e) Support capital includes costs associated with the replacement or enhancement of non-network assets due to technological and physical obsolescence (e.g., non-network equipment, land, buildings and vehicles).

We know 2017 and 2018 are heavy in terms of growth capex due to the all-digital initiative. What is the breakdown between maintenance capex and growth capex for the above?

A similar question was answered in October 2014 (http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/charter-communications/msg195301/#msg195301) but I'd like to continue exploring the blurry areas:
What is your best guess on maintenance capex. 1.5 billion$? 700m$ interest? that is 5-2.2 = 2.8bn$. But I assume some taxes? another 800m$ in taxes, so about 2bn$ in FCF. then a 12x multiple on 92m shares is 260$ of value. Possibly 280-290$ with that greatland stake?

what is an appropriate cash flow multiple on these things. Since they do have a nice moat, and possibly some growth? So if you say a 15x multiple, then it gets interesting.

Look over the conference call transcripts.  Management provides some information on free cash flow, and how much of that is customer premise equipment (CPE).

Whenever Charter signs up a new customer, it needs to send out a set-top box that it will rent to that customer.  The CPE is growth capex.
Some of Charter's capex may get a little blurry.  If it improves its Internet infrastructure, some of that is maintenance and some of that would be growth.  It's hard to say what the right split is.  But in any case, Charter management doesn't break that out.
Title: Re: CHTR - Charter Communications
Post by: Astrea on April 19, 2018, 02:06:03 AM
Just to get back to Dutchman re cord cutting/5G risks. These are my high level thoughts:

The disruption caused to the cable video distribution model is real but cable operators still own the infrastructure (i.e. the pipe to the home) over which both traditional and over-the-top video services are delivered to customers. In other words, cable owns the toll road and gets to set the toll charge and so there should be other ways it can make up for what it loses in video. Bundle economics should also continue to make sense and offer value to customers and I think that with the proliferation of OTT services in addition to linear TV, cable can continue to be an aggregator of content and offer value to the customer through bundling even if what's in the bundle changes.

No one has all the answers re 5G but as the technology sorts out, cable seems to lend itself to answering the questions better than others. Cable’s existing architecture comprises many of the building-blocks needed to compete in a 5G world, including an existing fibre network for backhaul and high capacity wireless connectivity in homes and businesses (i.e. wifi). By contrast, wireless carriers will almost certainly need to build dense physical networks (fibre and small cell radios) down from the macro-cell towers into the neighbourhoods with all the cost, time and overbuild risk that carries. On that basis, 5G may well be more of an opportunity for cable than a threat. At least that's what Charter is saying. VZ is saying that existing cable assets aren't quite good enough for a 5G world and so they are building their own networks in selected markets. How much of that is tactical ahead of some form of convergence with cable, I don't know.

It's worth following what's happening in Europe with the JV between Vodafone and Liberty Global. If that works out, then it further validates the merits of convergence between wireless and wireline operators. That JV valued Liberty Global's cable assets at around 11x EBITDA if I recall correctly.
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on April 19, 2018, 04:03:05 AM
I agree convergence and consolidation between wireline and wireless is the most likely path going forward. Verizon has already a dense fiber network in the Northeast and ATT in CA, some areas in the Midwest and South, but each operator needs to cover most of the US to give the consumer the best experience.

It seems that in the mid term future, wireless and fiber will start to supplement and compete with each other.
Title: Re: CHTR - Charter Communications
Post by: vince on April 19, 2018, 12:51:00 PM
Imo, wireless and wireline will consolidate on valuations favorable to cable based on Zig-Vod merger and the various wireless companies looking at Chtr assets.  Things could change so not a time for overconfidence but its no secret the wireline currently has the advantage and Malone is the last person that will allow that "advantage value" to be transferred without being compensated.  In fact, one of my worries is that he wont take a fair price when offered which could come back to bite later.  I would have taken 540, (assuming currency was decent, or even if lots of it was cash) because that 540 NOW in my hands is worth a good bit more in 3-4 years.  By turning it down now (not saying that he did) you must be very confident of 700-800 or more in 3-4 years, again assuming currency was solid.
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 19, 2018, 01:03:12 PM
Imo, wireless and wireline will consolidate on valuations favorable to cable based on Zig-Vod merger and the various wireless companies looking at Chtr assets.  Things could change so not a time for overconfidence but its no secret the wireline currently has the advantage and Malone is the last person that will allow that "advantage value" to be transferred without being compensated.  In fact, one of my worries is that he wont take a fair price when offered which could come back to bite later.  I would have taken 540, (assuming currency was decent, or even if lots of it was cash) because that 540 NOW in my hands is worth a good bit more in 3-4 years.  By turning it down now (not saying that he did) you must be very confident of 700-800 or more in 3-4 years, again assuming currency was solid.

Malone mentioned this in interview with Faber about the offer (which I don't think was confirmed as 540, but as "something with a 5 in front" or something like that), and Malone basically said "I didn't see a check for that amount, show me the check". Meaning that he didn't want to swap CHTR stock for Softbank stock or whatever and be stuck with it with no control, repeating his AT&T mistake.
Title: Re: CHTR - Charter Communications
Post by: Happy on April 20, 2018, 03:05:59 AM
In the interview, it sounded to me as if part of the offer was in Sprint shares and Son wanted to value those shares significantly above their market value for the deal (because he considered them undervalued). That's obviously a far more dubious proposition than receiving $540 in cash.
Title: Re: CHTR - Charter Communications
Post by: vince on April 20, 2018, 08:34:53 AM
I agree with both of you, I saw the interview.  But whats your thoughts on first part of my post?
Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on April 20, 2018, 08:36:54 AM
Hey here's a dumb question...

I hear this line a lot from Malone and MIke Fries...combining a wireline network and a wireless network has huge synergies.  Why does it have huge synergies? I get the churn reduction argument.  But from a pure cost synergy perspective? 
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 20, 2018, 08:43:40 AM
I agree with both of you, I saw the interview.  But whats your thoughts on first part of my post?

It seems to be the direction of things, but who knows how it'll play out... What matters most is that CHTR doesn't need to merge with anyone to get to quad play, and 80% of the bits going through phones are already going through its wifi, not through cell towers, so it's easier for them to absorb that extra capacity than for the wireless players to try to duplicate the capacity of cable.
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 20, 2018, 08:46:05 AM
Hey here's a dumb question...

I hear this line a lot from Malone and MIke Fries...combining a wireline network and a wireless network has huge synergies.  Why does it have huge synergies? I get the churn reduction argument.  But from a pure cost synergy perspective?

As you mentioned, reducing churn has big benefits, but there are also synergies when it comes to the backhaul capacity, the billing and customer service systems, etc.

Imagine a cable network and a wireless company side by side, operating independently. If you made a venn diagram of everything they need to operate, there'd be a fair bit over overlap. That's where the synergies would come from.

But cable is a better business than wireless, so it all depends at what cost you can make it happen. So far CHTR seems to be going the MVNO route, which reduces risk.
Title: Re: CHTR - Charter Communications
Post by: Astrea on April 20, 2018, 08:58:01 AM
Yes Liberty Global commentary on VOD/Ziggo JV was that the two biggest benefits were higher NPS and lower churn. The cost synergies were 1/4 IT savings, 1/4 redundancies and 1/2 included marketing + sales and termination of rented fibre. I think they discussed this on the Liberty Global Q3 2017 call.
Title: Re: CHTR - Charter Communications
Post by: gokou3 on April 20, 2018, 09:03:44 AM
Perhaps another dumb question, but why would someone like VZ willing to play game with the cable guys by letting them run a MVNO on its network?  Is it due to regulatory requirement that they need to open up their network?  Otherwise, I don't see it beneficial to cultivate a potential competitor for a little incremental revenue.
Title: Re: CHTR - Charter Communications
Post by: walkie518 on April 20, 2018, 09:14:27 AM
Perhaps another dumb question, but why would someone like VZ willing to play game with the cable guys by letting them run a MVNO on its network?  Is it due to regulatory requirement that they need to open up their network?  Otherwise, I don't see it beneficial to cultivate a potential competitor for a little incremental revenue.

VZ's customers use Charter's and Comcast's pipes, Routeledge claims 80% of mobile activity occurs over wifi and therefore cable. 

Master/slave!
Title: Re: CHTR - Charter Communications
Post by: mbreject on April 20, 2018, 09:53:04 AM
Perhaps another dumb question, but why would someone like VZ willing to play game with the cable guys by letting them run a MVNO on its network?  Is it due to regulatory requirement that they need to open up their network?  Otherwise, I don't see it beneficial to cultivate a potential competitor for a little incremental revenue.

I think it's more about them not leaving money on the table. The customers of MVNOs aren't going to be the same as Verizon's, so it's not like they're losing business. Their networks just get more congested though they do limit MVNOs.
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on April 20, 2018, 10:00:14 AM
Quote
Perhaps another dumb question, but why would someone like VZ willing to play game with the cable guys by letting them run a MVNO on its network?  Is it due to regulatory requirement that they need to open up their network?  Otherwise, I don't see it beneficial to cultivate a potential competitor for a little incremental revenue.

Comcast & Time Warner Cable owned cellular spectrum in the past and they subsequently sold it to VZ. As a part of the deal, they also received the ability to offer MVNO using VZ network. So VZ is legally required to support Charter's (since Time Warner Cable is now part of Charter) and Comcast's MVNO plans.
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 20, 2018, 10:12:31 AM
Perhaps another dumb question, but why would someone like VZ willing to play game with the cable guys by letting them run a MVNO on its network?  Is it due to regulatory requirement that they need to open up their network?  Otherwise, I don't see it beneficial to cultivate a potential competitor for a little incremental revenue.

I don't remember how that deal came to exist, but TWC came with a perpetual MVNO deal with Verizon that they're now activating.

Fromt he point of view of the wireless company, MVNO deals can make sense because it just increases utilization on their mostly fixed cost assets, so it's probably at very high incremental margins.
Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on April 20, 2018, 10:49:02 AM
Yes Liberty Global commentary on VOD/Ziggo JV was that the two biggest benefits were higher NPS and lower churn. The cost synergies were 1/4 IT savings, 1/4 redundancies and 1/2 included marketing + sales and termination of rented fibre. I think they discussed this on the Liberty Global Q3 2017 call.

ok thanks. I listened to the call, but didn't quite catch that part.  Thanks.  the one I didn't think of is the termination of rented fibre. 
Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on April 20, 2018, 10:55:03 AM
Hey here's a dumb question...

I hear this line a lot from Malone and MIke Fries...combining a wireline network and a wireless network has huge synergies.  Why does it have huge synergies? I get the churn reduction argument.  But from a pure cost synergy perspective?

As you mentioned, reducing churn has big benefits, but there are also synergies when it comes to the backhaul capacity, the billing and customer service systems, etc.

Imagine a cable network and a wireless company side by side, operating independently. If you made a venn diagram of everything they need to operate, there'd be a fair bit over overlap. That's where the synergies would come from.

But cable is a better business than wireless, so it all depends at what cost you can make it happen. So far CHTR seems to be going the MVNO route, which reduces risk.

Yup.

 I get the billing and customer service, but you could then make the argument that you should merge netflix with a cable company or anything with a billing department and charter. In other words, merging SG&A costs isn't unique to wireless and cable.  But definitely the backhaul piece is.  I guess maybe the telcos stops leasing cell towers in  some instances because the footprint overlaps with a cable operator and they can simply plug cells to the cable backhaul.  I'm not an engineer but in my simple mind, this is maybe how it makes sense?  Not sure, which is why i asked the question.
Title: Re: CHTR - Charter Communications
Post by: walkie518 on April 20, 2018, 10:56:39 AM
this is wild ... maybe a merger would never be approved by the antitrust regulators, but this can happen

https://www.fiercecable.com/cable/comcast-and-charter-to-jointly-develop-common-mobile-operating-platform?mkt_tok=eyJpIjoiTmprMk5EZGlNRE00WW1ZMyIsInQiOiJsNHNLWXY3VHhySGhXTkFzeFloNmpFNWM1VzNXUkxvdVFRazZmSWtTQUlMVk04NjFjamd3em04RmZ5V25GS1FHZmIydHVubHlWQVZVYkY5VG1tYm1GNSt6ZWZwUkhLRzl6UTE1N1RDUWV6UnR4cCt1UW5BT3M1cDVHQXlvTU5xVyJ9&mrkid=60566399
Title: Re: CHTR - Charter Communications
Post by: BG2008 on April 20, 2018, 11:14:34 AM
this is wild ... maybe a merger would never be approved by the antitrust regulators, but this can happen

https://www.fiercecable.com/cable/comcast-and-charter-to-jointly-develop-common-mobile-operating-platform?mkt_tok=eyJpIjoiTmprMk5EZGlNRE00WW1ZMyIsInQiOiJsNHNLWXY3VHhySGhXTkFzeFloNmpFNWM1VzNXUkxvdVFRazZmSWtTQUlMVk04NjFjamd3em04RmZ5V25GS1FHZmIydHVubHlWQVZVYkY5VG1tYm1GNSt6ZWZwUkhLRzl6UTE1N1RDUWV6UnR4cCt1UW5BT3M1cDVHQXlvTU5xVyJ9&mrkid=60566399

Yes, this is wild.  The fact that CHTR and Comcast would work together is not surprising to me at all.  This is largely a function of having read Cable Cowboys.  Malone was a bit of a mentor to the Comcast guys, Robertsons?.  Malone talked about how cable and media companies tend to collaborate together against industries/companies they view as threats.  I think characteristics like this is what makes the cable business better than say the airlines (pre-merger).  It's a lot more clubby than a prisoners dilemma type of decision making. Clubby means higher returns on capital for shareholders.   
Title: Re: CHTR - Charter Communications
Post by: marazul on April 20, 2018, 11:19:33 AM
Yes, they cooperate because they don´t compete but own basically the same assets (just in different geographies). Makes perfect sense to work together to develop better products and reduce costs. On fixed-mobile convergence, it makes less sense in US vs. Holland (Ziggo-Vod), or other parts of Europe for example. In US, cable assets are not nationwide providers while mobile providers are...in Europe, Cable assets cover larger % of a country.
Title: Re: CHTR - Charter Communications
Post by: BG2008 on April 20, 2018, 11:37:13 AM
This is my little rant regarding my short thesis on CHTR on the "what are you buying today" thread

My CHTR thesis is something along the line of:

Some business' replacement value is very real and compounds over time.  This is typical of businesses that require a lot of blue collar construction labor, materials cost, political zoning, scale, and right-of-way.  One way of looking at CHTR is kind using a railroad analogy.  No one in their right mind today will go out and build another railroad.  It simply can't be done.  Railroads has structural advantage over trucks (although self-driving cars may erode or even usurp this advantage) due to lower cost.  You can't go through towns etc because they are not the wilderness anymore.  They are populated and you can't use eminent domain and get all the politics lined up to build a railroad.  My thought is that you can't do that with cable today either.  Imagine going to residents and say "I'm going to dig up your roads and bring in all this loud noise etc" to build a competing network"  Please give me permission to do it.  Also where do you find the labor?  Apparently we don't have tough blue collar guys left who knows how to work with their leathery hands.  We have a bunch of wimpy millenials these days.  They have no efficiency in digging ditches etc.  What this all implies is that as time goes on and populations get denser and more buildings get built and the roads gets traveled more, it becomes ever more difficult for people to go out and dig up roads and climb up poles and connect coaxial cables or lay down fiber optics.  This is a true case of a replacement cost being real, tangible, and compounding over time.  The 5G stuff that could be a threat, if I remember correctly from my "physics of waves" in college.  Basically, lower wavelength can't penetrate buildings unlike long radio waves.  So you need lots of little antennas and you need lots of power.  If you want to build it from scratch, how do you get access to buildings?  How do you get permission to mount stuff on buildings, light posts etc?  Where do the labor come from?  What if YOU ARE the cable company.  You have the access point already.  You are sending a tech out to repair something already.  I think these are overwhelming structural advantages that only compounds over time.  This implies price hikes over time.  If I learned anything about owning real estate in a land constraint location (NYC) is that if you're able to pass through 3% price increases a year and you leverage your assets the right way, everything else takes care of itself.   Rant over.   
Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on April 20, 2018, 01:07:41 PM
This is my little rant regarding my short thesis on CHTR on the "what are you buying today" thread

My CHTR thesis is something along the line of:

Some business' replacement value is very real and compounds over time.  This is typical of businesses that require a lot of blue collar construction labor, materials cost, political zoning, scale, and right-of-way.  One way of looking at CHTR is kind using a railroad analogy.  No one in their right mind today will go out and build another railroad.  It simply can't be done.  Railroads has structural advantage over trucks (although self-driving cars may erode or even usurp this advantage) due to lower cost.  You can't go through towns etc because they are not the wilderness anymore.  They are populated and you can't use eminent domain and get all the politics lined up to build a railroad.  My thought is that you can't do that with cable today either.  Imagine going to residents and say "I'm going to dig up your roads and bring in all this loud noise etc" to build a competing network"  Please give me permission to do it.  Also where do you find the labor?  Apparently we don't have tough blue collar guys left who knows how to work with their leathery hands.  We have a bunch of wimpy millenials these days.  They have no efficiency in digging ditches etc.  What this all implies is that as time goes on and populations get denser and more buildings get built and the roads gets traveled more, it becomes ever more difficult for people to go out and dig up roads and climb up poles and connect coaxial cables or lay down fiber optics.  This is a true case of a replacement cost being real, tangible, and compounding over time.  The 5G stuff that could be a threat, if I remember correctly from my "physics of waves" in college.  Basically, lower wavelength can't penetrate buildings unlike long radio waves.  So you need lots of little antennas and you need lots of power.  If you want to build it from scratch, how do you get access to buildings?  How do you get permission to mount stuff on buildings, light posts etc?  Where do the labor come from?  What if YOU ARE the cable company.  You have the access point already.  You are sending a tech out to repair something already.  I think these are overwhelming structural advantages that only compounds over time.  This implies price hikes over time.  If I learned anything about owning real estate in a land constraint location (NYC) is that if you're able to pass through 3% price increases a year and you leverage your assets the right way, everything else takes care of itself.   Rant over.   

1. I 100% agree with you.

2. I thought this was "your short thesis." 
Title: Re: CHTR - Charter Communications
Post by: BG2008 on April 20, 2018, 01:20:00 PM
This is my little rant regarding my short thesis on CHTR on the "what are you buying today" thread

My CHTR thesis is something along the line of:

Some business' replacement value is very real and compounds over time.  This is typical of businesses that require a lot of blue collar construction labor, materials cost, political zoning, scale, and right-of-way.  One way of looking at CHTR is kind using a railroad analogy.  No one in their right mind today will go out and build another railroad.  It simply can't be done.  Railroads has structural advantage over trucks (although self-driving cars may erode or even usurp this advantage) due to lower cost.  You can't go through towns etc because they are not the wilderness anymore.  They are populated and you can't use eminent domain and get all the politics lined up to build a railroad.  My thought is that you can't do that with cable today either.  Imagine going to residents and say "I'm going to dig up your roads and bring in all this loud noise etc" to build a competing network"  Please give me permission to do it.  Also where do you find the labor?  Apparently we don't have tough blue collar guys left who knows how to work with their leathery hands.  We have a bunch of wimpy millenials these days.  They have no efficiency in digging ditches etc.  What this all implies is that as time goes on and populations get denser and more buildings get built and the roads gets traveled more, it becomes ever more difficult for people to go out and dig up roads and climb up poles and connect coaxial cables or lay down fiber optics.  This is a true case of a replacement cost being real, tangible, and compounding over time.  The 5G stuff that could be a threat, if I remember correctly from my "physics of waves" in college.  Basically, lower wavelength can't penetrate buildings unlike long radio waves.  So you need lots of little antennas and you need lots of power.  If you want to build it from scratch, how do you get access to buildings?  How do you get permission to mount stuff on buildings, light posts etc?  Where do the labor come from?  What if YOU ARE the cable company.  You have the access point already.  You are sending a tech out to repair something already.  I think these are overwhelming structural advantages that only compounds over time.  This implies price hikes over time.  If I learned anything about owning real estate in a land constraint location (NYC) is that if you're able to pass through 3% price increases a year and you leverage your assets the right way, everything else takes care of itself.   Rant over.   

1. I 100% agree with you.

2. I thought this was "your short thesis."

Short as in length, haha
Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on April 20, 2018, 01:21:08 PM
This is my little rant regarding my short thesis on CHTR on the "what are you buying today" thread

My CHTR thesis is something along the line of:

Some business' replacement value is very real and compounds over time.  This is typical of businesses that require a lot of blue collar construction labor, materials cost, political zoning, scale, and right-of-way.  One way of looking at CHTR is kind using a railroad analogy.  No one in their right mind today will go out and build another railroad.  It simply can't be done.  Railroads has structural advantage over trucks (although self-driving cars may erode or even usurp this advantage) due to lower cost.  You can't go through towns etc because they are not the wilderness anymore.  They are populated and you can't use eminent domain and get all the politics lined up to build a railroad.  My thought is that you can't do that with cable today either.  Imagine going to residents and say "I'm going to dig up your roads and bring in all this loud noise etc" to build a competing network"  Please give me permission to do it.  Also where do you find the labor?  Apparently we don't have tough blue collar guys left who knows how to work with their leathery hands.  We have a bunch of wimpy millenials these days.  They have no efficiency in digging ditches etc.  What this all implies is that as time goes on and populations get denser and more buildings get built and the roads gets traveled more, it becomes ever more difficult for people to go out and dig up roads and climb up poles and connect coaxial cables or lay down fiber optics.  This is a true case of a replacement cost being real, tangible, and compounding over time.  The 5G stuff that could be a threat, if I remember correctly from my "physics of waves" in college.  Basically, lower wavelength can't penetrate buildings unlike long radio waves.  So you need lots of little antennas and you need lots of power.  If you want to build it from scratch, how do you get access to buildings?  How do you get permission to mount stuff on buildings, light posts etc?  Where do the labor come from?  What if YOU ARE the cable company.  You have the access point already.  You are sending a tech out to repair something already.  I think these are overwhelming structural advantages that only compounds over time.  This implies price hikes over time.  If I learned anything about owning real estate in a land constraint location (NYC) is that if you're able to pass through 3% price increases a year and you leverage your assets the right way, everything else takes care of itself.   Rant over.   

1. I 100% agree with you.

2. I thought this was "your short thesis."

Short as in length, haha

ah!
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 20, 2018, 06:23:19 PM
I thought the same thing because of the wording. I was expecting a twist at the end..
Title: Re: CHTR - Charter Communications
Post by: Jurgis on April 20, 2018, 10:10:58 PM
Dis why I never say "short writeup" or "short thesis" anymore.  8)
Title: Re: CHTR - Charter Communications
Post by: vince on April 21, 2018, 12:59:37 PM
I agree with both of you, I saw the interview.  But whats your thoughts on first part of my post?

It seems to be the direction of things, but who knows how it'll play out... What matters most is that CHTR doesn't need to merge with anyone to get to quad play, and 80% of the bits going through phones are already going through its wifi, not through cell towers, so it's easier for them to absorb that extra capacity than for the wireless players to try to duplicate the capacity of cable.

Well you never know exactly how the future unfolds but what you said in the rest of your post (basically supporting what I was referring to) makes it highly likely that it unfolds favorably in cables favor.  That dynamic, combined with Rutledge's operating abilities and Malone helping drive strategic direction in a monopoly like business with pricing power (hopefully they restrain themselves with pricing) just seems to me like a rare combination especially when the price is reasonable.  In fact, it looks to me like the plan could fall well short and still hold its current market value.  Can anyone please highlight any leaks that could sink this ship?
Title: Re: CHTR - Charter Communications
Post by: dutchman on April 21, 2018, 01:55:34 PM
"80% of the bits going through phones are already going through its wifi, not through cell towers, so it's easier for them to absorb that extra capacity than for the wireless players to try to duplicate the capacity of cable."

-- what does this mean?  Is the point that verizon would have to buy a charter in order to get to 5g?
Ive heard Malone say 5g is " impossible " without a terrestrial fiber network.  So isn't it inevitable that charter will be bought?  This has to happen right?   why would verizon et al pay to build charters network all over again? This is what i don't get.


Title: Re: CHTR - Charter Communications
Post by: Liberty on April 21, 2018, 03:18:13 PM
I think it was Rutledge who mentioned it a few times. Basically, when we think of mobile devices we might think of cell towers first, but 80% of the bits transferred to these devices come from WiFi, not cellular.

The other 20% are still very valuable because they allow complete mobility, but when it comes to backhaul infrastructure, there's more going through other pipes.
Title: Re: CHTR - Charter Communications
Post by: vince on April 21, 2018, 03:56:25 PM
But remember, the bits are higher over wifi cause people watch video on their phones when they are home...usually, and video passes more bits.  The fact that they are not able to monetize this traffic yet is significant but if measured in other ways I dont believe its as valuable as it seems.  At least it feels that way when I think it thru.
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 21, 2018, 04:16:30 PM
I think the point is that if wireless companies want to compete with cable with 5G, they're going to have to handle all these bits (mostly video), and that won't be easy on their infrastructure. They'd basically almost have to recreate a cable network, except that instead of terminating into homes with wifi, it would terminate into small 5G cells blanketing neighborhoods. 5G cells are almost closer to wifi than current cellular, based on what I know (higher speeds, but shorter range and a lot more trouble getting through obstacles, even trees and rain).
Title: Re: CHTR - Charter Communications
Post by: dutchman on April 22, 2018, 08:18:49 AM
This is probably a stupid question, but wouldn't it almost be less expensive for cable companies to band together and put up cellular towers to provide 5g themselves.

But i guess they can't because theyd have to buy spectrum from att Verizon!
Title: Re: CHTR - Charter Communications
Post by: vince on April 22, 2018, 09:01:09 AM
This is probably a stupid question, but wouldn't it almost be less expensive for cable companies to band together and put up cellular towers to provide 5g themselves.

But i guess they can't because theyd have to buy spectrum from att Verizon!

5G is basically just a wireless drop for that last bit of distance to the property.  You dont need wireless towers, and they wouldnt have to buy spectrum from VZ.   
Title: Re: CHTR - Charter Communications
Post by: DeepSouth on April 22, 2018, 11:08:02 AM
This is probably a stupid question, but wouldn't it almost be less expensive for cable companies to band together and put up cellular towers to provide 5g themselves.

But i guess they can't because theyd have to buy spectrum from att Verizon!

5G is basically just a wireless drop for that last bit of distance to the property.  You dont need wireless towers, and they wouldnt have to buy spectrum from VZ.

And it's nonsensical to try to build a portfolio of towers instead of leasing space from the tower cos.
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on April 22, 2018, 11:21:07 AM
This is probably a stupid question, but wouldn't it almost be less expensive for cable companies to band together and put up cellular towers to provide 5g themselves.

But i guess they can't because theyd have to buy spectrum from att Verizon!

5G is basically just a wireless drop for that last bit of distance to the property.  You dont need wireless towers, and they wouldnt have to buy spectrum from VZ.

So,  hat means that 5G would only work within CHTR  or any other service providers service areas?
Title: Re: CHTR - Charter Communications
Post by: vince on April 22, 2018, 06:48:17 PM
I dont completely understand your question.  It can work in Verizons service area if they have access to the fiber infrastructure that is necessary.  And it is my understanding that even with that access, it is just as, or more expensive to do wireless drops then to run the wireline. 
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 22, 2018, 07:03:19 PM
Anyone can get there, the question is more, how long is it going to take, how much is it going to cost, what kind of return are you going to get on your capital, and is it cheaper to buy someone who has what you want than to build.
Title: Re: CHTR - Charter Communications
Post by: Voodooking on April 27, 2018, 05:35:41 AM
So, I've been looking at Charter for a week or two now, thanks to VIC, MOI, and CoB&F (mostly Liberty's repeated mentions...  ;D), for bringing it to my attention.

I feel that I understand the strengths and weaknesses and I've read the annual reports and done lots of background research on the company and the management / board.

My question now is - How should I buy it?! I know I'm too late for Liberty Ventures, which seems to leave me with either investing in Charter Communications (CHTR) directly, or buying Liberty Broadband (LBRDA) in order to achieve a discount by buying the tracking company.

Is there still a discount to be had? What would people (mainly Liberty...  ;)) recommend at the moment? How can I work out the Charter-specific NAV of LBRDA in order to compare it with the LBRDA stock price?
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 27, 2018, 06:13:46 AM
CHTR Q1:

Quote
Key highlights:
• First quarter total residential and SMB customer relationships increased 261,000, compared to 355,000 during the first quarter of 2017, when excluding the impact of customer activity related to Legacy Bright House's seasonal customer plan in 2017.1
• As of March 31, 2018, Charter had 27.5 million total customer relationships and 52.5 million total PSUs.
• In the first quarter, total residential and SMB video, Internet and voice customers increased by 225,000, with Internet net additions of 362,000, video net losses of 112,000 and voice net losses of 25,000.
• First quarter revenues of $10.7 billion grew 4.9%, as compared to the prior year period, driven by residential revenue growth of 4.8%, commercial revenue growth of 5.3%, and advertising revenue growth of 5.6%.
• First quarter Adjusted EBITDA of $3.9 billion grew 6.5% year-over-year, and 6.8% when excluding 2018 mobile launch costs.
• Net income attributable to Charter shareholders totaled $168 million in the first quarter, compared to $155 million during the same period last year.
• First quarter capital expenditures totaled $2.2 billion compared to $1.6 billion during the first quarter of 2017, primarily driven by in-year timing differences and Charter's all-digital initiative. First quarter capital expenditures included $186 million of all-digital costs and $17 million of 2018 mobile launch costs.
• During the first quarter, Charter purchased approximately 2.0 million shares of Charter Class A common stock and Charter Holdings common units for approximately $683 million.
Title: Re: CHTR - Charter Communications
Post by: dutchman on April 27, 2018, 06:18:53 AM
Liberty, how do you feel about the numbers? I know this is your wheelhouse.
Title: Re: CHTR - Charter Communications
Post by: Gamecock-YT on April 27, 2018, 06:33:04 AM
Wow getting pummeled, down 14%
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 27, 2018, 06:48:01 AM
Liberty, how do you feel about the numbers? I know this is your wheelhouse.

Haven't had time to really look into it yet. I've been traveling so I've got like 7 different earnings to get through. At first glance it seems pretty solid. More video losses than usual, but that's going to move around.
Title: Re: CHTR - Charter Communications
Post by: chrispy on April 27, 2018, 07:02:03 AM
They gained more than expected internet users and lost more than expected video users.  Not the most surprising trend given the 5G thesis.
Title: Re: CHTR - Charter Communications
Post by: muscleman on April 27, 2018, 07:13:56 AM
I am pretty surprised by the 14% drop this morning. Market seems to really dislike its negative FCF which is what the market based its valuation on, just like SIRI and other Malone stocks.

For 5G to work, the mobile providers would have to work with CHTR and Comcast to get the data moving, right? 5G only connects from customer's phone to the tower, but if the tower doesn't have the capacity to move the data around, it won't be useful.
Title: Re: CHTR - Charter Communications
Post by: walkie518 on April 27, 2018, 07:34:35 AM
CHTR looks very cheap here, the sell-off appears unjustified and more the result of mgmt taking away the punchbowl

Small and medium business is improving, passings are up, increased residential relationships...net adds are up, revs are up 5%

The buybacks were done in the $340/sh range...while this will create value over time, the price is not as attractive as $270/sh
Title: Re: CHTR - Charter Communications
Post by: Voodooking on April 27, 2018, 07:40:28 AM
As per my post above, I was on the fence and looking to think more about CHTR / LBRDA over the weekend, with a view to initiating a position in either / both on Monday or Tuesday next week.

After seeing the earnings release and watching the stock drop minute by minute, I just bought the dip on both CHTR and LBRDA.

Hopefully I will not regret this decision and it has set me up with a nice base for compounding in the future!

Would still be interested to hear the opinions of others on the most efficient way to purchase this though...
Title: Re: CHTR - Charter Communications
Post by: no_free_lunch on April 27, 2018, 07:58:03 AM
CHTR looks very cheap here, the sell-off appears unjustified and more the result of mgmt taking away the punchbowl

Small and medium business is improving, passings are up, increased residential relationships...net adds are up, revs are up 5%

The buybacks were done in the $340/sh range...while this will create value over time, the price is not as attractive as $270/sh

It is probably foolish to question malone but is it really cheap?  $70B market cap, $70B st debt, $70B lt term = $210B EV.   EBITDA at around $16B correct?   So after the drop isn't EV/EBITDA 13-14? 
Title: Re: CHTR - Charter Communications
Post by: muscleman on April 27, 2018, 08:02:08 AM
CHTR looks very cheap here, the sell-off appears unjustified and more the result of mgmt taking away the punchbowl

Small and medium business is improving, passings are up, increased residential relationships...net adds are up, revs are up 5%

The buybacks were done in the $340/sh range...while this will create value over time, the price is not as attractive as $270/sh

It is probably foolish to question malone but is it really cheap?  $70B market cap, $70B st debt, $70B lt term = $210B EV.   EBITDA at around $16B correct?   So after the drop isn't EV/EBITDA 13-14?

Depends on which metric you use. FCF could be 1.1 bn per quarter if not more, so P/FCF seems ok.
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 27, 2018, 08:06:33 AM
CHTR looks very cheap here, the sell-off appears unjustified and more the result of mgmt taking away the punchbowl

Small and medium business is improving, passings are up, increased residential relationships...net adds are up, revs are up 5%

The buybacks were done in the $340/sh range...while this will create value over time, the price is not as attractive as $270/sh

It is probably foolish to question malone but is it really cheap?  $70B market cap, $70B st debt, $70B lt term = $210B EV.   EBITDA at around $16B correct?   So after the drop isn't EV/EBITDA 13-14?

It appears you're double-counting a lot of debt.
Title: Re: CHTR - Charter Communications
Post by: gokou3 on April 27, 2018, 08:09:09 AM
CHTR looks very cheap here, the sell-off appears unjustified and more the result of mgmt taking away the punchbowl

Small and medium business is improving, passings are up, increased residential relationships...net adds are up, revs are up 5%

The buybacks were done in the $340/sh range...while this will create value over time, the price is not as attractive as $270/sh

It is probably foolish to question malone but is it really cheap?  $70B market cap, $70B st debt, $70B lt term = $210B EV.   EBITDA at around $16B correct?   So after the drop isn't EV/EBITDA 13-14?

It appears you're double-counting a lot of debt.

Total debt is under $71B per today's release:

http://ir.charter.com/mobile.view?c=112298&v=203&d=1&id=2345269
Title: Re: CHTR - Charter Communications
Post by: no_free_lunch on April 27, 2018, 08:13:36 AM
You are correct, debt is only $70B.  The website I was using butchered their financials, I should have gone to the source.
Title: Re: CHTR - Charter Communications
Post by: walkie518 on April 27, 2018, 08:28:51 AM
This morning, I sold CHTR to lock in tax losses while buying Liberty Broadband to come back to CHTR in ~30 days and sell the Broadband position. 

Though I suppose one could trade LBRDA, LBRDK, and CHTR to manage tax losses and retain exposure...
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on April 27, 2018, 08:32:25 AM
CMCSA is cheaper though, although they own content and theme parks as well ( which are fine business, imo)?, so not totally comparable.

I added some CHTR as well and a bit more CMCSA. CHTR fall shows how little we know about whatever own, imo.
CMCSA has 40% EBITDA margins on cable compared to CHTR ~37%, so they do have some improvement potential.
Title: Re: CHTR - Charter Communications
Post by: Jurgis on April 27, 2018, 08:44:01 AM
My question now is - How should I buy it?! I know I'm too late for Liberty Ventures, which seems to leave me with either investing in Charter Communications (CHTR) directly, or buying Liberty Broadband (LBRDA) in order to achieve a discount by buying the tracking company.

Is there still a discount to be had? What would people (mainly Liberty...  ;)) recommend at the moment? How can I work out the Charter-specific NAV of LBRDA in order to compare it with the LBRDA stock price?

Why do you think you are late with Liberty Ventures? GLIBA is still buyable and some people argue that it has the largest discount.
You probably need to dig either this thread or Liberty (companies, not person ;)) threads for analysis of discount.

Disclaimer: I have GLIBA and LBRDA.
Title: Re: CHTR - Charter Communications
Post by: atbed on April 27, 2018, 08:50:27 AM
TTM free cash flow came in at 2.9B. But of course, they are investing to shift the entire base to digital... It doesn't look that cheap if you look at reported FCF, but maybe it is cheap if you are looking at a few years
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 27, 2018, 09:28:42 AM
TTM free cash flow came in at 2.9B. But of course, they are investing to shift the entire base to digital... It doesn't look that cheap if you look at reported FCF, but maybe it is cheap if you are looking at a few years

Yeah. If you're buying something to own for the long-term, what matters is the earning power over that period. TTM is an arbitrary period that might or might not be representative.

In this case, looking at the fact that three very large companies are being integrated together (and the biggest one was the one most in need of catching up) at the same time as they're moving to all-digital at the same time as they're launching a mobile product, I'd say that there's a lot of noise covering the real earning potential. As the CFO said, these things are not linear and there's going to be ups and downs (he said something like: If you look at the legacy Charter transition after this team took it over, it looks smooth if you are standing back, after it was done, but at the time, quarter to quarter, it wasn't. I think we're seeing the same thing).

Rutledge also mentioned that video has very little margins and that even if they're off by a million subs or whatever in their predictions, it's not material.
Title: Re: CHTR - Charter Communications
Post by: vince on April 27, 2018, 09:40:06 AM
CMCSA is cheaper though, although they own content and theme parks as well ( which are fine business, imo)?, so not totally comparable.

I added some CHTR as well and a bit more CMCSA. CHTR fall shows how little we know about whatever own, imo.
CMCSA has 40% EBITDA margins on cable compared to CHTR ~37%, so they do have some improvement potential.

Spek, just cause the price declined doesnt mean we know little about the position.  It was a fine qtr, 5%rev growth and 7% ebitda growth.  Current fcf is completely meaningless as a valuation tool because of all things Liberty just said.  We already know with confidence what fcf will look like when u derive it from ebitda when operations stabilize.  In addition, the operating metrics looked normal/good/expected so I dont see what the fuss is about, nor do I care as I was able to acquire another meaningfull amount at very good prices. 
Title: Re: CHTR - Charter Communications
Post by: aceskc on April 27, 2018, 09:47:21 AM
Indulge me guys for a minute...You mention video has lower margins than broadband, digging further along the same lines- as long as they are in the video business, the programming costs will sort of be a sunk cost, whether they have 16k residential PSU's or 15k or 10k.. Given that, they are now earning ~4.3B on 16.4k residential video PSU's in Q1 and ~3.7B on Internet  22.8k PSUs ,  so on an annual basis APRU per video user is $105 vs ARPU per internet user is $65 based on Q1 rates. And the former business is shrinking, while the internet business is growing.

Would love to hear your thoughts on why the shirnking video business is irrelevant or the thesis.
Title: Re: CHTR - Charter Communications
Post by: gokou3 on April 27, 2018, 09:48:57 AM
Adding to the above, I am attaching a financial forecast from Aug 2015 for the BHN/TWC transactions.  They are trailing a bit, in particular the capex being higher than foecasted, although this should be transient.  The forecast also didn't include their mobile initiative.  With steady EBITDA growth and tapering of capex after the system integration is complete, the FCF by 2019 will be quite impressive relative to its current EV.
Title: Re: CHTR - Charter Communications
Post by: cmlber on April 27, 2018, 09:50:13 AM
TTM free cash flow came in at 2.9B. But of course, they are investing to shift the entire base to digital... It doesn't look that cheap if you look at reported FCF, but maybe it is cheap if you are looking at a few years

Yeah. If you're buying something to own for the long-term, what matters is the earning power over that period. TTM is an arbitrary period that might or might not be representative.

In this case, looking at the fact that three very large companies are being integrated together (and the biggest one was the one most in need of catching up) at the same time as they're moving to all-digital at the same time as they're launching a mobile product, I'd say that there's a lot of noise covering the real earning potential. As the CFO said, these things are not linear and there's going to be ups and downs (he said something like: If you look at the legacy Charter transition after this team took it over, it looks smooth if you are standing back, after it was done, but at the time, quarter to quarter, it wasn't. I think we're seeing the same thing).

Rutledge also mentioned that video has very little margins and that even if they're off by a million subs or whatever in their predictions, it's not material.

In the past hasn't Rutledge been very critical of CABO's comments on video being an immaterial/unprofitable business?

If the video business is declining to zero profitability and this ultimately becomes a broadband business, why not own CABO at a higher EV/EBITDA multiple but in a footprint with no video margin left to shed, only 31% broadband penetration vs 48%, and where the cost to pass a home is substantially higher, i.e., long-run threats from 5G and over-builders is much less?  Your starting yield is lower, but the bulk of the value you're paying for is in the cash flows 10+ years out, what the competition in Jackson County, Mississippi looks like 10+ years out is a lot more predictable than what it looks like in most CHTR markets.
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 27, 2018, 09:53:09 AM
Adding to the above, I am attaching a financial forecast from Aug 2015 for the BHN/TWC transactions.  They are trailing a bit, in particular the capex being higher than foecasted, although this should be transient.  The forecast also didn't include their mobile initiative.  With steady EBITDA growth and tapering of capex after the system integration is complete, the FCF by 2019 will be quite impressive relative to its current EV.

The question on capex is, will the total amount of capex at the end of the transition be higher than originally forecasted (excluding the mobile stuff), or are they just spending it faster than was expected (in the end adding up to about the amount predicted)?

If they are, there could be nice surprises if capex intensity goes down faster than originally expected over the coming year...
Title: Re: CHTR - Charter Communications
Post by: dwy000 on April 27, 2018, 10:40:56 AM
While Rutledge is well known as one of the best operators, seeing the results come in this quarter reminds me of just how underappreciated Brian Roberts is as an operator at Comcast.  Despite a bigger base, the video losses were lower and the expense control impressive (3% programming cost increase vs 5.6% at Charter).  I also think they are so far ahead of everyone else in terms of getting in front of customer experience - the Xfinity boxes, home security, mobile, integration into content etc.

I own both but at these prices I like the long term future of CMCSA better.

Now I think the wild card will ultimately be mobile.  These 2 are converging fast and I can see Charter combining with a combined TMob/Sprint at some point in the next 2-3 years.  Not holding out for it but that would leave Comcast, Verizon, AT&T, etc. in tough position to respond.
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on April 27, 2018, 10:47:04 AM
I have just finished listening to the conf call. I think CABO saw the writing on the wall with respect to video business well before Charter & Rutledge (or Comcast for that matter). Rutledge said on the call that the number of video subs (whether they are off by a million or not) didn't matter that much given that there is not much margin in it, basically agreeing with CABO.

Having said that, hardly anyone invests in Charter today because they are attracted to the video distribution business. It is all about broadband business: consumer, SMB and enterprise. On this front, Charter is doing quite well. 6.5% EBITDA growth is nothing to sneeze at, especially given the levered equity model of Charter. There is also a silver lining to drop in video customers as the long term CPE Capex needs should go down dramatically as Charter shifts the video subs to app based OTT model which will drive up margins as we see in the case of CABO.

I agree with Liberty that current quarter FCF is meaningless until the integration of TWC and Brighthouse is completed.
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 27, 2018, 10:48:44 AM
While Rutledge is well known as one of the best operators, seeing the results come in this quarter reminds me of just how underappreciated Brian Roberts is as an operator at Comcast.  Despite a bigger base, the video losses were lower and the expense control impressive (3% programming cost increase vs 5.6% at Charter).  I also think they are so far ahead of everyone else in terms of getting in front of customer experience - the Xfinity boxes, home security, mobile, integration into content etc.

It's true that Roberts is good, but it's a bit of an apples to oranges (my fingers first wrote: "apples to organs", that works too) at this point, IMO. On the call they mentioned that a lot of what they're doing now is disruptive to the customer and that this can increase transactions and churn temporarily (swapping set top boxes, changing product packages (names, prices, features), consolidating billing systems, having new call centers phasing in, etc).

I think that maybe if Roberts was trying to integrate new businesses that were multiples of the size of what he was before, he'd probably be seeing some impact to his operating metrics too.

Quote
Having said that, hardly anyone invests in Charter today because they are attracted to the video distribution business. It is all about broadband business: consumer, SMB and enterprise.

It's not for nothing that Malone called his vehicle Liberty Broadband.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on April 27, 2018, 11:11:48 AM
Wasn't there an offer from SoftBank with Malone saying he wanted 500 a share? Maybe should have taken even 400? Lets hope the team is not committing that bias of being in love with their company to the point of thinking operating is always better than selling out. Still if nothing much has changed, today's discount looks mighty attractive for more open market purchases by SoftBank.
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 27, 2018, 11:21:09 AM
Wasn't there an offer from SoftBank with Malone saying he wanted 500 a share? Maybe should have taken even 400? Lets hope the team is not committing that bias of being in love with their company to the point of thinking operating is always better than selling out. Still if nothing much has changed, today's discount looks mighty attractive for more open market purchases by SoftBank.

Why would he have taken a lower amount, because the price is down right now? That's not how Malone thinks. Over the past decades, he's shown that his ability to be patient and focus on the long-term is quite high.

Besides, the offers weren't cash, and I don't think swapping CHTR for a bunch of probably Sprint or Softbank stock would've been that great a deal... You lose control of the strategic direction of the asset and you dilute it with a bunch of other stuff that might not do as well.

If you have something that you think can do well for years to come, you don't rush to sell it unless someone is willing to overpay a lot and with no strings attached to the currency (and taxes won't kill you). You don't get out of a vehicle that you like and control for a quick short term gain, because then you're stuck with a mountain of capital you have to redeploy, or you're stuck with someone else's equity that you have no say over and Malone is scarred by the AT&T debacle.

I think if Softbank crosses 5% they have to file, so that'll be interesting to keep an eye on.
Title: Re: CHTR - Charter Communications
Post by: atbed on April 27, 2018, 11:24:53 AM
Adding to the above, I am attaching a financial forecast from Aug 2015 for the BHN/TWC transactions.  They are trailing a bit, in particular the capex being higher than foecasted, although this should be transient.  The forecast also didn't include their mobile initiative.  With steady EBITDA growth and tapering of capex after the system integration is complete, the FCF by 2019 will be quite impressive relative to its current EV.

Hmm thanks for sharing. Very helpful.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on April 27, 2018, 11:54:30 AM
Right ,an investor can sell his or her shares at any price he feels. It hit a high of 400 so I guess if chatter of 500 was going around one could have gotten ahead of the curve. Anyway I see today more an opportunity than a trap until or unless more evidence to the contrary presents itself , mostly in the broadband mobile arena since I agree the other stuff is a legacy sideshow. Also there was an article that cable cos where historically able to (or allowed) to price ahead of inflation by a few points. Don't remember if that study was considering legacy video before broadband became a thing . Broadband is a strong monopoly as long as alternatives or pricing power doesn't slip . As for valuation, I don't think it's particularly below fair value. I know it's not an exact comparison but khc is trading 2 billion below chtr. Fcf for both companies is *roughly* the same plus minus. Debt is almost double at charter. Why ? Perhaps cause we give it semi monopoly status while Kraft is a weaker form of brand franchise in commodity foods. But how sure are we chtr will be a monopoly forever ? Technological disruption I see as the biggest risk since it's unlikely the government will hinder pricing power.
Growth rates may also differ. But given these variables I'd say both stocks are slightly undervalued. ..but one should have take the 350 to 400 gift I think with the thought of maybe buying in later.
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 27, 2018, 12:21:46 PM
Speaking of pricing power, charter has been taking a lot less price than the other big cablecos. The idea seems to be to try to get as much volume now as possible, go all-digital, in-source support, make the products better and more straightforward, go quad-play, and then once that's done and churn is super low, then they'll probably flex a bit more pricing. Playing the long term game...
Title: Re: CHTR - Charter Communications
Post by: CLM5 on April 27, 2018, 12:41:56 PM
First off, agree with a few others here that the market reaction today was far overblown. Why the market is obsessed with an almost-irrelevant segment of these cable companies, I'll never quite understand.

But I'd like to share a thought I was mulling over today.... at what point does Video become relevant again? Now, I have no idea what kind of leverage programming providers have over cable companies besides their content so this may be a moot point, but hear me out here. Given the steady state decline of video subscribers, how much longer can the slew of cable companies continue to operate video segments profitably? Considering even the companies with the largest scale are only seeing break-even margins at this point, I struggle to see how any of the smaller operators are going to stay in business given steady y-o-y subscriber decline and programming cost increase. I think 2 points are extremely relevant here - the first being that consolidation seems likely/necessary for the industry given scale will allow them to operate profitably for a far longer period of time. Pretty much everyone even remotely familiar with cable is aware of the consolidation taking place.

The second point, and the one I've been mulling over is, how much longer can the networks continue to be able to increase their programming costs every year? Eventually (and I think we're rapidly approaching this point), there will be no one left willing to pay for the programming costs if they can't do so profitably. Seems to be simple supply and demand in my eyes, unless networks have some other sort of leverage besides their content. When do we reach the point (either through consolidation or the smaller players exiting the market) where there's only 1 or 2 rational players left offering cable video, who can do so at an actual profit because they now have leverage over the networks (i.e. 1 or 2 melting ice cubes that actually generate significant cash)?  Seems to me that this could possibly be the direction that were headed considering I still think there will be a meaningful market for cable TV even 10 or 15 years in the future with the older crowd.

Or is it possible that this isn't a realistic outcome? Will cable providers continue to just provide cable video at breakeven, and eventually negative, margins simply to bundle it with their internet and provide a better value package? Is this something that anyone has heard cable management talk about? While I generally don't pay much attention to video because it currently represents almost none of the market cap of cable companies, this seems like it could represent a decent upside to 1 or 2 video companies, which would most likely be any one of comcast, charter, dish, or at&t.
Title: Re: CHTR - Charter Communications
Post by: wabuffo on April 27, 2018, 01:05:50 PM
Why the market is obsessed with an almost-irrelevant segment of these cable companies, I'll never quite understand.

Because video is only break-even on a fully allocated cost basis (but still profit accretive on a marginal cost basis), and these cablco's are heavily leveraged - that's why.  Why do you think Rutledge & Co. was defending video until today.

Do you really think the total company EBITDA is going to stay the same if all of the video revenues (and programming costs) go to zero?  Sure some fixed costs can be cut, but I don't think all of them can.   You can argue that cableco's will recover the remaining residual fixed costs via pricing on the internet portion - but that trip from A to B can only be made to happen slowly.  If it is forced to happen quickly - I guarantee you no one has modelled that scenario.

Look - I'm a CHTR shareholder and a Rutledge fan.  But I don't like the changing narrative about video from a CEO who is supposed to be a details-oriented operator with a strong command of the numbers.  That's a bit of a red-flag.

wabuffo
Title: Re: CHTR - Charter Communications
Post by: maybe4less on April 27, 2018, 01:13:34 PM
Indulge me guys for a minute...You mention video has lower margins than broadband, digging further along the same lines- as long as they are in the video business, the programming costs will sort of be a sunk cost, whether they have 16k residential PSU's or 15k or 10k.. Given that, they are now earning ~4.3B on 16.4k residential video PSU's in Q1 and ~3.7B on Internet  22.8k PSUs ,  so on an annual basis APRU per video user is $105 vs ARPU per internet user is $65 based on Q1 rates. And the former business is shrinking, while the internet business is growing.

Would love to hear your thoughts on why the shirnking video business is irrelevant or the thesis.

Because programming costs are generally not sunk or fixed costs. Charter generally pays the content companies on a per sub basis.
Title: Re: CHTR - Charter Communications
Post by: CLM5 on April 27, 2018, 01:16:17 PM
Why the market is obsessed with an almost-irrelevant segment of these cable companies, I'll never quite understand.

Because video is only break-even on a fully allocated cost basis (but still profit accretive on a marginal cost basis), and these cablco's are heavily leveraged - that's why.  Why do you think Rutledge & Co. was defending video until today.

Do you really think the total company EBITDA is going to stay the same if all of the video revenues (and programming costs) go to zero?  Sure some fixed costs can be cut, but I don't think all of them can.   You can argue that cableco's will recover the remaining residual fixed costs via pricing on the internet portion - but that trip from A to B can only be made to happen slowly.  If it is forced to happen quickly - I guarantee you no one has modelled that scenario.

wabuffo

Do you really think the total company EBITDA is going to stay the same if all of the video revenues (and programming costs) go to zero?

This is a fair point. However, in this context, I think it's rather irrelevant as well. If the video segment went to 0 tomorrow, then sure... it would probably take years to right their cost structure, and they may never hit the margins of their broadband business. But that reality isn't even near the horizon. Cable TV will be around for many years into the future. We're talking about a quarter where Charter lost 122k subscribers and still has 16.4million video subscribers remaining. At that quarterly rate, it would still be another ~35 years before their video segment is a zero. Still relevant?

Edit: Rereading that made is come across as sassy. That's not the way I meant it. I think on average, Charter has been losing and will probably continue to lose 3-400k video subscribers annually. That doesn't worry me. If that number we're creeping up towards the millions, then maybe I would be worried... but they have plenty of time to fix their cost structure while the video segment slowly melts. In the meantime, their broadband segment (which generates significant cash) is growing faster than their video segment (which is slim margin) is shrinking. I fail to see the worry here. I think there may be worry in other areas of broadband, but I don't think this is the area to worry about.
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on April 27, 2018, 01:41:09 PM
Why the market is obsessed with an almost-irrelevant segment of these cable companies, I'll never quite understand.

Because video is only break-even on a fully allocated cost basis (but still profit accretive on a marginal cost basis), and these cablco's are heavily leveraged - that's why.  Why do you think Rutledge & Co. was defending video until today.

Do you really think the total company EBITDA is going to stay the same if all of the video revenues (and programming costs) go to zero?  Sure some fixed costs can be cut, but I don't think all of them can.   You can argue that cableco's will recover the remaining residual fixed costs via pricing on the internet portion - but that trip from A to B can only be made to happen slowly.  If it is forced to happen quickly - I guarantee you no one has modelled that scenario.

Look - I'm a CHTR shareholder and a Rutledge fan.  But I don't like the changing narrative about video from a CEO who is supposed to be a details-oriented operator with a strong command of the numbers.  That's a bit of a red-flag.

wabuffo

Cable One (CABO) claims that there is very little margin in traditional video subs even on an incremental basis. They say that there are significant number of variable costs in addition to per-sub content costs to handle a video customer: customer service, truck rolls, DVR costs, etc. Perhaps some of this is due the fact that CABO has a much smaller scale than Comcast or Charter. The fundamental problem with video is that (US) content is too expensive as it grew much faster than inflation for many years and customers have had it. OTT provided an outlet for this with password sharing.

I agree with you about Rutledge however. He should have seen this coming much sooner.
Title: Re: CHTR - Charter Communications
Post by: dwy000 on April 27, 2018, 02:16:35 PM
At the end of the day, content is expensive to produce (as Netflix will attest to) and needs to be paid for as long as people want to watch something other than cat videos.  Cable vs OTT is just the delivery mechanism and from that perspective I like cable's position vis-à-vis access to content.  For any content provider, the cablecos offer immediate scale and convenience for users.  For the customer, having 5-6 different OTT providers and having to pay multiple bills, having to go into the app and out of it to watch different things, plus the access to local content - it's easier and cheaper to have one provider and cable has the scale to price it cheaper than any other consolidator.

Even as a breakeven business, that's probably a money loser for other OTT consolidators who don't have the same scale buying power.  But some point you get right back to the cable bundle and their willingness to break it up (already happening).

Frankly, the cable cos could just crank up the price of naked broadband by $20/month and offer a bundled package cheaper than a customer could get naked broadband plus OTT services.
Title: Re: CHTR - Charter Communications
Post by: Gamecock-YT on April 27, 2018, 03:21:22 PM
Why the market is obsessed with an almost-irrelevant segment of these cable companies, I'll never quite understand.

Because video is only break-even on a fully allocated cost basis (but still profit accretive on a marginal cost basis), and these cablco's are heavily leveraged - that's why.  Why do you think Rutledge & Co. was defending video until today.

Do you really think the total company EBITDA is going to stay the same if all of the video revenues (and programming costs) go to zero?  Sure some fixed costs can be cut, but I don't think all of them can.   You can argue that cableco's will recover the remaining residual fixed costs via pricing on the internet portion - but that trip from A to B can only be made to happen slowly.  If it is forced to happen quickly - I guarantee you no one has modelled that scenario.

Look - I'm a CHTR shareholder and a Rutledge fan.  But I don't like the changing narrative about video from a CEO who is supposed to be a details-oriented operator with a strong command of the numbers.  That's a bit of a red-flag.

wabuffo

Cable One (CABO) claims that there is very little margin in traditional video subs even on an incremental basis. They say that there are significant number of variable costs in addition to per-sub content costs to handle a video customer: customer service, truck rolls, DVR costs, etc. Perhaps some of this is due the fact that CABO has a much smaller scale than Comcast or Charter. The fundamental problem with video is that (US) content is too expensive as it grew much faster than inflation for many years and customers have had it. OTT provided an outlet for this with password sharing.

I agree with you about Rutledge however. He should have seen this coming much sooner.

This was GCI's theory on video as well.
Title: Re: CHTR - Charter Communications
Post by: cameronfen on April 27, 2018, 06:01:47 PM
I dont really get it.  If video is bad and merging with mobile is good, why not switch to LILAK? Significantly lower percentage of video, leveraged to emerging markets, has a substantial mobile business.  Sure they are not (really) buying back stock, but thats because they have higher ROI places to deploy capital, building out infustructure. 
Title: Re: CHTR - Charter Communications
Post by: vince on April 27, 2018, 06:23:01 PM
One thing I find interesting that investors don't talk about much is Chtr's pricing. Back of envelope shows a 5 dollar allocation increase to their monthly internet billings equals over a billion in earnings.  And we absolutely have at least that amount because our pricing is very attractive.  I hear analysts always pushing on mgmt and suggesting that pricing more aggressively would be beneficial to profits, lmao.  As if mgmt doesn't realize the profit increase potential.  Why does everybody think that higher profits now is always better?  I like having that option in our back pocket.  It discourages competitive entry, increases customer satisfaction and goodwill, and potentially decreases regulatory intervention.  I own two cable companies, Chtr and Cabo and a big reason why I prefer those is their pricing strategies.  And I strongly believe that the market is currently not giving any value to that pricing optionality.  Just another clear example of "we want results now" mentality.  God bless them!
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on April 27, 2018, 06:31:16 PM
A couple of points.

I do think that today was an overreaction. The loss of video does not matter much and the overall revenue and EBITDA growth rate were within expectation. The numbers were satisfactory, but not as good than the stellar numbers that CMCSA and that is probably part of the reason for the reaction.
It also does not make sense to look at FCF in a single quarter. FCF is a lumpy number and will move significantly from quarter to quarter.  I expect more Capex spending due to wireless and when it comes to that 5G, the latter may be a few years oout.

CHTR seems to have some catching up to do - their EBITDA margin is 37% vs CMCSA 40%+ and it is increasing very slowly. CHTR still trades at a premium to CMCSA on most metrics.

To elaborate on BG2008 point, cable is a toll road business, similar to a pipeline or and utility. pipeline and regulated utilities trade at 10x EBITDA or higher while Cable trades at 8.7x in thr case of CHTR or <8x in thr case of CMCSA, despite somewhat similar economics. So cable companies are cheap right now.

I like CMCSA better, because they are simply excellent operators and run their company with much lower leverage than Malone does. CMCSA leverage is 2.2x EBITDA and CHTR is 4.5 (roughly). This is why CMCSA can make a cash bid for SKY, which bumps up leverage to 3x, scale back stock purchases for a couple of years and then going back to 2.2x, while CHTR right now is close to the max of their leverage and can’t buy back stock in size, even though it would be a great time to do so. clearly not ideal, but that happens when you play to closemtomthr edge, like Malone likes to do.

That said, I added to CHTR today and also bought a bit more CMCSA. I like them both, but hard pressed, I would rather own CMCSA than CHTR.

Regarding Video, I think 10 years from now, the cable companies will just sell streaming packages with their broadband.  The risk for cable and to some extend TV networks is that they have to compete against Netflix and Amazon video and both don’t give a damn about profits. Sure, channels with proprietary content like HBO, DIS or TV channels for live news like ESPN or CNN should be able compete, but may have to live with lower profit margins, but stuff like Discovery Channel is probably going to hurt a lot, folks will just cut the cord and forget about them. That why I sold out of cable content stocks like DISK or AMCX despite them being quite cheap. I think they will get Amazoned like retail gets killed now.
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 28, 2018, 04:10:57 PM
Some interesting threads:

https://twitter.com/MarAzul_90/status/990315065021730817

https://twitter.com/BluegrassCap/status/990307059806691328

https://twitter.com/TheWisdmSeeker/status/990321860880482304
Title: Re: CHTR - Charter Communications
Post by: CorpRaider on April 28, 2018, 04:41:01 PM
How does it blow up? 

Some wireless tech advances that don't "need" fiber for the backhaul and thereby have a cost advantage, unless and until CHTR goes through BK (again) and cleans up balance sheet from legacy costs of all that fiber to the home?

Why did GOOG stop laying fiber?
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 29, 2018, 06:13:28 AM
How does it blow up? 

Some wireless tech advances that don't "need" fiber for the backhaul and thereby have a cost advantage, unless and until CHTR goes through BK (again) and cleans up balance sheet from legacy costs of all that fiber to the home?

Why did GOOG stop laying fiber?

I'd love more detail on how you'd imagine the physics of that would work.
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on April 29, 2018, 07:37:29 AM
A super huge thanks to all of you for illuminating such a great investment opportunity (intelligently & provocatively.)
I feel pretty high confidence here with funds I'll be needing around 2022ish.

Can anyone tell me why the f WEB didn't buy here instead of airlines?
Title: Re: CHTR - Charter Communications
Post by: marazul on April 29, 2018, 07:51:19 AM
Berkshire owns 3% of Charter
Title: Re: CHTR - Charter Communications
Post by: bergman104 on April 29, 2018, 08:24:01 AM
A super huge thanks to all of you for illuminating such a great investment opportunity (intelligently & provocatively.)
I feel pretty high confidence here with funds I'll be needing around 2022ish.

Can anyone tell me why the f WEB didn't buy here instead of airlines?

Completely agree. Reading this thread and some of the attached articles laid out the thesis perfectly. Special thanks to Liberty. Will initiate a position tomorrow.

Follow-up question though. Is there anywhere that describes a Verizon/AT&T thesis from the opposite angle? I feel like I get the Charter 5G/toll-road point of view but is there anything that can realistically disrupt their technology that is economically viable? Does anyone have insight into a doomsday scenario? 
Title: Re: CHTR - Charter Communications
Post by: chrispy on April 29, 2018, 11:51:30 AM
It seems like brk could increase their position here. Would love it if ffh did
Title: Re: CHTR - Charter Communications
Post by: CorpRaider on April 29, 2018, 02:19:39 PM
How does it blow up? 

Some wireless tech advances that don't "need" fiber for the backhaul and thereby have a cost advantage, unless and until CHTR goes through BK (again) and cleans up balance sheet from legacy costs of all that fiber to the home?

Why did GOOG stop laying fiber?

I'd love more detail on how you'd imagine the physics of that would work.

Sorry, I think you misread a question as a statement.

So you are implying that photons and a glass pipe are required, so the laws of physics dictate that alternate delivery is not one way it could blow up?  Seems like this article agrees with you, long term (I've also read the Deloitte report, like everyone else, projecting the explosion in demand for fiber):

https://www.zdnet.com/article/fiber-broadband-is-it-a-waste-with-5g-and-elon-musks-satellites-on-the-horizon/

I guess maybe continued surprise cord cutting numbers and a covenant or three gets tripped before the 5G rollout/demand explosion? 
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on April 29, 2018, 04:19:35 PM
How does it blow up? 

Some wireless tech advances that don't "need" fiber for the backhaul and thereby have a cost advantage, unless and until CHTR goes through BK (again) and cleans up balance sheet from legacy costs of all that fiber to the home?

Why did GOOG stop laying fiber?

I'd love more detail on how you'd imagine the physics of that would work.

Sorry, I think you misread a question as a statement.

So you are implying that photons and a glass pipe are required, so the laws of physics dictate that alternate delivery is not one way it could blow up?  Seems like this article agrees with you, long term (I've also read the Deloitte report, like everyone else, projecting the explosion in demand for fiber):

https://www.zdnet.com/article/fiber-broadband-is-it-a-waste-with-5g-and-elon-musks-satellites-on-the-horizon/

I guess maybe continued surprise cord cutting numbers and a covenant or three gets tripped before the 5G rollout/demand explosion?

Good read, thanks.
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 29, 2018, 05:21:31 PM
How does it blow up? 

Some wireless tech advances that don't "need" fiber for the backhaul and thereby have a cost advantage, unless and until CHTR goes through BK (again) and cleans up balance sheet from legacy costs of all that fiber to the home?

Why did GOOG stop laying fiber?

I'd love more detail on how you'd imagine the physics of that would work.

Sorry, I think you misread a question as a statement.

So you are implying that photons and a glass pipe are required, so the laws of physics dictate that alternate delivery is not one way it could blow up?  Seems like this article agrees with you, long term (I've also read the Deloitte report, like everyone else, projecting the explosion in demand for fiber):

https://www.zdnet.com/article/fiber-broadband-is-it-a-waste-with-5g-and-elon-musks-satellites-on-the-horizon/

I guess maybe continued surprise cord cutting numbers and a covenant or three gets tripped before the 5G rollout/demand explosion?

I was kind of just giving your question a push with another question.

The thing with wires, is that they're not shared. Airwaves/spectrum is a lot more shared, and the physics of radio waves means that the frequencies that have the higher throughput are also shorter range and don't penetrate materials as well as the longer ones, so you need more numerous, smaller cells, and you start to have more trouble providing reliable, high quality service...

So I'm trying to imagine a world where most houses in a decently dense neighborhood all start streaming 4K Netflix content (with all the kids in their bedrooms watching Youtube on their iPads simultaneously...) over wireless in the evening. It'd be difficult on the shared spectrum on a local level, it would be difficult to give good service to everyone (always weird deadspots and people deep in basements or with thick walls that get poor reception), and the backhaul needed to pipe all those bits back would be almost as costly to built as a new cableco from scratch, since each 5G cell would be quite small (lots of branches needed on the tree trunk, so to speak).

That's just how I visualize the situation, but maybe I'm missing something.
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on April 29, 2018, 05:45:21 PM
There just aren’t enough radio bands available to support high speed data transfer of a high cell densities without interference. Also, for very high dataspeed, one needs high frequency/ short wave bands, which have very poor penetration, which means that we probably need to look at line of sight systems, which are Prone to interruptions.

Infrared Light frequencies used in goadfiners are 10^5 x higher than common radio frequencies, and that is why more information can be squeezed through quartz fiber.
Title: Re: CHTR - Charter Communications
Post by: WayWardCloud on April 29, 2018, 07:37:00 PM
It looks like T-Mobile and Sprint are finally merging (if the regulator approves).
They plan on investing jointly $40B into 5G within the next 4 years, which sounds like a lot (?).
How do you guys think about this news relative to Charter?

I don't like having Masa as a competitor at scale (I know he's not going to be in actual full control of the board, but still) because he has the potential of being very irrational on pricing for years to come. He's so good at raising other people's capital to invest in pharaonic money-losing projects in the name of his long term vision. Otherwise, I find the US telecom/cable market to be pretty complacent with one another, running their businesses like cash cows rather than competing too much. The amount of actual competitive pressure is the big difference with Europe IMO and I see the Germans and Japanese as potential disrupters. That would be great for consumers but not so great for stock holders... Look at the price for broadband access in Europe vs US for example. Mobile is the same: in France I get unlimited cell voice + texts for 2 euros / month and I can add unlimited 4G for another 18 (14 if bundled with DSL at home).

On the other hand, it might just push Verizon to go after Charter again so they can roll-up their own 5G faster (but it will be a harder bargain for Malone at today's price tag).
Title: Re: CHTR - Charter Communications
Post by: Happy on April 30, 2018, 12:08:32 AM
Rutledge says video subscriber losses wouldn't affect the valuation much because they are only marginally profitable. However, when Malone ran TCI, his central insight was that scale is key in a cable company, so he made countless acquisitions. The TWC Brighthouse acquisition probably also was in part driven by scale. So if scale was that crucial in the past, why shouldn't there be negative operating leverage at work when video scale decreases? If video subscribers are only marginally profitable now, can they turn unprofitable due to negative operating leverage? Or has the business changed that much and costs are much more variable so that scale no longer is as important?
Title: Re: CHTR - Charter Communications
Post by: Liberty on April 30, 2018, 05:02:38 AM
Rutledge says video subscriber losses wouldn't affect the valuation much because they are only marginally profitable. However, when Malone ran TCI, his central insight was that scale is key in a cable company, so he made countless acquisitions. The TWC Brighthouse acquisition probably also was in part driven by scale. So if scale was that crucial in the past, why shouldn't there be negative operating leverage at work when video scale decreases? If video subscribers are only marginally profitable now, can they turn unprofitable due to negative operating leverage? Or has the business changed that much and costs are much more variable so that scale no longer is as important?

You have to look at what changed since then. Back then, video was very profitable.

Scale is still important, and you don't want to necessarily rapidly lose video subs and have a much worse rate card and all that. But if you had very slowly melting video subs with rapidly growing broadband, you'd be in a good spot. People cut video because they switch over to OTT video and spend more time on their mobile devices, so they're not really cutting the cord, just spending on a different product (with better margins) on the same cord.

If you look at this:

https://twitter.com/BluegrassCap/status/990627250402942981

Based on what management said, a lot of the video losses in this Q were for non-pay, and the timing was at the discretion of the company. It seems like it's possible that they had this spike in Q1 and the rest of the year will look a lot better (maybe grow? they seemed confident they could do it in the past, though the integration is probably disruptive on that front for now) because they just did it all at once rather than spread it over time.
Title: Re: CHTR - Charter Communications
Post by: cameronfen on April 30, 2018, 07:40:25 AM
Rutledge says video subscriber losses wouldn't affect the valuation much because they are only marginally profitable. However, when Malone ran TCI, his central insight was that scale is key in a cable company, so he made countless acquisitions. The TWC Brighthouse acquisition probably also was in part driven by scale. So if scale was that crucial in the past, why shouldn't there be negative operating leverage at work when video scale decreases? If video subscribers are only marginally profitable now, can they turn unprofitable due to negative operating leverage? Or has the business changed that much and costs are much more variable so that scale no longer is as important?

You have to look at what changed since then. Back then, video was very profitable.

Scale is still important, and you don't want to necessarily rapidly lose video subs and have a much worse rate card and all that. But if you had very slowly melting video subs with rapidly growing broadband, you'd be in a good spot. People cut video because they switch over to OTT video and spend more time on their mobile devices, so they're not really cutting the cord, just spending on a different product (with better margins) on the same cord.

If you look at this:

https://twitter.com/BluegrassCap/status/990627250402942981

Based on what management said, a lot of the video losses in this Q were for non-pay, and the timing was at the discretion of the company. It seems like it's possible that they had this spike in Q1 and the rest of the year will look a lot better (maybe grow? they seemed confident they could do it in the past, though the integration is probably disruptive on that front for now) because they just did it all at once rather than spread it over time.

As a further point, Charter makes roughly 16 billion in revenue in video revenue and spends 10 billion in programming costs alone.  After capex, marketing, and other costs (split evenly by revenue), these numbers seem to support Rutledge's point that these are barely profitable profitable even at the margin, (i.e. ignoring fixed costs, which are the same if you transmit only internet or transmit a triple/quaduple play) at best.   The corollary is that internet has EBITDA margins above 65%. 
Title: Re: CHTR - Charter Communications
Post by: BG2008 on April 30, 2018, 08:22:42 AM
Regarding video - My 2 cents is that if video shrinks too rapidly, then it could introduce shocks to the systems.  Second, Malone or someone at Charter had mentioned that video makes an argument that cable should not be regulated.  If Charter only owns the broadband, then it becomes dumb pipes and dumb pipes invites regulation.   
Title: Re: CHTR - Charter Communications
Post by: Happy on April 30, 2018, 09:00:48 AM
I agree that all seems fine if video is melting very slowly. It's a bit disappointing that broadband grew at a lower rate, but that might be just quarterly fluctuations.

If it's true that almost all video sub losses were discretionary decisions, the decline would be way overblown. But it doesn't seem totally irrational for Mr. Market to not just take management's word for a fact. A while ago they said that TWC offered broadband + video at a cheaper price than just broadband so they could show more video subs to Wall Street. They explained large video sub losses by cutting unprofitable contracts, where the customers with the incredible deals wouldn't renew to their new pricing. In one of the last quarters Winfrey suggested that they would turn the corner fairly shortly and that's why they were buying back stock up to $395. Now suddenly they lose way more video subs again than expected. Why didn't they cut these subs before when they were cleaning the house? Why didn't Winfrey say anything about this chunk left that they would probably need to cut at some point when he was talking about turning the corner soon? What they say might be a perfectly good explanation. But it is somewhat surprising given the earlier comments.

That said, if the decision was at the discretion of the company, it really might not be the sign of weakness Mr. Market thought because if the business were in bad shape, they probably would have tried to make the numbers look better instead of taking a large voluntary cut. 
Title: Re: CHTR - Charter Communications
Post by: Foreign Tuffett on April 30, 2018, 09:37:25 AM
I don't have a strong opinion on CHTR, but the bull case I keep seeing both here and on Twitter seems somewhat overly simplistic. A few thoughts, in no particular order:

* I pay $45 per month for Comcast internet. I have an acquaintance who pays well over $200 per month for Comcast internet + landline phone + an extensive cable TV package ("Triple Play"). Let's take a page out of Bezos' playbook and ignore gross margin %, to focus on gross profit $. I'm skeptical that my friend's nearly $3000 annual cable bill produces only a marginally higher gross profit # for Comcast than my own $540 annual bill.

* Most new cable sign ups that I've seen are done via a 12 or 24 month initial contract. Typically, unless you call and argue with a customer service rep, prices go up significantly for the same service once these initial contracts reach the end of their term. If the rate of cable video customer churn is increasing (which it appears to be), then lots of customers are probably downgrading to internet only once their initial contracts expire. This limits the ability of the cable companies to jack up the price and enhance the unit-level profitability of that customer.

* Similarly, increased video customer churn means that the cable companies have to (in effect) amortize the cost of the initial truck roll and digital set top box over a shorter time frame. This damages the unit level economics of the business.   

* I agree with the bulls that consumer demand for broadband internet is fairly price inelastic. However, the industry has to be cautious when increasing prices due to the threat of further government regulation. There's a long history of government conflict with the cable industry, which is perhaps best epitomized by Al Gore calling John Malone "Darth Vader."

* Finally, I think predicting what the 5G vs. fiber vs. cable picture is going to look like a decade from now is very, very difficult.

Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on April 30, 2018, 09:45:39 AM
I agree that all seems fine if video is melting very slowly. It's a bit disappointing that broadband grew at a lower rate, but that might be just quarterly fluctuations.

If it's true that almost all video sub losses were discretionary decisions, the decline would be way overblown. But it doesn't seem totally irrational for Mr. Market to not just take management's word for a fact. A while ago they said that TWC offered broadband + video at a cheaper price than just broadband so they could show more video subs to Wall Street. They explained large video sub losses by cutting unprofitable contracts, where the customers with the incredible deals wouldn't renew to their new pricing. In one of the last quarters Winfrey suggested that they would turn the corner fairly shortly and that's why they were buying back stock up to $395. Now suddenly they lose way more video subs again than expected. Why didn't they cut these subs before when they were cleaning the house? Why didn't Winfrey say anything about this chunk left that they would probably need to cut at some point when he was talking about turning the corner soon? What they say might be a perfectly good explanation. But it is somewhat surprising given the earlier comments.

That said, if the decision was at the discretion of the company, it really might not be the sign of weakness Mr. Market thought because if the business were in bad shape, they probably would have tried to make the numbers look better instead of taking a large voluntary cut.

Are there people here who have an OTT product that have recently switched from cable, in particular from Spectrum or Comcast?  What about people who are hanging on to their satellite video products and using Comcast and Spectrum or cable for Internet?  Would you care to elaborate why you prefer that?

I've tried OTT products (Vue, DirectTV now, Hulu Live) and they aren't great honestly.  I have a 200 Mbps connection with Spectrum and I don't find it worth switching.  It barely saves any money either if I want news and the few channels that I and my wife watch and have a DVR like feature.  Im kinda stuck with Spectrum's expensive bundle for now.
Title: Re: CHTR - Charter Communications
Post by: longinvestor on April 30, 2018, 09:47:39 AM
I don't have a strong opinion on CHTR, but the bull case I keep seeing both here and on Twitter seems somewhat overly simplistic. A few thoughts, in no particular order:

* I pay $45 per month for Comcast internet. I have an acquaintance who pays well over $200 per month for Comcast internet + landline phone + an extensive cable TV package ("Triple Play"). Let's take a page out of Bezos' playbook and ignore gross margin %, to focus on gross profit $. I'm skeptical that my friend's nearly $3000 annual cable bill produces only a marginally higher gross profit # for Comcast than my own $540 annual bill.

* Most new cable sign ups that I've seen are done via a 12 or 24 month initial contract. Typically, unless you call and argue with a customer service rep, prices go up significantly for the same service once these initial contracts reach the end of their term. If the rate of cable video customer churn is increasing (which it appears to be), then lots of customers are probably downgrading to internet only once their initial contracts expire. This limits the ability of the cable companies to jack up the price and enhance the unit-level profitability of that customer.

* Similarly, increased vide

* Finally, I think predicting what the 5G vs. fiber vs. cable picture is going to look like a decade from now is very, very difficult.

+1 very balanced, unbiased post.

The script followed by cables is very old. And predictable, like sunrise.

As to the 12- or 24- month contract, I promptly play the duopoly one against the other. We have AT&T and Comcast with pipes into our home. I have been doing this for well over 15 years. They are not going to raise my price. Guess what, I have numerous people in my circles who do just that. Some of them call and get another  12- or 24- month extension of the discounted price.





Title: Re: CHTR - Charter Communications
Post by: Liberty on April 30, 2018, 10:03:59 AM
I'm thinking that people are reading way too much into one quarter. On a short time scale, most of what you see is noise, not signal.

Charter hasn't been taking much price, if any, since the acquisition. In fact, they've been increasing internet speeds on their packages, so they're giving people more value for the same price. They'll increase them even more when they are all-digital (which frees a ton of bandwidth in their pipes). I have no doubt that someday they'll take more price, but for now I don't think that's the reason.
Title: Re: CHTR - Charter Communications
Post by: dwy000 on April 30, 2018, 11:50:55 AM
It's baffling that Charter or Comcast with 20M+ customers wouldn't be able to make money on a product but OTT providers with less than 10% of that would be able to.  If it's the difference of being over cable vs. streaming (need a box, truck roll etc) then it's likely to eventually switch to a Cableco offered streaming product (as someone here pointed out). 

But again, unless people are going to just stop watching live or scripted TV, content needs to be paid for.  Having 20 different Netflix/HBO/Hulu type channels from each content provider seems much less efficient than a consolidator who can offer them all up.  And cablecos are easily best positioned to play that role.  Right now it's just a pricing issue given OTT consolidators appear to be doing it at a loss.
Title: Re: CHTR - Charter Communications
Post by: jmp8822 on April 30, 2018, 12:15:41 PM
I agree that all seems fine if video is melting very slowly. It's a bit disappointing that broadband grew at a lower rate, but that might be just quarterly fluctuations.

If it's true that almost all video sub losses were discretionary decisions, the decline would be way overblown. But it doesn't seem totally irrational for Mr. Market to not just take management's word for a fact. A while ago they said that TWC offered broadband + video at a cheaper price than just broadband so they could show more video subs to Wall Street. They explained large video sub losses by cutting unprofitable contracts, where the customers with the incredible deals wouldn't renew to their new pricing. In one of the last quarters Winfrey suggested that they would turn the corner fairly shortly and that's why they were buying back stock up to $395. Now suddenly they lose way more video subs again than expected. Why didn't they cut these subs before when they were cleaning the house? Why didn't Winfrey say anything about this chunk left that they would probably need to cut at some point when he was talking about turning the corner soon? What they say might be a perfectly good explanation. But it is somewhat surprising given the earlier comments.

That said, if the decision was at the discretion of the company, it really might not be the sign of weakness Mr. Market thought because if the business were in bad shape, they probably would have tried to make the numbers look better instead of taking a large voluntary cut.

Are there people here who have an OTT product that have recently switched from cable, in particular from Spectrum or Comcast?  What about people who are hanging on to their satellite video products and using Comcast and Spectrum or cable for Internet?  Would you care to elaborate why you prefer that?

I've tried OTT products (Vue, DirectTV now, Hulu Live) and they aren't great honestly.  I have a 200 Mbps connection with Spectrum and I don't find it worth switching.  It barely saves any money either if I want news and the few channels that I and my wife watch and have a DVR like feature.  Im kinda stuck with Spectrum's expensive bundle for now.

I've had the opposite experience of what you're describing with YouTube TV.  Forgive me for sounding like an advertisement: I pay $38.xx including tax, (recently raised for new customers to $40+tax). I get my local Fox Sports channel for MLB baseball plus other local sports, I get all the ESPN networks, I get all my local ABC, NBC, FOX, CBS channels included, I get all the Turner Networks, basically everything I want for live sports, plus a bunch of other channels. YouTube TV has DVR that saves shows for 9 months. The picture is crystal clear HD.  I have Spectrum internet with 60 MBPS for $40/month and I pay no tax because I own my router and modem. I will re-up my internet in 10 months to 200 MBPS for $45/month with no tax owed.

All that said - I pay ~$80/month for fast internet and everything I want in TV, without the games of a cable company. I can watch shows seamlessly on the go on my phone/laptop or in my house with Roku/phone/CPU.  Bottom line, I am paying at least $20+ per month less for internet/TV, while receiving a better TV experience (for me, at least), with no old clunky DVR box and no TV bill that has ridiculous fees/rising charges.
Title: Re: CHTR - Charter Communications
Post by: CorpRaider on April 30, 2018, 01:56:10 PM

* Finally, I think predicting what the 5G vs. fiber vs. cable picture is going to look like a decade from now is very, very difficult.

Impossible for me.  Which is why I look at google Access saying...no more fiber, we are doing wireless and I say, hmmm.

TMobile ans Sprint are going to be the position of painting wireless and cable cos as competitors, so we will probably hear some decent arguments about how and why they can all provide the same services in the future.
Title: Re: CHTR - Charter Communications
Post by: walkie518 on April 30, 2018, 03:45:21 PM

* Finally, I think predicting what the 5G vs. fiber vs. cable picture is going to look like a decade from now is very, very difficult.

Impossible for me.  Which is why I look at google Access saying...no more fiber, we are doing wireless and I say, hmmm.

TMobile ans Sprint are going to be the position of painting wireless and cable cos as competitors, so we will probably hear some decent arguments about how and why they can all provide the same services in the future.

There is no way the Sprint / TMobile deal would be happening unless Comcast and Charter were talking about competing with already existing 5G infrastructure.  The cost advantage might turn the MVNOs inside-out eventually? 
Title: Re: CHTR - Charter Communications
Post by: vince on April 30, 2018, 03:49:02 PM
Lets assume video losses continue worse than expected at 100,000 a quarter and internet additions continue adding 250-300 a qtr, which is probably a little slower than market is expecting, similar to latest qtr.  Under these circumstances we still are going to grow earnings nicely.  We have some operating synergies that still have to be realized and then some pricing power if need be and other levers for sure. My point is that the market is way too pessimistic on valuations based on what is currently happening.  What worries me more is potential irrational overbuild on the broadband side.  Yes their assets are advantaged but they arent bulletproof.  Having said that, imo, the multiple is way too low and is already pricing in lots of bad news.  Current earning power is in the 6.5-7.5 billion range.  Lastly, if things do start to look bleak then we have one of the best minds that will know how to get us out of there with the least amount of impairment. 
Title: Re: CHTR - Charter Communications
Post by: vince on April 30, 2018, 03:51:32 PM
Now if earnings had already stopped growing or were showing signs of really topping out then I would be nervous. 
Title: Re: CHTR - Charter Communications
Post by: Happy on May 01, 2018, 06:41:15 AM
Reading through the call, it appears that they didn't cut these video subs earlier because they recently did integration-related system changes where now the customer qualification and collection process conforms to their standard policy. It's understandable that they need to tackle issues like that one after another in such a big integration. It's unrealistic to expect them to do everything at once.
Winfrey also said "And non-pay disconnect and the associated bad debt should be back to normal rates by the end of Q2, which practically means the beginning of Q3."
So we might expect a similar impact on results in Q2 and then from Q3 on, they should be able to back up their talk with numbers. 
Title: Re: CHTR - Charter Communications
Post by: BG2008 on May 01, 2018, 07:31:17 AM
Has anyone looked at how lumpy results were on a quarter to quarter basis a few years back when they integrated other acquisitions?

Also on the call, they mentioned that a lot of the call centers are outsourced to the Phillipines.  During the integration phase, they need to pay for the Phillipines staff while they ramp up hiring staff here in the US. They are also building out a building in the US (forgot what city) and training employees simultaneously.  It will take a year or two to get the US employees up to speed.  The philosophy is that a better customer service experience should result in lower customer interaction because problems actually get solved.  It's funny that this is also what Elliot Noss from Tucows says about customer service.  Now Tucows is very different.  Their whole corporate culture is built around excellent customer service.  It's part of their DNA.  The customer service is actually a part of their strategic planning process.  Elliot went into detail about how a simpler pricing model (rather than hundreds or thousands of sku depending on which promotion you have) can dramatically lower the cost of servicing clients. 

I think the focus is still on the big picture.  How hard would be for the newbies to try to encroach upon CHTR's footprint?  Gigabit speed is possible with Docsis 3.1.  At some point with AI and VR, you may need 10 GB speed.  Can cable still handle that kind of data demand?  How much of CHTR's footprint is actually fiber vs coaxial?  If anyone knows the answer to this, please share. 
Title: Re: CHTR - Charter Communications
Post by: walkie518 on May 01, 2018, 03:25:50 PM
Has anyone looked at how lumpy results were on a quarter to quarter basis a few years back when they integrated other acquisitions?

Also on the call, they mentioned that a lot of the call centers are outsourced to the Phillipines.  During the integration phase, they need to pay for the Phillipines staff while they ramp up hiring staff here in the US. They are also building out a building in the US (forgot what city) and training employees simultaneously.  It will take a year or two to get the US employees up to speed.  The philosophy is that a better customer service experience should result in lower customer interaction because problems actually get solved.  It's funny that this is also what Elliot Noss from Tucows says about customer service.  Now Tucows is very different.  Their whole corporate culture is built around excellent customer service.  It's part of their DNA.  The customer service is actually a part of their strategic planning process.  Elliot went into detail about how a simpler pricing model (rather than hundreds or thousands of sku depending on which promotion you have) can dramatically lower the cost of servicing clients. 

I think the focus is still on the big picture.  How hard would be for the newbies to try to encroach upon CHTR's footprint?  Gigabit speed is possible with Docsis 3.1.  At some point with AI and VR, you may need 10 GB speed.  Can cable still handle that kind of data demand?  How much of CHTR's footprint is actually fiber vs coaxial?  If anyone knows the answer to this, please share.

https://www.youtube.com/watch?v=ys7Zhc0WMTU
Title: Re: CHTR - Charter Communications
Post by: cmlber on May 02, 2018, 06:46:36 AM
Efficient markets at work...  CABO has been saying video is profitless and shedding video customers for years, CHTR has been saying video can grow and is profitable.  Yet in the three trading days following CHTR's earnings which surprised with larger than expected video sub losses and included management commentary about how video is immaterial, CABO EV is down 6.5%, CHTR EV is down 3.1%. 
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on May 02, 2018, 07:29:33 AM
Ott is e-commerce and video is retail ?
Both are distribution models but one is better so maybe cable co should take a black and white approach and get out of retail !
Also what happens if broadband cable is disrupted, then this investment slowly grinds to zero.
I will wait until 2020 to see a mobile merger but If it underperforms I'll believe the market is making a better assessment of the future.
Ps. If you think it won't go much lower gliba puts at 30 for December traded at 1.2 for over 20 percent return on collateral with a reasonable margin of safety
Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on May 02, 2018, 09:10:31 AM
  CABO has been saying video is profitless and shedding video customers for years, CHTR has been saying video can grow and is profitable. 

I don't want to read too much into a quarter or a stock price reaction, but I think this is an important point.

Here is Rutledge in 2015

"In any event we think video remains a profitable business. It's a core part of our strategy, it's what we sell together with Internet and phone. And what we're selling is profitable and that's what really matters to us, as opposed to trying to divvy it up and decide who gets a certain amount of network operating costs. It's somewhat arbitrary and it's not what we sell. So we don't look at it that way."


And in the last earnings call, as video subs are falling off

"There's very little margin in the video business. So whether you're (inaudible) by 1 million customers is relatively immaterial to our plan. And while we think that we will make a great video product available to our customers and that, that great video product will continue to help us drive the overall connectivity business we have, if we're asked in our forecast for that, it's not significantly financially material to our growth prospects."

And quite frankly for me the CHTR thesis has always been based on internet, not video of course, but for the first time I'm questioning the credibility of management here.  And i'm also a bit worried about true 5G into the home without the need for a fixed connection.  I'm a spectrum customer but if I have ATT/VZ giving me high speed, unlimited cellular everywhere, I'll happily disconnect my spectrum package and lower my bill.  I understand that Charter/Comcast have great networks, but are they going to end up being just a backhaul provider to cellular companies in some small section of the country in their footprint, without retail customers in 5-7 years?  Is their attitude slightly laissez-faire  towards this threat, just like it was towards video?  I'm not sure.
Title: Re: CHTR - Charter Communications
Post by: longinvestor on May 02, 2018, 10:10:06 AM
  CABO has been saying video is profitless and shedding video customers for years, CHTR has been saying video can grow and is profitable. 

I don't want to read too much into a quarter or a stock price reaction, but I think this is an important point.

Here is Rutledge in 2015

"In any event we think video remains a profitable business. It's a core part of our strategy, it's what we sell together with Internet and phone. And what we're selling is profitable and that's what really matters to us, as opposed to trying to divvy it up and decide who gets a certain amount of network operating costs. It's somewhat arbitrary and it's not what we sell. So we don't look at it that way."


And in the last earnings call, as video subs are falling off

"There's very little margin in the video business. So whether you're (inaudible) by 1 million customers is relatively immaterial to our plan. And while we think that we will make a great video product available to our customers and that, that great video product will continue to help us drive the overall connectivity business we have, if we're asked in our forecast for that, it's not significantly financially material to our growth prospects."

And quite frankly for me the CHTR thesis has always been based on internet, not video of course, but for the first time I'm questioning the credibility of management here.  And i'm also a bit worried about true 5G into the home without the need for a fixed connection.  I'm a spectrum customer but if I have ATT/VZ giving me high speed, unlimited cellular everywhere, I'll happily disconnect my spectrum package and lower my bill.  I understand that Charter/Comcast have great networks, but are they going to end up being just a backhaul provider to cellular companies in some small section of the country in their footprint, without retail customers in 5-7 years?  Is their attitude slightly laissez-faire  towards this threat, just like it was towards video?  I'm not sure.
+1, the disconnect "threat" is playing out as we speak. Viable Wireless last mile solutions, when it happens will bring on sudden death syndrome.

Now, getting into backhaul biz is something else. I happen to be invested in the largest backhaul player, CTL. (née LVLT). Those waters are filled with flesh eating fish. I love the thought of a 5G or some similar world in the future. There is a wonderful pun put out by Jeff Storey, CEO-CTL . “data is looking for wire less path as soon as it is generated”. The world where the pipe into my house is rendered obsolete is CTL’s world. Monetizing has been a slow struggle but 5G, yeah baby!

Title: Re: CHTR - Charter Communications
Post by: cameronfen on May 02, 2018, 12:36:08 PM
  CABO has been saying video is profitless and shedding video customers for years, CHTR has been saying video can grow and is profitable. 

I don't want to read too much into a quarter or a stock price reaction, but I think this is an important point.

Here is Rutledge in 2015

"In any event we think video remains a profitable business. It's a core part of our strategy, it's what we sell together with Internet and phone. And what we're selling is profitable and that's what really matters to us, as opposed to trying to divvy it up and decide who gets a certain amount of network operating costs. It's somewhat arbitrary and it's not what we sell. So we don't look at it that way."


And in the last earnings call, as video subs are falling off

"There's very little margin in the video business. So whether you're (inaudible) by 1 million customers is relatively immaterial to our plan. And while we think that we will make a great video product available to our customers and that, that great video product will continue to help us drive the overall connectivity business we have, if we're asked in our forecast for that, it's not significantly financially material to our growth prospects."

And quite frankly for me the CHTR thesis has always been based on internet, not video of course, but for the first time I'm questioning the credibility of management here.  And i'm also a bit worried about true 5G into the home without the need for a fixed connection.  I'm a spectrum customer but if I have ATT/VZ giving me high speed, unlimited cellular everywhere, I'll happily disconnect my spectrum package and lower my bill.  I understand that Charter/Comcast have great networks, but are they going to end up being just a backhaul provider to cellular companies in some small section of the country in their footprint, without retail customers in 5-7 years?  Is their attitude slightly laissez-faire  towards this threat, just like it was towards video?  I'm not sure.
+1, the disconnect "threat" is playing out as we speak. Viable Wireless last mile solutions, when it happens will bring on sudden death syndrome.

Now, getting into backhaul biz is something else. I happen to be invested in the largest backhaul player, CTL. (née LVLT). Those waters are filled with flesh eating fish. I love the thought of a 5G or some similar world in the future. There is a wonderful pun put out by Jeff Storey, CEO-CTL . “data is looking for wire less path as soon as it is generated”. The world where the pipe into my house is rendered obsolete is CTL’s world. Monetizing has been a slow struggle but 5G, yeah baby!

Not to rain on your parade but, arguably the player that can benefit from 5G is America Movil with 230 million mobile subs and 75 million cable RGUs.  Carlos Slim chairman of Movil and a pretty good investor himself admitted in Movils earnings call that 5G is not going to be competitive with cable.  Now that doesnt mean there isnt a place for wireless broadband as esp in latin america a majority of homes arent connected to cable yet.  But wireless broadband could be seen as an alternative to satellite internet (maybe not confident on this but maybe reading into what Slim is saying?), but according to him not a huge substitute for cable.  See here around 20 min: aroundhttps://78449.choruscall.com/dataconf/productusers/amx/mediaframe/24091/indexr.html

PS It just occured to me he could be saying this so he doesn't have to upgrade infastructure.  So take with  grain of salt.  Again I dont know why Slim says this as the speed of 5G will, at least according to the internet, be faster that cable. 
Title: Re: CHTR - Charter Communications
Post by: vince on May 02, 2018, 12:43:37 PM
  CABO has been saying video is profitless and shedding video customers for years, CHTR has been saying video can grow and is profitable. 

I don't want to read too much into a quarter or a stock price reaction, but I think this is an important point.

Here is Rutledge in 2015

"In any event we think video remains a profitable business. It's a core part of our strategy, it's what we sell together with Internet and phone. And what we're selling is profitable and that's what really matters to us, as opposed to trying to divvy it up and decide who gets a certain amount of network operating costs. It's somewhat arbitrary and it's not what we sell. So we don't look at it that way."


And in the last earnings call, as video subs are falling off

"There's very little margin in the video business. So whether you're (inaudible) by 1 million customers is relatively immaterial to our plan. And while we think that we will make a great video product available to our customers and that, that great video product will continue to help us drive the overall connectivity business we have, if we're asked in our forecast for that, it's not significantly financially material to our growth prospects."

And quite frankly for me the CHTR thesis has always been based on internet, not video of course, but for the first time I'm questioning the credibility of management here.  And i'm also a bit worried about true 5G into the home without the need for a fixed connection.  I'm a spectrum customer but if I have ATT/VZ giving me high speed, unlimited cellular everywhere, I'll happily disconnect my spectrum package and lower my bill.  I understand that Charter/Comcast have great networks, but are they going to end up being just a backhaul provider to cellular companies in some small section of the country in their footprint, without retail customers in 5-7 years?  Is their attitude slightly laissez-faire  towards this threat, just like it was towards video?  I'm not sure.
I am heavily invested in Chtr and Cabo and yet this has been the best post on this subject by far, at least for the last couple months.  Excellent
Title: Re: CHTR - Charter Communications
Post by: vince on May 02, 2018, 12:53:39 PM
It really does show that maybe mgmt has been overconfident based on results with legacy Charter and it is the first sign that I have seen that mgmt is conceding that the future is going to be at least a little harder than originally thought.  The growth rates I use are already conservative and the prices right now are highly likely to be way low, however Toms contradiction makes u wonder.  I also came across a 2014 transcript where Maffei said something like "we are just trying to lock up as many customers before the inevitable fiber overbuild by everyone else".
Title: Re: CHTR - Charter Communications
Post by: jgyetzer on May 02, 2018, 01:55:37 PM
Did something change in the past six months where telecoms have developed technology that allows transmission of the higher frequency signals through common building materials?  Can anyone comment on what has caused the drastic change in confidence that 5G will work for in-home broadband?  How does the signal actually get into the building? 

I am trying to puzzle this out as well as why so many of these entities were approaching Charter for acquisition just a short time ago because of the value of the infrastructure and now the assumption seems to be that it’s no longer so valuable.  Have I missed important developments in the technology or is this just moody Mr. Market?
Title: Re: CHTR - Charter Communications
Post by: Jurgis on May 02, 2018, 02:00:20 PM
Did something change in the past six months where telecoms have developed technology that allows transmission of the higher frequency signals through common building materials?  Can anyone comment on what has caused the drastic change in confidence that 5G will work for in-home broadband?  How does the signal actually get into the building? 

I am trying to puzzle this out as well as why so many of these entities were approaching Charter for acquisition just a short time ago because of the value of the infrastructure and now the assumption seems to be that it’s no longer so valuable.  Have I missed important developments in the technology or is this just moody Mr. Market?

Regarding 5G, it's mostly moody Mr.s CoBFs.  8)
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 02, 2018, 02:22:39 PM
Did something change in the past six months where telecoms have developed technology that allows transmission of the higher frequency signals through common building materials?  Can anyone comment on what has caused the drastic change in confidence that 5G will work for in-home broadband?  How does the signal actually get into the building? 

I am trying to puzzle this out as well as why so many of these entities were approaching Charter for acquisition just a short time ago because of the value of the infrastructure and now the assumption seems to be that it’s no longer so valuable.  Have I missed important developments in the technology or is this just moody Mr. Market?

Mr. Market has the memory of a goldfish on acid.
Title: Re: CHTR - Charter Communications
Post by: Rasputin on May 02, 2018, 02:22:48 PM
I collected these historical residential psu video numbers from CHTR past 10Q and 10K.  Tom Rutledge joined Charter in Q1 2012
Q1 2012 4164
Q2 2012 4098
Q3 2012 4025 (4322 with Bresnan)
Q4 2012 3989 (4286 with Bresnan)
Q1 2013 3965 (4261 with Bresnan)
Q2 2013 3917 (4206 with Bresnan)
Q3 2013 4179 compared with 4322 Q3 2012 (Charter acquired Bresnan in Q3 2013)
Q4 2013 4177 compared with 4286 Q4 2013
Q1 2014 4195
Q2 2014 4166
Q3 2014 4157
Q4 2014 4160 (residential multi dwelling adjusted 4324)
Q1 2015 4153
Q2 2015 4120
Q3 2015 4132
Q4 2015 4322 (compared to 4324 Q4 2014, residential multiple dwelling counting change in Q4 2015)
Q1 2016 4332 (17086 with TWC + Bright House)
Q2 2016 16934
Q3 2016 16887
Q4 2016 16836
Q1 2017 16736
Q2 2017 16646
Q3 2017 16542
Q4 2017 16544
Q1 2018 16422

Video sub only started stabilizing in Q4 2015 and grew slightly in Q1 2016.  TWC+Bright House transactions in Q2 2016 and video subs decline again...

Decline rate y/y for Q1
2013 4.8%
2014 1.5%
2015 1.0%
2016 GREW 0.5%
2017 2.1%
2018 1.9%


Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on May 02, 2018, 02:45:12 PM
Elementary physics teaches us that radio Wavelength = c/f, where c is the speed of light and f is the frequency of propagation. Very wide bandwidth needed to enable 5G wireless high speed data transmission is only available at millimeter wave frequencies (for example 28GHz). But these frequencies are terrible for radio propagation and can only reach very short distances unless there is a directional antenna with line of sight. This is why I do not think 5G fixed wireless will be a threat to cable.

If you want to have some fun, just take your Wifi router well outside your home with thick walls (still connected to cable modem via a long ethernet cable on the WAN side). Then go inside the home far away from the Wifi router and measure the data rate on your smartphone connected to the router. You will find a significant degradation relative to the cable modem download speed. And Wifi frequencies are 2.4 Ghz/5 GHz which are a lot better for radio propagation than the 5G millimeter waves.

So at best 5G nodes will look like Wifi access points (with less range than Wifi) tethered to a high speed coax/fiber. If anything, 5G will help cable in my judgment.
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 02, 2018, 03:18:23 PM
So at best 5G nodes will look like Wifi access points (with less range than Wifi) tethered to a high speed coax/fiber. If anything, 5G will help cable in my judgment.

Couldn't range on 5G still be better than wifi because the transmission power will be higher? Though I agree about the problems caused by the physics of using these frequencies. The economics sound very different from large cells currently used for LTE.
Title: Re: CHTR - Charter Communications
Post by: JRM on May 02, 2018, 03:23:49 PM
Here's a Forbes interview which takes the position that 5G will replace broadband.  They even claim that peak broadband was "3 years ago", and the article was written in 2017: https://www.forbes.com/sites/washingtonbytes/2017/09/22/the-dawn-of-5g-will-wireless-kill-the-broadband-star/#2d2e8b5efd7f (https://www.forbes.com/sites/washingtonbytes/2017/09/22/the-dawn-of-5g-will-wireless-kill-the-broadband-star/#2d2e8b5efd7f)
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on May 02, 2018, 03:26:49 PM
Quote
Couldn't range on 5G still be better than wifi because the transmission power will be higher?

Power may make some difference on the edges but not much if the access point antenna is omnidirectional and there are significant obstructions like walls. You can test this by increasing the power on your Wifi router. I tested it: bought an external amplifier and jacked up the power output of my Wifi router antenna and it made almost no difference to the Wifi range.
Title: Re: CHTR - Charter Communications
Post by: vince on May 02, 2018, 03:46:47 PM
Did something change in the past six months where telecoms have developed technology that allows transmission of the higher frequency signals through common building materials?  Can anyone comment on what has caused the drastic change in confidence that 5G will work for in-home broadband?  How does the signal actually get into the building? 

I am trying to puzzle this out as well as why so many of these entities were approaching Charter for acquisition just a short time ago because of the value of the infrastructure and now the assumption seems to be that it’s no longer so valuable.  Have I missed important developments in the technology or is this just moody Mr. Market?

Well even Rutledge has alluded to "different competitive environment than originally expected" and thats one reason why they have upped their speeds quicker than they expected too (which has caused capex to be pulled forward and higher than market was expecting).  And wireless initiative has been pulled forward as well, which in addition to, probably makes lots of sense because of relationship to comcast and where they are in terms of wireless.  But I guarantee there is an urgency with wireless as a competitive response to AT&T.  I dont know exactly what AT&T is doing but I believe they are being aggressive with improving their copper and also laying more fiber than expected.
Title: Re: CHTR - Charter Communications
Post by: vince on May 02, 2018, 03:49:30 PM
Anyone have a better idea of AT&T competitive actions with regards to broadband within last 18 months?  I know all the operators were calling Charter the biggest disrupter a couple years ago and this probably jolted AT&T into action, whether rational or not. 
Title: Re: CHTR - Charter Communications
Post by: vince on May 02, 2018, 03:51:21 PM
And can anyone please explain in some detail what exactly happened with these "non paying subscriber" losses the last qtr and why that was unusual and does anyone know what kind of hit it was in financial terms???  Please and Thanks.
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on May 02, 2018, 04:11:03 PM
Anyone have a better idea of AT&T competitive actions with regards to broadband within last 18 months?  I know all the operators were calling Charter the biggest disrupter a couple years ago and this probably jolted AT&T into action, whether rational or not.

ATT is contractually obligated to expand their FTTP footprint to 12.5M customers as a condition for the Direct TV merger. They yt themselves a huge anchor around their leg with that Direct TV acquistion, IMO.  ATT off and on has been building their FTTP network, they put $ into Uverse a while ago, but then stopped doing it. I think Verizon on the east coast is much better build out and can compete with cable.
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on May 02, 2018, 04:42:03 PM
Here's a Forbes interview which takes the position that 5G will replace broadband.  They even claim that peak broadband was "3 years ago", and the article was written in 2017: https://www.forbes.com/sites/washingtonbytes/2017/09/22/the-dawn-of-5g-will-wireless-kill-the-broadband-star/#2d2e8b5efd7f (https://www.forbes.com/sites/washingtonbytes/2017/09/22/the-dawn-of-5g-will-wireless-kill-the-broadband-star/#2d2e8b5efd7f)

The guy who said peak broadband was "3 years ago" is completely wrong in terms of how much the speeds have improved in the last 3 years. And customers love higher speeds. 

I find the following part interesting:

Rysavy: The number of cells is central to capacity. First, mmWave only works over shorter distances, so cells are inherently small. Second, to get the capacity gains, you only want a small number of users in each cell.
Title: Re: CHTR - Charter Communications
Post by: vince on May 02, 2018, 04:51:01 PM

Washington Bytes We discuss the top technology policy issues in the Nation’s Capital 
Opinions expressed by Forbes Contributors are their own.
 Washington Bytes Washington Bytes , Contributor
Graphic by Daniel Kleinman, Forbes Staff MANDEL NGAN/AFP/Getty Images
Graphic by Daniel Kleinman, Forbes Staff

On this edition of the Bytes Chat, we explore the state of U.S. broadband competition and the likely impact of the fifth-generation (“5G”) wireless technologies. Should cable companies be scared, and if so, how long will it take 5G to upset the competitive balance? Our special guest was Peter Rysavy, president of Rysavy Research, a consultancy on wireless technologies. Before founding Rysavy Research, Peter served as vice-president of engineering and technology at Traveling Software (later renamed LapLink), and as the executive director of the Wireless Technology Association. We were joined by network engineer Richard Bennett, co-inventor of Wi-Fi, international policy consultant, and founder of High Tech Forum; and Jodi Beggs, a consulting economist for Akamai Technologies and founder of Economists Do It With Models. The chat was moderated by Washington Bytes editor Hal Singer. The transcript has been edited lightly for readability.

Hal Singer: Let’s begin with the state of broadband competition. Seems like we can’t describe competition until we measure it. In January 2015, the FCC redefined broadband upward to 25 Mbps. Richard, you’ve described the FCC’s reasoning on the redefinition as being “thin.” Why so harsh?

Richard Bennett: The FCC has failed to offer a substantial reason for raising the threshold. The agency’s Measuring Broadband America reports have consistently shown that web pages don’t load any faster at broadband speeds above 15 Mbps, and we don’t need more than 15 for 4K Netflix streams. Many VDSL packages top out at 24 Mbps, so the UK defines ultra-broadband at 24. The 25 Mbps “Wheeler Standard” looks like cooking the books. There aren’t any common apps that require 25 Mbps. It’s nice to have fast file downloads, but we don’t do much of that anymore.


Peter Rysavy: I don’t think many mainstream apps today can take advantage of 25 Mbps. But in the future, virtual reality can consume massive bandwidth. When I analyze demand for wireless broadband, I look at both Internet and TV cord replacement. TV content delivered to households can drive values much higher.

Jodi Beggs: Do these findings—that 15 Mbps is sufficient—still hold when there are a bunch of devices hooked up to the same household router? Is there a benefit of 25 Mbps if a household has, say, 10 devices using the connection, even though no single app/device can use the full throughput?

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Bennett: Multiple people surfing the web on the same broadband pipe don’t have much effect on each other because there’s a lot of idle time. Multiple Netflix streams can impair each other, however. But 15 Mbps is enough for two HD streams plus web. Internet-of-Things type devices don’t consume a lot of bandwidth unless they’re always-on cameras. Netflix is the main high bandwidth app of concern, and it uses about 4 Mbps per HD stream. Netflix Ultra HD requires 8 to 12 Mbps.

Rysavy: The biggest driver of bandwidth today is video, so the more devices consuming video at the same time, and the higher the resolution (HD vs. ultra HD for example), the greater the demands. Today, HD requires 4 or so Mbps. Sports with rapid motion can use up to 30 Mbps in UHD. But you'd probably need a 70-inch television to see the difference. Goes back to whether you're trying to also cut the cord to TV.

Beggs: So bandwidth requirements expand to fill the space sort of like processor requirements do with software?

Rysavy: Yes, people will consume any bandwidth you give them.

Bennett: The trend that I see is networks getting 35% faster year after year because Moore’s Law. I only see about a 5% growth in application demand.

Singer: Shifting gears slightly, in terms of average download speeds, how much faster is the current generation of U.S. wireline connections than the current generation of U.S. wireless connections?

Bennett: The Speedtest Global Index says the average download speed for mobile is 23 Mbps in the US, and the average for wired is 73 Mbps. Akamai data is higher on wired and lower on mobile. But the ratio is roughly between 3:1 and 5:1.

Singer: Can a broadband user with a 10 Mbps wireless connection do the same things as a user with a 10 Mbps wireline connection? In other words, is there any measurable difference in quality between the two technologies holding download speeds equal?

Rysavy: For the most part, the two connections can do the same thing. A small cell connection will perform identically. Especially with 5G being designed for very low latency.

Beggs: Are there any performance differences between wireless and wireline in terms of latency (as opposed to throughput)?

Bennett: There are minor variations in latency on mobile networks, so wired tends to be more consistent…when it’s working. 5G may actually have less latency than cable, right Peter? A DOCSIS cable modem has a lot of synchronization overhead—that is, when a DOCSIS cable modem starts talking, it takes the listener a while to tune into the message.

Rysavy: Not sure about latency for cable vs. 5G. Probably depends more on backend architecture, not the access technology.

Singer: You guys just can't wait to talk 5G!! We’re not there in my outline!

Beggs: It's new and shiny!

Singer: Let’s accept the FCC's 25 Mbps standard—warts and all—and focus only on wireline connections. According to FCC census block data analyzed by CMA Strategy, as of June 2016 there were over 46 million homes with only one provider of wireline broadband speeds greater than 25 Mbps (the “underserved” homes), and there were roughly 11 million homes have no access to 25 Mbps fixed-line service (the “unserved” homes). That’s not a glowing report card, right?

Rysavy: Not if you use the 25 Mbps standard. But as discussed, most people don’t need that today.

Bennett: Well, both the share of census blocks unserved (relative to all homes) and the share of census blocks underserved (relative to all homes) dropped from late 2015 to mid 2016. Compare Figure 4 of the April 2017 report to Figure 4 of the November 2016 report. And bear in mind that the areas the FCC calls “served at 10 Mbps” are really getting as much as 24 Mbps.

Singer: That’s a good thing. And there appears to be even better news for broadband consumers on the horizon. Peter has a new report on the impact of the next generation of wireless technology or “5G” that might shake things up and make things better for folks living in underserved or unserved areas. Peter, can you explain to our readers what 5G is, and how it materially differs from the current, fourth-generation (“4G”) wireless technology?

Rysavy: The most important features of 5G are the ability to use a wide range of spectrum, radio channels of many different sizes, and the ability to address a wide range of use cases. For example, 5G will work in any band from 600 MHz to 100 GHz.

Beggs: How does this help from the average household's perspective?

Rysavy: 5G will have the capability to compete directly against wireline technologies such as DSL and cable. Also fiber in some cases. This will result in more broadband options for consumers.

Bennett: I expect the cable guys will build 5G networks, but that won’t increase competition. Households care about speeds, prices, and reliability.

Beggs: Why would a household care about the frequency range?

Rysavy: They don't care about frequencies. But I had to wait many months for Charter to bring coax under the street to my home. With 5G, the connection could have been installed much more easily.

Bennett: The discussion about “broadband” tends to be too focused on wired networks, but we’ve moved on. Wireless is now the primary network and wired is the accessory.

Beggs: Right. It seems like one of the main advantages of wireless in general is that it greatly lowers the fixed cost of onboarding a customer who doesn't have existing broadband infrastructure. Why is that?

Bennett: A great deal of the cost of building a network is the last 1,000 feet. FiOS costs Verizon about $700 to $1,000 per home, but small cells lowers that cost to $100 to $200 per home.

Rysavy: The cable guys are looking at 5G. Charter is doing some trials. But they will be at a competitive disadvantage compared to a cellular operator doing dense 5G deployments.
IMO this exchange shows that he is not well informed as to cables abilities.  Comcast is up and running with continuous coverage
Beggs: Why are cable guys at a competitive disadvantage?

Rysavy: Because a cellular operator with a dense 5G network can provide both fixed and mobile broadband. A cable operator will only have a fixed network. To support handsets, the 5G network will tightly integrate with 4G for coverage. Cable operators don't have that macro 4G network to fall back on.

Bennett: Can’t cable operators build small cells? Nobody has them now.

Rysavy: Yes, cable operators can and will build small cells. But, as mentioned, they can't provide the continuous coverage, especially for mobile devices.
Title: Re: CHTR - Charter Communications
Post by: vince on May 02, 2018, 05:16:31 PM
sorry guys, was a mistake
Title: Re: CHTR - Charter Communications
Post by: cameronfen on May 02, 2018, 05:39:25 PM
@Vince (regarding the copy and pasted forbes article) and others I would be aware of confirmation bias and wanting to be true (charter's competitive advantage) to actually be true.  I dont think anyone can argue that we here know less than the people in the Forbes article about broadband.  They could still be wrong, but its bad investing to dismiss an experts opinion because it disagrees with your thesis.   
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on May 02, 2018, 06:01:36 PM
@Vince (regarding the copy and pasted forbes article) and others I would be aware of confirmation bias and wanting to be true (charter's competitive advantage) to actually be true.  I dont think anyone can argue that we here know less than the people in the Forbes article about broadband.  They could still be wrong, but its bad investing to dismiss an experts opinion because it disagrees with your thesis.   

I would be careful about outsourcing your thinking to "experts". One of the so called "experts" in the article said 15Mbps is all you need for broadband, so that should be the definition of broadband. Does anyone really believe that 15Mbps internet service is competitive today?
Title: Re: CHTR - Charter Communications
Post by: vince on May 02, 2018, 06:04:58 PM
Rysavy: Because a cellular operator with a dense 5G network can provide both fixed and mobile broadband. A cable operator will only have a fixed network. To support handsets, the 5G network will tightly integrate with 4G for coverage. Cable operators don't have that macro 4G network to fall back on.

Bennett: Can’t cable operators build small cells? Nobody has them now.

Rysavy: Yes, cable operators can and will build small cells. But, as mentioned, they can't provide the continuous coverage, especially for mobile devices.

One More TRY, I was just trying to show that they are plain wrong in one exchange because Comcast is up and running with continuous coverage.  So its not because they disagree with my thesis, it is that he is factually wrong about a specific point.  I guess you could argue that comcast was not up and running at the time but if I was a professional being interviewed by Forbes I would be very  sure that what I was saying was factual and trying hard to to dent my credibility
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on May 02, 2018, 06:27:56 PM
@Vince (regarding the copy and pasted forbes article) and others I would be aware of confirmation bias and wanting to be true (charter's competitive advantage) to actually be true.  I dont think anyone can argue that we here know less than the people in the Forbes article about broadband.  They could still be wrong, but its bad investing to dismiss an experts opinion because it disagrees with your thesis.   

I would be careful about outsourcing your thinking to "experts". One of the so called "experts" in the article said 15Mbps is all you need for broadband, so that should be the definition of broadband. Does anyone really believe that 15Mbps internet service is competitive today?

15 Mbps is certainly not enough, you are going to have trouble watching Netflix with it, especially with other devices competing for bandwidth. I don’t think my household is the unusually and I count at least a dozen devices hanging on my wireless network. I think 100 Mbps is the bare minimum now.
Title: Re: CHTR - Charter Communications
Post by: vince on May 02, 2018, 06:35:08 PM
i hope u are right spek cause one concern i do have is our speed advantage isnt as valuable yet. and the quicker that demand for speeds increase the faster and more permanent values accrue to Charter  i get by with 40 mbps, family of 4, with netflix and about 8 devices. 
Title: Re: CHTR - Charter Communications
Post by: vince on May 02, 2018, 06:40:09 PM
Hoping that someone cant point me to some good reading on the past and future growth in broadband speed demand(and capacity as well because the future capex requirements will at some point be more related to capacity limits which is why we see caps i think) and some of the applications that will definitly increase demand
Title: Re: CHTR - Charter Communications
Post by: jgyetzer on May 02, 2018, 07:03:30 PM
Thanks for that post, vince.  This interview seems to reframe the conversation saying that 25Mbps is in excess of what any user could possibly need and therefore 5G broadband could be provided at those speeds on lower bandwidths.  That’s the gist that I’m taking away.  It certainly solves the “mm waves can’t transmit through walls” argument.  This seems to be different from the perspective that the cable companies have taken which is provider higher speed and consumers will find a use and a demand for it.  Does that match what you’re reading here?

Anectodally, my experience has been that “25 Mbps” internet service is often inadequate for fast internet browsing, much less video streaming.  Has anyone else had that experience?
Title: Re: CHTR - Charter Communications
Post by: jgyetzer on May 02, 2018, 07:04:43 PM
A really great way to find out what the service is like is just to test it in one of the early geographies.  Anyone live somewhere where 5G is available as an in-home service?
Title: Re: CHTR - Charter Communications
Post by: cameronfen on May 02, 2018, 07:24:24 PM
@Vince (regarding the copy and pasted forbes article) and others I would be aware of confirmation bias and wanting to be true (charter's competitive advantage) to actually be true.  I dont think anyone can argue that we here know less than the people in the Forbes article about broadband.  They could still be wrong, but its bad investing to dismiss an experts opinion because it disagrees with your thesis.   

I would be careful about outsourcing your thinking to "experts". One of the so called "experts" in the article said 15Mbps is all you need for broadband, so that should be the definition of broadband. Does anyone really believe that 15Mbps internet service is competitive today?

I wouldnt say I'm outsourcing my thinking to experts, but when four people who are basically wireless/cable insiders basically (with maybe half a dissent) agree on something and I'm on the other side of the trade (which I am--I have a small position in charter to incetivize information gathering), I at the very least have to question whether I the patsy at the table.  Obviously not all experts agree, Carlos Slim said on the america movil q1 call that said that 5g is not competitive with cable.  However, instead of outsourcing to experts, maybe research the short thesis (ie like a pre-mortum) before investing.  For example I think a good way is to try it out like jgyetzer suggested above. 

For what its worth I think 4g hotspot on my phone is sufficient for streaming netflix as a consumer, but I also thought video games didn't need better any graphics in like 2008 and that twitter was gratuaitous for example, so I may be on the way low matainence side of the spectrum
Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on May 02, 2018, 07:26:44 PM
Thanks for that post, vince.  This interview seems to reframe the conversation saying that 25Mbps is in excess of what any user could possibly need and therefore 5G broadband could be provided at those speeds on lower bandwidths.  That’s the gist that I’m taking away.  It certainly solves the “mm waves can’t transmit through walls” argument.  This seems to be different from the perspective that the cable companies have taken which is provider higher speed and consumers will find a use and a demand for it.  Does that match what you’re reading here?

Anectodally, my experience has been that “25 Mbps” internet service is often inadequate for fast internet browsing, much less video streaming.  Has anyone else had that experience?

Yes, I have a 200mpbs wired connection straight to my tv and I've found the live OTT apps subpar.  They all buffer switching between channels, and correct me if I'm wrong but they're 720p connections not 1080p.  Maybe the point isn't the speed but the latency and I live in a congested area.  Maybe when people are demanding higher speed, they're actually demanding and getting decent speed and lower latency? 
Title: Re: CHTR - Charter Communications
Post by: vince on May 02, 2018, 07:34:56 PM
Thanks for that post, vince.  This interview seems to reframe the conversation saying that 25Mbps is in excess of what any user could possibly need and therefore 5G broadband could be provided at those speeds on lower bandwidths.  That’s the gist that I’m taking away.  It certainly solves the “mm waves can’t transmit through walls” argument.  This seems to be different from the perspective that the cable companies have taken which is provider higher speed and consumers will find a use and a demand for it.  Does that match what you’re reading here?

Anectodally, my experience has been that “25 Mbps” internet service is often inadequate for fast internet browsing, much less video streaming.  Has anyone else had that experience?

Well its clear the interviewees believe cable is in trouble and they go on to list all the reasons why.  You can be sure of one thing JG and that is there is no way 25 is going to be anywhere near enough.  It can be right now for lots of users but it will change pretty quickly.  My earlier concern was how fast we blow thru 250 cause thats in the range where copper and all its messy solutions top out at (in Europe they are having some success with 100-200 speeds with copper).  So we have a major speed advantage now (and looks like for the next few years) and its relatively capital light, and so this is where lots of customers can be taken.  And the further pressure that is put on speed leverages our advantage to the point of a good performing investment even tho its going to get tougher in the out years imo.  and one other thing to answer your earlier question is that netflix is thriving which is bringing lots of revenue which allows them to invest in more exclusive content.....which attracts more cust...which gives more revs..... which gets better content..... and I think they are doing better than most thought which is putting pressure on video subscriber counts, imo
Title: Re: CHTR - Charter Communications
Post by: jgyetzer on May 02, 2018, 07:35:51 PM
This is a great conversation.  I found this interesting and helpful.  Some of it beyond my technical comprehension, but still good.  What I take from this research is that the existing wired systems are the most practical and economic way to go for most situations to achieve high speed connectivity, but there may be situations where a wireless solution is better.  As to who is best positioned to provide that wireless solution, it’s up for grabs.

https://www.nctatechnicalpapers.com/Paper/2017/2017-can-a-fixed-wireless-last-100m-connection-really-compete-with-a-wired-connection-
Title: Re: CHTR - Charter Communications
Post by: vince on May 02, 2018, 07:39:07 PM
Thanks for that post, vince.  This interview seems to reframe the conversation saying that 25Mbps is in excess of what any user could possibly need and therefore 5G broadband could be provided at those speeds on lower bandwidths.  That’s the gist that I’m taking away.  It certainly solves the “mm waves can’t transmit through walls” argument.  This seems to be different from the perspective that the cable companies have taken which is provider higher speed and consumers will find a use and a demand for it.  Does that match what you’re reading here?

Anectodally, my experience has been that “25 Mbps” internet service is often inadequate for fast internet browsing, much less video streaming.  Has anyone else had that experience?

Ya well unfortunately there are lots of factors that determine speed and latency that sometimes are not related to ur mbps performance.  havent determined if this is a net positive or net negative to providers

Yes, I have a 200mpbs wired connection straight to my tv and I've found the live OTT apps subpar.  They all buffer switching between channels, and correct me if I'm wrong but they're 720p connections not 1080p.  Maybe the point isn't the speed but the latency and I live in a congested area.  Maybe when people are demanding higher speed, they're actually demanding and getting decent speed and lower latency?
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on May 02, 2018, 07:42:04 PM

Does anyone really believe that 15Mbps internet service is competitive today?


Just to clarify, I meant this to be a rhetorical question. Naturally 15 Mbps is way too low for today's customers' broadband needs. I posed it to point out that "experts" opinions can be way off.

I think both speed and latency are important for broadband. High speed gives us the ability for example to play multiple 4K/HD streams at once and latency enables better interactivity whether it is gaming or other apps.
Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on May 02, 2018, 07:43:50 PM
This is a great conversation.  I found this interesting and helpful.  Some of it beyond my technical comprehension, but still good.  What I take from this research is that the existing wired systems are the most practical and economic way to go for most situations to achieve high speed connectivity, but there may be situations where a wireless solution is better.  As to who is best positioned to provide that wireless solution, it’s up for grabs.

https://www.nctatechnicalpapers.com/Paper/2017/2017-can-a-fixed-wireless-last-100m-connection-really-compete-with-a-wired-connection-

Thanks for posting.

At the liberty investor day from last year, they do a pretty good Q&A of this issue too.
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on May 02, 2018, 07:52:58 PM
I think most people will find that they need a better internet connection , once they cut the cord and switch to streaming. I think my 100Mbps minimum speed requirement is about right.

I upgraded to FIOS gigabit after cutting the cord. I bet Verizon makes more money now from our household than they did before, even though our bill is lower.
Title: Re: CHTR - Charter Communications
Post by: longinvestor on May 02, 2018, 08:06:35 PM
Fwiw here’s some data on global broadband speeds and costs.
http://www.websiteoptimization.com/bw/0711/

Same laws of physics apply. The US has some catching up to do. Masa Son has it right in that the duopoly (actually monopoly) in the US keeps us  where we are. They simply dividend away earnings.
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on May 02, 2018, 08:57:35 PM
Fwiw here’s some data on global broadband speeds and costs.
http://www.websiteoptimization.com/bw/0711/

Same laws of physics apply. The US has some catching up to do. Masa Son has it right in that the duopoly (actually monopoly) in the US keeps us  where we are. They simply dividend away earnings.

The data shown in the link is from 2007, thus not very relevant to present time. In addition the US is very different geographically when compared to Japan for instance, where population densities are much higher. It takes a lot more capital to provide high speed access to a suburban or rural neighborhood than a tall apartment building on a per customer basis.
Title: Re: CHTR - Charter Communications
Post by: gokou3 on May 02, 2018, 09:58:19 PM
For those of you in the US who has a "X" Mbps broadband connection, do you usually get close to "X" Mbps or a lower speed?  Which provider / service do you use?

I use DSL here in Canada from Telus (telco) and they can usually provide their advertised speed (based on speedtest.net results).  I haven't used cable broadband for a while but the last I used it I didn't get close to the advertised speed.
Title: Re: CHTR - Charter Communications
Post by: longinvestor on May 03, 2018, 04:53:36 AM
Fwiw here’s some data on global broadband speeds and costs.
http://www.websiteoptimization.com/bw/0711/

Same laws of physics apply. The US has some catching up to do. Masa Son has it right in that the duopoly (actually monopoly) in the US keeps us  where we are. They simply dividend away earnings.

The data shown in the link is from 2007, thus not very relevant to present time. In addition the US is very different geographically when compared to Japan for instance, where population densities are much higher. It takes a lot more capital to provide high speed access to a suburban or rural neighborhood than a tall apartment building on a per customer basis.
We will see when S / T Mobile merger goes through. Masa is chomping on the bit to pull off a 100 year disruption of telecom just as he’s done in Japan. Unless of course if the incumbents  lobby the merger away like they did the last time.

Title: Re: CHTR - Charter Communications
Post by: oddballstocks on May 03, 2018, 06:03:56 AM
Bandwidth latency...

Seems like there is a lot of confusion, where people are equating bandwidth to speed.

Think of this like a highway.  The "mbps" or "gbps" is how wide the highway is, that is how many simultaneous cars can be packed onto the road at once.

Latency is how fast those cars are moving.  A narrower highway at a high speed can move more information compared to a wide slow speed highway.

Netflix will work perfectly fine over 15Mbps, according to Netflix you can have 10 simultaneous streams open at this speed at normal speed, or 3x streams at HD quality.

There are other variables at play as well, the transport medium (copper or fiber), and distance.  Cable uses copper and has a natural speed ceiling.  This is because as the bandwidth increases the power requirement to move that data.  Compare the power per port for a 10GBase-T connection vs a 10Gbe using SPF+.  10Gbase-T (10Gbps using traditional Ethernet cable) is mostly a DOA product in the enterprise because the power requirements don't make it cost effective.

When you're forcing a ton of power onto a copper line it increases cross-talk, that means two wires next to each other can interrupt and cause data errors.  Ethernet handles these errors by re-sending packets, but if you are re-sending a lot of packets it lowers your speed.

Fiber doesn't have these problems, fiber is cabling made of small glass strands that move data at the speed of light.  Fiber cables are limited by the transceivers at each end of the cable, and the switches used.  For example if you lay a 10km fiber cable and have a 1Gbps switch with 1Gbps transceivers and in 10 years you want to move to 25Gbps all you need to do is upgrade the switches and endpoints, the cable is fine.  A single fiber maxes out at 1 Petabit per second, which is 1,000 terabits per second, or 10,000 Gbps.

The reason people are going higher and higher at home is because providers underprovision the network.  That is they might have a 10Gbps pipe that they resell to 100 or more customers at 1Gbps.  The ISP will then apply QoS and shaping to traffic flows so it 'seems' fast enough.  The idea is not everyone is saturating their connection at the same time.  While one person might be using 1Gbps, another might be surfing Facebook and pulling 2Mbps.  Sometimes the division is even more extreme.

If you ever work with enterprise connections you'll be shocked at how fast a small amount of bandwidth works, and that's because it isn't divided up like that.  We have a co-location with 100Mbps of dedicated bandwidth.  There is a 100Mbps block that's 100% reserved for us.  We're next to Zayo's switches, so there's little latency, but EVERYTHING is blazing fast there, we have no competition.

The second item on speed is distance.  The further you are from the switch the slower your connection.  Both copper and fiber employ repeaters to boost the signal.

What you see in the residential market is a lot of people sharing the same uplink connection, and in most cases it works out fine.  And to compensate for the increased latency providers increase the pipe size to squeeze more data through at the same time with higher latency.

For reference you can buy a 10Gbps fiber drop for ~$5,000/mo.  The colo we're at has three fiber termination points and each fiber run is 300Gbps, so slightly less than 1Tbps.

Oh, the other factor in speed is device speed.  This is where providers have an enormous advantage.  You're limited on how much data you can consume by your bandwidth, and also your disk speed.  A consumer computer with a spinning disk (which is probably 60% of computers) is going to get 150MB/s in a sequential read, maybe 120MB/s in a sequential write.  That's about 1Gbps.  If you're uploading a giant file you can potentially saturate a 1Gbps connetion.  But if you're doing a random read or write you're down in the 5-10MB/s range, which is in the 80Mbps range.  Remember there are eight bits to a byte.

Most web pages are a few megabytes, they require little bandwidth.  Streaming HD to a giant screen is probably the largest consumer of bandwidth.  But there are compression algos that help with that.  Also video is naturally limited, you can only consume what your mind can comprehend at once.  I.e. humans can see about 1,000 fps, but static scenes you need 30fps, it makes no sense to send 300fps, there'd be no discernable difference.

I just ran a speed test, we pay for 50/50, I pulled 56/42 with 45ms of latency.  For comparison I ran a speed test from one of our servers, latency between 3ms and 10ms and right around 100/100 on a 100/100 connection.
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 03, 2018, 07:10:44 AM
Quote
Couldn't range on 5G still be better than wifi because the transmission power will be higher?

Power may make some difference on the edges but not much if the access point antenna is omnidirectional and there are significant obstructions like walls. You can test this by increasing the power on your Wifi router. I tested it: bought an external amplifier and jacked up the power output of my Wifi router antenna and it made almost no difference to the Wifi range.

Isn't this because the device you were using with the wifi wasn't specced to also be higher power?
Title: Re: CHTR - Charter Communications
Post by: vince on May 03, 2018, 07:40:05 AM
This clip is from April 24/2018 summary of Verizons 1st qtr results. 

It’s an obvious strategy for a company whose wireless segment is thriving in part because it is delivering more and more video on its wireless networks, but often overlooked is that wireless networks have never been entirely wireless. There is an absolute necessity for any wireless network to eventually connect to a wireline network. Wireless companies need to either expand their wireline networks to support the expansion of their wireless networks (a need that will become ever more acute with the evolution to 5G), or turn to erstwhile competitors for wireline network connectivity. Furthermore, “erstwhile” competitors are still competitors.

These considerations are beginning to be overt sources of concern.

A research note from New Street Research read, “We remain cautious on VZ given the company’s significant capacity gap relative to peers, and the ongoing threat of cable entry into wireless. We suspect that the company’s recent push into 5G fixed wireless broadband (FWB) is driven by a need to densify for the core wireless LTE business. A fiber deployment to support just a FWB business case would cost $35BN in capex; adding mobile wireless equipment to the deployment would push the cost higher. More importantly, CMCSA will start taking share at a much faster pace later this year; we expect them to double net adds by fourth-quarter 2018; and Charter will follow close on their heels.”
Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on May 03, 2018, 11:55:50 AM
Bandwidth latency...

Seems like there is a lot of confusion, where people are equating bandwidth to speed.

Think of this like a highway.  The "mbps" or "gbps" is how wide the highway is, that is how many simultaneous cars can be packed onto the road at once.

Latency is how fast those cars are moving.  A narrower highway at a high speed can move more information compared to a wide slow speed highway.

Netflix will work perfectly fine over 15Mbps, according to Netflix you can have 10 simultaneous streams open at this speed at normal speed, or 3x streams at HD quality.

There are other variables at play as well, the transport medium (copper or fiber), and distance.  Cable uses copper and has a natural speed ceiling.  This is because as the bandwidth increases the power requirement to move that data.  Compare the power per port for a 10GBase-T connection vs a 10Gbe using SPF+.  10Gbase-T (10Gbps using traditional Ethernet cable) is mostly a DOA product in the enterprise because the power requirements don't make it cost effective.

When you're forcing a ton of power onto a copper line it increases cross-talk, that means two wires next to each other can interrupt and cause data errors.  Ethernet handles these errors by re-sending packets, but if you are re-sending a lot of packets it lowers your speed.

Fiber doesn't have these problems, fiber is cabling made of small glass strands that move data at the speed of light.  Fiber cables are limited by the transceivers at each end of the cable, and the switches used.  For example if you lay a 10km fiber cable and have a 1Gbps switch with 1Gbps transceivers and in 10 years you want to move to 25Gbps all you need to do is upgrade the switches and endpoints, the cable is fine.  A single fiber maxes out at 1 Petabit per second, which is 1,000 terabits per second, or 10,000 Gbps.

The reason people are going higher and higher at home is because providers underprovision the network.  That is they might have a 10Gbps pipe that they resell to 100 or more customers at 1Gbps.  The ISP will then apply QoS and shaping to traffic flows so it 'seems' fast enough.  The idea is not everyone is saturating their connection at the same time.  While one person might be using 1Gbps, another might be surfing Facebook and pulling 2Mbps.  Sometimes the division is even more extreme.

If you ever work with enterprise connections you'll be shocked at how fast a small amount of bandwidth works, and that's because it isn't divided up like that.  We have a co-location with 100Mbps of dedicated bandwidth.  There is a 100Mbps block that's 100% reserved for us.  We're next to Zayo's switches, so there's little latency, but EVERYTHING is blazing fast there, we have no competition.

The second item on speed is distance.  The further you are from the switch the slower your connection.  Both copper and fiber employ repeaters to boost the signal.

What you see in the residential market is a lot of people sharing the same uplink connection, and in most cases it works out fine.  And to compensate for the increased latency providers increase the pipe size to squeeze more data through at the same time with higher latency.

For reference you can buy a 10Gbps fiber drop for ~$5,000/mo.  The colo we're at has three fiber termination points and each fiber run is 300Gbps, so slightly less than 1Tbps.

Oh, the other factor in speed is device speed.  This is where providers have an enormous advantage.  You're limited on how much data you can consume by your bandwidth, and also your disk speed.  A consumer computer with a spinning disk (which is probably 60% of computers) is going to get 150MB/s in a sequential read, maybe 120MB/s in a sequential write.  That's about 1Gbps.  If you're uploading a giant file you can potentially saturate a 1Gbps connetion.  But if you're doing a random read or write you're down in the 5-10MB/s range, which is in the 80Mbps range.  Remember there are eight bits to a byte.

Most web pages are a few megabytes, they require little bandwidth.  Streaming HD to a giant screen is probably the largest consumer of bandwidth.  But there are compression algos that help with that.  Also video is naturally limited, you can only consume what your mind can comprehend at once.  I.e. humans can see about 1,000 fps, but static scenes you need 30fps, it makes no sense to send 300fps, there'd be no discernable difference.

I just ran a speed test, we pay for 50/50, I pulled 56/42 with 45ms of latency.  For comparison I ran a speed test from one of our servers, latency between 3ms and 10ms and right around 100/100 on a 100/100 connection.

awesome post oddball ..thank you for putting it in English.  What's your takeaway on the feasibility and cost of Telco's being able to provide high speed all you can consume cellular? 
Title: Re: CHTR - Charter Communications
Post by: LongTermView on May 03, 2018, 02:49:26 PM
Fwiw here’s some data on global broadband speeds and costs.
http://www.websiteoptimization.com/bw/0711/
I like these charts from 2007. Do we have any from more recent years? Is Japan still way ahead with the average advertised broadband download speed?
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on May 03, 2018, 04:43:57 PM

Isn't this because the device you were using with the wifi wasn't specced to also be higher power?

It is possible. My understanding of the RF propagation is that wavelength has a much bigger effect in terms of penetrating walls and obstructions than transmit power.
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on May 03, 2018, 05:56:12 PM

Isn't this because the device you were using with the wifi wasn't specced to also be higher power?

It is possible. My understanding of the RF propagation is that wavelength has a much bigger effect in terms of penetrating walls and obstructions than transmit power.

That is correct. At some point, you have to have enough power to burn holes through wall to get wave propagation  8)
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 03, 2018, 06:32:57 PM

Isn't this because the device you were using with the wifi wasn't specced to also be higher power?

It is possible. My understanding of the RF propagation is that wavelength has a much bigger effect in terms of penetrating walls and obstructions than transmit power.

Sure, but what I mean is if you have a router and a smartphone that are specced to work together, they'll both transmit at about the same power and propagate over about the same distances, right? So if you boost one of the two (the router) without boosting the power of the smartphone, you won't get all the gains because while the smartphone might be able to receive the router better, the router won't be able to receive the smartphone better and for the connection to be stable and fast, you need both sides to be clear, not just one.

That's how I picture it, anyway. Am not a RF guy, so am happy to be shown why I'm wrong.
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on May 03, 2018, 07:59:27 PM
Quote
Sure, but what I mean is if you have a router and a smartphone that are specced to work together, they'll both transmit at about the same power and propagate over about the same distances, right? So if you boost one of the two (the router) without boosting the power of the smartphone, you won't get all the gains because while the smartphone might be able to receive the router better, the router won't be able to receive the smartphone better and for the connection to be stable and fast, you need both sides to be clear, not just one.

That's how I picture it, anyway. Am not a RF guy, so am happy to be shown why I'm wrong.

I believe you are correct in that ideally you need to increase power on both sides of the link. 5G CPE for fixed wireless will be plugged into the wall but not 5G mobile devices.
Title: Re: CHTR - Charter Communications
Post by: walkie518 on May 04, 2018, 09:09:54 AM

Isn't this because the device you were using with the wifi wasn't specced to also be higher power?

It is possible. My understanding of the RF propagation is that wavelength has a much bigger effect in terms of penetrating walls and obstructions than transmit power.

Sure, but what I mean is if you have a router and a smartphone that are specced to work together, they'll both transmit at about the same power and propagate over about the same distances, right? So if you boost one of the two (the router) without boosting the power of the smartphone, you won't get all the gains because while the smartphone might be able to receive the router better, the router won't be able to receive the smartphone better and for the connection to be stable and fast, you need both sides to be clear, not just one.

That's how I picture it, anyway. Am not a RF guy, so am happy to be shown why I'm wrong.

Full Duplex Docsis will address this issue...
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 05, 2018, 06:48:24 AM

Isn't this because the device you were using with the wifi wasn't specced to also be higher power?

It is possible. My understanding of the RF propagation is that wavelength has a much bigger effect in terms of penetrating walls and obstructions than transmit power.

Sure, but what I mean is if you have a router and a smartphone that are specced to work together, they'll both transmit at about the same power and propagate over about the same distances, right? So if you boost one of the two (the router) without boosting the power of the smartphone, you won't get all the gains because while the smartphone might be able to receive the router better, the router won't be able to receive the smartphone better and for the connection to be stable and fast, you need both sides to be clear, not just one.

That's how I picture it, anyway. Am not a RF guy, so am happy to be shown why I'm wrong.

Full Duplex Docsis will address this issue...

I believe it's a completely different thing than what I was talking about, unless I'm missing something.

Full duplex docsis is a spec for better using cable bandwidth (reaching 10gbs and symmetrical ul/dl), I'm talking about how wireless transmission power needs to be specced together to get the most benefit (can't just increase power on one side and not on the other).
Title: Re: CHTR - Charter Communications
Post by: walkie518 on May 07, 2018, 11:41:48 AM

Isn't this because the device you were using with the wifi wasn't specced to also be higher power?

It is possible. My understanding of the RF propagation is that wavelength has a much bigger effect in terms of penetrating walls and obstructions than transmit power.

Sure, but what I mean is if you have a router and a smartphone that are specced to work together, they'll both transmit at about the same power and propagate over about the same distances, right? So if you boost one of the two (the router) without boosting the power of the smartphone, you won't get all the gains because while the smartphone might be able to receive the router better, the router won't be able to receive the smartphone better and for the connection to be stable and fast, you need both sides to be clear, not just one.

That's how I picture it, anyway. Am not a RF guy, so am happy to be shown why I'm wrong.

Full Duplex Docsis will address this issue...

I believe it's a completely different thing than what I was talking about, unless I'm missing something.

Full duplex docsis is a spec for better using cable bandwidth (reaching 10gbs and symmetrical ul/dl), I'm talking about how wireless transmission power needs to be specced together to get the most benefit (can't just increase power on one side and not on the other).

My understanding is that telcos have to build-out 5G, but cable companies can leverage full duplex docsis and other technologies to implement the same short-wave communication technologies. 

Full duplex docsis should allow for coax cable to reach fiber speeds, and the coax lines should also have the added benefit of providing more power than what one finds w/fiber. 

I think it's likely Comcast and Charter use the same wireless routers currently in the home as the device to which one has a 5G connection. 

Where Comcast and Charter do not offer 5G service is where there is no such nearby small cell, from there via the MVNOs, Verizon is tasked with picking up the slack? 
Title: Re: CHTR - Charter Communications
Post by: zippy1 on May 08, 2018, 03:31:38 PM
Oh, No!
https://www.reuters.com/article/us-fox-m-a-comcast-exclusive/exclusive-comcast-prepares-all-cash-bid-to-gate-crash-disney-fox-deal-sources-idUSKBN1I82I7 (https://www.reuters.com/article/us-fox-m-a-comcast-exclusive/exclusive-comcast-prepares-all-cash-bid-to-gate-crash-disney-fox-deal-sources-idUSKBN1I82I7)
Quote
U.S. cable operator Comcast Corp is asking investment banks to increase a bridge financing facility by as much as $60 billion so it can make an all-cash offer for the media assets that Twenty-First Century Fox Inc has agreed to sell to Walt Disney Co for $52 billion, three people familiar with the matter said on Monday.
Quote
Comcast Chief Executive Brian Roberts only plans to proceed with the bid if a federal judge allows AT&T Inc’s planned $85 billion acquisition of Time Warner Inc to proceed, the sources said. The U.S. Department of Justice has opposed the AT&T-Time Warner deal over antitrust concerns, and a decision from U.S. District Court Judge Richard Leon is expected in June.
Quote
Last November, Comcast offered to acquire most of Fox’s assets in an all-stock deal valued at $34.41 per share, or $64 billion, a regulatory filing showed last month. Like Disney, Comcast sought to buy Fox’s entertainment networks, movie studios, television production and international assets, the filing shows.

Fox ended up announcing an all-stock deal with Disney for $29.54 per share. In the regulatory filing, Disney and Fox cited regulatory hurdles as reasons to reject Comcast’s bid, even though they did not reference it by name.
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 14, 2018, 10:17:02 AM
https://www.prnewswire.com/news-releases/spectrum-enterprise-to-invest-1-billion-to-increase-the-density-of-its-national-fiber-network-and-transform-its-approach-to-the-client-experience-300647801.html

Quote
Spectrum Enterprise, a part of Charter Communications (NASDAQ: CHTR), today announced that in 2018, it will invest more than one billion dollars (U.S.) in new fiber infrastructure to increase the density of its national fiber network and to deploy new tools, training and resources required to provide a differentiated client experience. This year will be the second consecutive year in which Charter has invested in excess of $1 billion exclusively in Spectrum Enterprise.

The one billion dollar investment will primarily fund increased client access to the existing Spectrum Enterprise national fiber network, adding to the network's nearly 200,000 fiber-lit buildings.  The majority of the new fiber will be constructed within the existing Spectrum Enterprise national footprint.  With a key focus on removing barriers for businesses, Spectrum Enterprise will absorb the upfront costs of fiber construction for the majority of new enterprise clients within its footprint in order to provide more businesses with access to fiber-based solutions such as Fiber Internet Access, Ethernet and voice trunks (SIP/PRI). 
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on May 14, 2018, 02:58:25 PM
Growth capex or maintenance capex or both? :)

Title: Re: CHTR - Charter Communications
Post by: chesko182 on May 14, 2018, 04:23:35 PM
This thread has been extremely informative in understanding the investment thesis of Charter.

I am working on a basic financial model and wanted to see how you guys treated the amortization of intangibles, specifically customer relationships that I understand where created as a balance sheet item post TWC/BH acquisitions. This was a large expense in 2017, approx $2.7bn.

Do you treat this as an actual economic expense or exclude it given it's "merger-debris"? If you exclude it then I would suppose customer relationships do not go into the invested capital calculation either, similar to goodwill?

I am trying to come up with CHTR's ROIC and this is throwing me off a little.

Any comments would be appreciated.

Thanks
Title: Re: CHTR - Charter Communications
Post by: vince on May 14, 2018, 05:27:31 PM
This thread has been extremely informative in understanding the investment thesis of Charter.

I am working on a basic financial model and wanted to see how you guys treated the amortization of intangibles, specifically customer relationships that I understand where created as a balance sheet item post TWC/BH acquisitions. This was a large expense in 2017, approx $2.7bn.

Do you treat this as an actual economic expense or exclude it given it's "merger-debris"? If you exclude it then I would suppose customer relationships do not go into the invested capital calculation either, similar to goodwill?

I am trying to come up with CHTR's ROIC and this is throwing me off a little.

Any comments would be appreciated.

Thanks

Imo you should count the asset to determine the historic ROIC.  You should ignore the amortization when trying to figure out economic earnings.  And finally, you should exclude the asset when trying to calculate Return On Net Tangible Assets which in my opinion gives you a better indicator of future returns, all else equal.
Title: Re: CHTR - Charter Communications
Post by: walkie518 on May 14, 2018, 05:28:28 PM
This thread has been extremely informative in understanding the investment thesis of Charter.

I am working on a basic financial model and wanted to see how you guys treated the amortization of intangibles, specifically customer relationships that I understand where created as a balance sheet item post TWC/BH acquisitions. This was a large expense in 2017, approx $2.7bn.

Do you treat this as an actual economic expense or exclude it given it's "merger-debris"? If you exclude it then I would suppose customer relationships do not go into the invested capital calculation either, similar to goodwill?

I am trying to come up with CHTR's ROIC and this is throwing me off a little.

Any comments would be appreciated.

Thanks

I apologize for not answering your question, but I can't stop thinking about these and other questions.  I think Charter is incredibly cheap here, but the reasons might carry an equal amount of quantitative and qualitative analysis...maybe it helps to show my thinking? Selfishly, maybe it helps me more?

I started my thinking on Charter's balance sheet.  What's there and what's missing from the figures.   

What would someone of right, sound mind, independent from the cable business pay for these assets?  Important as an exercise but meaningless in practicum since neither Rutledge nor Malone appear to want to settle for a quick and fast deal to make a few bucks. 

Back to the balance sheet: what would the cost be to recreate those assets?  What would the cost be to recreate the employee-base as well as lay all the cable?  What's the value of the NOL? 

What would someone pay for Charter if there were material synergies?  Which companies are deemed "players" in the acquisition game and how might the landscape change to accommodate others?

How much of Malone's and/or Rutledge's histories do we see repeating?  How much does scale matter in the thesis and what levers can and will be pulled in the coming three to five years?  Where does this factor into the figures?  Do we disregard because it might not show up?  I would argue that there are real patterns in this business and in Malone's past...

We can look at historical cash flows from operations and assume that future cash flows will grow at a commensurate rate, but how do you value the emergent businesses like mobile that have more promise than is given credit?  Do we look to Comcast's performance and map over Charter?  What if Comcast flops and Charter succeeds?  (I think it's most likely both succeed in mobile).

How much spread does Malone and Rutledge create over cost of capital over the next five or ten years? 

How have historical cash flow growth measured against Cablevision's under Rutledge over longer periods of time? 

The difference and/or any historical acceleration or deceleration might give insight, but it's arguable that Charter is in fairly early-innings. 

Other questions that may not point to a quantitative figure but have subjective value: Why did Rutledge take this job?  Money or more points on the board? 

Why is Malone so involved at this age and what value does he bring as a shareholder-centric manager? 

At times, Malone's investment approach is somewhat callous and careless when it comes to short-term volatility.  On the flip side, does this take away any value when he trades volatility and perceived risk for long-term appreciation? 
Title: Re: CHTR - Charter Communications
Post by: bathtime on May 14, 2018, 11:36:10 PM
Given that I've read some criticism of the share performance of Malone's companies during the last recession, I'm also curious what the perceived margin of safety is in CHTR. I distinguish the equity from the business here as factors such as liquidity, controlling shareholder, ownership, etc., can come to the forefront in market pullbacks.

I've appreciated and been convinced of the value argument for CHTR here, so I'm stress-testing my dominant perspective, so to speak, given what I perceive as the likelihood of an eventual significant market pullback.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on May 15, 2018, 12:47:05 AM
Considering all of Malone's vehicles, I think 'broadband delivery'/cable is the most recession proof and utility like, the other ones are consumer discretionary, entertainment, some real estate, content, which are likely to underperform the average drop in those 1/3 to 1/4 of years that there is a major contraction.

Regarding ROIC, I would want to know in which direction the profits are heading. One has 'targets' but will the market allow them to be achieved. In the case of cable, you do have a few moaty advantages. The first is the duopoly or triopoly structure in a delineated, but large market. You have a semi-utility like structure where you promise to do capex in exchange for a reasonable return. The question is - do cable co's have pricing power to maintain a 15% ROIC or is the government allowing them a determined return if they behave nice (similar to an electric utility)? If the return has an upper limit, what is that number?  Then there is nobody stopping you from developing other forms of 'alternative energy' - in this case, 'alternative connectivity'. Will it happen? Maybe yes, maybe no. I see lots of disruption in many fields. Personally, I chose CHTR over KHC because I feel food brands are being diluted at a fast pace, the moat is eroding quite fast. I think a utility of connectivity has somewhat higher moat value than brands , but I don't know how long that will last either.

Maffei said capex would be elevated for Charter in Q2 as well (on the GLIBA conference call) and then dissipate in the latter half of the year.

Perhaps broadband connectivity is an old world moat in a fast changing world. I've had an eye on bioservices and biologic technology stocks and can see they are really richly priced. I can see the reasoning too...in a fast changing world, where are the new potential moats? On the other hand, when the dust settles, it's not always clear who the winners will be. There are sharks biting at distribution too...Usually involving non-linear, direct to consumer channels, digital vs analog. One should keep an eye open for developments in connectivity costs, systems, and alternatives and regulatory systems.






Title: Re: CHTR - Charter Communications
Post by: CorpRaider on May 15, 2018, 09:55:50 AM
Lowel McAdam says Verizon is planning on building their 5G network with the terminus 2000 meters from the home and foliage and weather are not impactful.

https://www.youtube.com/watch?v=lYAufhIgkpI
Title: Re: CHTR - Charter Communications
Post by: jmp8822 on May 15, 2018, 10:24:14 AM
Lowel McAdam says Verizon is planning on building their 5G network with the terminus 2000 meters from the home and foliage and weather are not impactful.

https://www.youtube.com/watch?v=lYAufhIgkpI

Great interview - thanks for posting.  Sounds like there will be a lot of exciting things coming for consumers, coupled with risks/opportunities for businesses.  I wouldn't want to be a 2nd/3rd broadband choice with 5G coming possibly as a home alternative to cable internet.
Title: Re: CHTR - Charter Communications
Post by: dwy000 on May 15, 2018, 11:52:24 AM
Would Charter and Comcast's MVNO agreement with Verizon cover 5G?  Is there a possibility that Charter/Comcast could use Verizon's own buildout to compete with themselves?
Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on May 17, 2018, 08:46:28 AM
Lowel McAdam says Verizon is planning on building their 5G network with the terminus 2000 meters from the home and foliage and weather are not impactful.

https://www.youtube.com/watch?v=lYAufhIgkpI

Great interview - thanks for posting.  Sounds like there will be a lot of exciting things coming for consumers, coupled with risks/opportunities for businesses.  I wouldn't want to be a 2nd/3rd broadband choice with 5G coming possibly as a home alternative to cable internet.

thanks for posting. Though it's a slow moving train, I'm slightly nervous about my GLIBA position in 3-4 years. Maybe we need to call Masa...  though the future is murky obviously, there is a not insignificant chance that this could be the satellite threat from the 90s all over again.
Title: Re: CHTR - Charter Communications
Post by: chrispy on May 17, 2018, 09:47:02 AM
The Charter website has posted the webcast from an interview with Charter's CFO at this weeks JPM conference.  Towards the end of the interview they discuss 5G and he states how there are still line of sight issues and that all of the test locations by Verizon are in ideal dense urban environments.  Applying 5G elsewhere will be much more difficult and require cable's infrastructure.  My takeaway is that Charter and Verizon are expressing much different views on how straight forward implementing 5G is going to be.  Only time will tell.

Also, at the beginning of the interview Charter's CFO dived further into the loss of no-pay customers.  I listened to it a few days ago but here is what I recall:  During the billing integration Charter failed to have new low credit customers put up a down payment which is normal practice.  Once this was uncovered, these customers were terminated and that is the reason for the large blip in the quarterly results.  It is now corrected. 
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on May 17, 2018, 09:53:24 AM
There are two short clips from maffei last year where he is also skeptical, saying 5g will require spectrum or alliance with backhaul providers. I see this very much as a story similar to oil, coal and alternative sources. In the end it's just connectivity. There are the land owners (spectrum), the developers and the tenants. Sometimes owners and developers are one...either way a utility will provide utility like returns plus alpha from smart mergers and operation.
Title: Re: CHTR - Charter Communications
Post by: jgyetzer on May 17, 2018, 09:58:27 AM
Even if it all works exactly as brilliantly as the wireless companies claim, they will all be competing on price and have an interest in getting their own network built as quickly and cheaply as possible. How much is Charter then worth to any of those players as opposed to a slow, expensive build-out.
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 17, 2018, 10:20:10 AM
There's been two interesting Charter presentations a couple days ago, one by Tom Rutledge and the other by Chris Winfrey (CFO).

One of Rutledge's lines was interesting. He said he didn't think spectrum was worth as much as others thought, partly because some low-cost or no-cost spectrum was becoming available soon (not sure on the details of that, maybe more white space being freed up soon?), but also because at very high frequencies, you need to be a lot closer, and with small cells, you can re-use the same spectrum over and over again more easily than with large cells without the interference.
Title: Re: CHTR - Charter Communications
Post by: dutchman on May 17, 2018, 10:30:02 AM
liberty where can we access these presentations? wood u have a link?  thank u
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 17, 2018, 11:48:55 AM
liberty where can we access these presentations? wood u have a link?  thank u

They're on Charter's investor relations site, May 14 and 15.
Title: Re: CHTR - Charter Communications
Post by: rogermunibond on May 17, 2018, 11:53:58 AM
I think would Rutledge is talking about is the 4G LTE/5G MIMO antenna installations which use spectrum much more efficiently.

The FCC under Pai is moving fast on 5G spectrum auctions.  28 Ghz and 24 Ghz in November 2018.

It's made Charlie Ergen's spectrum considerably less appealing.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on May 17, 2018, 04:51:56 PM
It seems to me the mobile phone is the only additional element here. At home or work you would be able to use either when 5G is out...On the move you could use 5G...You wouldn't need 2 services. So maybe instead of buying all this stock back, cable should figure out how they will keep the customer on the road and at home, either via mobile partnership or buying a 5G network. It will cost alot of money so they will need to build a war chest. On the other hand, will they be allowed to buy a mobile network in terms of anti-trust? If not, then regulators will have signed a slow decline of cable if 5G takes off and consumers cut not only the cord but the broadband-at-home too. Backhaul will obviously be a smaller profit center in the worst case. I don't think the argument that backhaul is needed is a position cable cos want to take as they would just be even more commoditized. An alternative may be found to bypass even this function eventually. I've seen some estimates CHTR could be earning $40/share by 2020-2021. That would be 6-7x earnings. Even in a declining scenario you can imagine some positive annual return, but it always helps not to be in a business with headwinds or declining. It's not yet time to worry about this. But keep an eye on the total performance to see what the market believes - rightly or not, it has been spooked by something.
Title: Re: CHTR - Charter Communications
Post by: CorpRaider on May 17, 2018, 06:46:47 PM
Lowel McAdam says Verizon is planning on building their 5G network with the terminus 2000 meters from the home and foliage and weather are not impactful.

https://www.youtube.com/watch?v=lYAufhIgkpI

Great interview - thanks for posting.  Sounds like there will be a lot of exciting things coming for consumers, coupled with risks/opportunities for businesses.  I wouldn't want to be a 2nd/3rd broadband choice with 5G coming possibly as a home alternative to cable internet.

thanks for posting. Though it's a slow moving train, I'm slightly nervous about my GLIBA position in 3-4 years. Maybe we need to call Masa...  though the future is murky obviously, there is a not insignificant chance that this could be the satellite threat from the 90s all over again.

Sure thing.  Yeah, my crystal ball is cloudy. 
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 20, 2018, 04:12:48 AM
Eyeballing it, it looks like Advanced Newhouse  tendered 1.86% of its take back into the buyback.

https://www.sec.gov/Archives/edgar/data/914545/000089924318013385/xslF345X03/doc4.xml
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on May 20, 2018, 11:58:21 AM
Eyeballing it, it looks like Advanced Newhouse  tendered 1.86% of its take back into the buyback.

https://www.sec.gov/Archives/edgar/data/914545/000089924318013385/xslF345X03/doc4.xml

Did they have to do this for the ATT dealio?
Title: Re: CHTR - Charter Communications
Post by: jgyetzer on May 20, 2018, 02:03:58 PM
Am I remembering correctly that because of an agreement to maintain equal ownership level with A/N that Charter likely bought in 1.86% of total shares as well?
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 21, 2018, 04:01:00 AM
Am I remembering correctly that because of an agreement to maintain equal ownership level with A/N that Charter likely bought in 1.86% of total shares as well?

See this here: http://www.yetanothervalueblog.com/2017/10/still-bullish-on-charter-chtr.html
Title: Re: CHTR - Charter Communications
Post by: jgyetzer on May 21, 2018, 07:05:42 AM
Right. To me this suggests they have re-accelerated the rate of repurchases.
Title: Re: CHTR - Charter Communications
Post by: wabuffo on May 21, 2018, 09:33:40 AM
https://seekingalpha.com/article/4171990-altice-usas-atus-ceo-dexter-goei-q1-2018-results-earnings-call-transcript?part=single (https://seekingalpha.com/article/4171990-altice-usas-atus-ceo-dexter-goei-q1-2018-results-earnings-call-transcript?part=single)

Altice USA CEO throwing some shade at Charter's & Rutledge's billing/disconnect problem and contrasting the two companies' approach to billing systems integration...  Very interesting.

Quote
Dexter Goei
Well, we currently have two billing systems on the B2B side, one our Suddenlink and one at Optimum, and very similar one in each over at - on the B2C side. So we are going to be integrating those billing systems into one single billing system on the B2C side and, simultaneously, also doing one single billing system on the B2B side.

Marci Ryvicker:
...And I only ask because we saw a lot of messiness in Charter's numbers as they went from a bunch of billing systems to smaller billing systems.

Dexter Goei:
... as I understand that's what our friends over at Charter have done was to not necessarily merge into a single platform, but to effectively put a wrapper, a billing system on top of their legacy billing systems. So I think they're not necessarily reducing the amount of billing systems, I think they're increasing the number of billing systems they have.

And I think our view is and our experience historically was to merge the two whenever we go into integration and restructuring processes. We are - we've done this many, many times over. We're going to be extremely cautious about it, but we definitely don't want to do something maybe in a gray area. And I think I'm sure that our friends over at Charter have a reason for doing the way they did - they're doing it. But in our experience, we need to go the whole way on this. But we've done this many, many times over, and we feel good about our ability to do this. It's not without risk, obviously. And by the way, it's not just a telecoms-related issue, it's a related issue with all IT platforms across the board in all businesses. But we feel like we've got the tools, the people and the experience here to be able to deliver something here as seamless as possible.

wabuffo
Title: Re: CHTR - Charter Communications
Post by: vince on May 21, 2018, 10:48:59 AM
https://seekingalpha.com/article/4171990-altice-usas-atus-ceo-dexter-goei-q1-2018-results-earnings-call-transcript?part=single (https://seekingalpha.com/article/4171990-altice-usas-atus-ceo-dexter-goei-q1-2018-results-earnings-call-transcript?part=single)

Altice USA CEO throwing some shade at Charter's & Rutledge's billing/disconnect problem and contrasting the two companies' approach to billing systems integration...  Very interesting.

Quote
Dexter Goei
Well, we currently have two billing systems on the B2B side, one our Suddenlink and one at Optimum, and very similar one in each over at - on the B2C side. So we are going to be integrating those billing systems into one single billing system on the B2C side and, simultaneously, also doing one single billing system on the B2B side.

Marci Ryvicker:
...And I only ask because we saw a lot of messiness in Charter's numbers as they went from a bunch of billing systems to smaller billing systems.

Dexter Goei:
... as I understand that's what our friends over at Charter have done was to not necessarily merge into a single platform, but to effectively put a wrapper, a billing system on top of their legacy billing systems. So I think they're not necessarily reducing the amount of billing systems, I think they're increasing the number of billing systems they have.

And I think our view is and our experience historically was to merge the two whenever we go into integration and restructuring processes. We are - we've done this many, many times over. We're going to be extremely cautious about it, but we definitely don't want to do something maybe in a gray area. And I think I'm sure that our friends over at Charter have a reason for doing the way they did - they're doing it. But in our experience, we need to go the whole way on this. But we've done this many, many times over, and we feel good about our ability to do this. It's not without risk, obviously. And by the way, it's not just a telecoms-related issue, it's a related issue with all IT platforms across the board in all businesses. But we feel like we've got the tools, the people and the experience here to be able to deliver something here as seamless as possible.

wabuffo

Either its me or he doesn't understand what Charter is actually doing.  They have stated multiple times that they are going down from 13 billing systems to the current 4 and ultimately down to 1. 
Title: Re: CHTR - Charter Communications
Post by: rogermunibond on May 21, 2018, 11:32:13 AM
Maybe a question of how they are doing this.  Goei saying they are using middleware to intermediate all of these other systems.

It's probably cost prohibitive to actually port over all those users from 9 billing systems into the 4 remaining systems.
Title: Re: CHTR - Charter Communications
Post by: LongTermView on May 21, 2018, 07:52:00 PM
It seems to me the mobile phone is the only additional element here. At home or work you would be able to use either when 5G is out...On the move you could use 5G...You wouldn't need 2 services. So maybe instead of buying all this stock back, cable should figure out how they will keep the customer on the road and at home, either via mobile partnership or buying a 5G network. It will cost alot of money so they will need to build a war chest.

Yeah, there are a lot of questions regarding 5G. This "The Power of Millimeter Wave | Verizon" video is  pretty cool and it's less than 3 minutes: https://www.youtube.com/watch?v=jnyG2bliKCs&feature=youtu.be
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on May 22, 2018, 12:05:50 AM
That video makes me want to sell Charter :) But I think there will be lots and lots of investment required. The question is one of dynamics. How much money will cable cos make from now until their income stream is invaded. Also, what will be the final cost of the 5G service to compensate the developers for the investment? And what if Cable can get 1GBPS (which I think they already have?) right now at a fraction of the cost - then I suppose switching cost and stickiness may be an advantage. I read 5G will be able to do 10x current cable speeds such as 10GBPS. Will going from 1 to 10 require far more technology then in the video or it's just a scaling up process?
Title: Re: CHTR - Charter Communications
Post by: jgyetzer on May 22, 2018, 05:18:29 AM
Also, how hard/expensive would it be for cable cos to do the exact same thing? 
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 22, 2018, 06:38:46 AM
It seems to me the mobile phone is the only additional element here. At home or work you would be able to use either when 5G is out...On the move you could use 5G...You wouldn't need 2 services. So maybe instead of buying all this stock back, cable should figure out how they will keep the customer on the road and at home, either via mobile partnership or buying a 5G network. It will cost alot of money so they will need to build a war chest.

Yeah, there are a lot of questions regarding 5G. This "The Power of Millimeter Wave | Verizon" video is  pretty cool and it's less than 3 minutes: https://www.youtube.com/watch?v=jnyG2bliKCs&feature=youtu.be

Nice marketing video. I like when the guy does the non-sequitur: "it's really high frequency so everybody thinks it doesn't go very far but it's a really big pipe and so that's what allows you to gain the superfast speeds".

A demo through a window and a plywood wall isn't that impressive, and obviously they only show the tests that worked. In the real world, the problem is when you try to have lots and lots of people on the same cells in very variable conditions (thicker walls, brick walls, stone walls, large growing trees, people in basements, etc). And how are they going to do the backhaul from all these cells on top of lamposts and telephone poles? They're running run fiber to all of them to provide those multi-gigabit pipes?

Seems to me like this is basically like doing cable/fiber overbuild, and the economics of that usually aren't very good.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on May 22, 2018, 07:34:27 AM
And how many of those poles will they need? I mean will the landscape be scattered with those toothpick like poles literally everywhere?
Title: Re: CHTR - Charter Communications
Post by: cameronfen on May 22, 2018, 07:40:09 AM
And how many of those poles will they need? I mean will the landscape be scattered with those toothpick like poles literally everywhere?

I think I read that 5G small cells (particularly 23 and 26 Ghz bands) have range of 100 meters.  That total area is roughly a block or two in Manhattan I think. 
Title: Re: CHTR - Charter Communications
Post by: walkie518 on May 22, 2018, 07:46:29 AM
And how many of those poles will they need? I mean will the landscape be scattered with those toothpick like poles literally everywhere?

I think I read that 5G small cells (particularly 23 and 26 Ghz bands) have range of 100 meters.  That total area is roughly a block or two in Manhattan I think.

At least in urban areas, street lights and signs can function as mini-towers...  Facebook's engineers for its connectivity lab and Terragraph program call these "street furniture."
Title: Re: CHTR - Charter Communications
Post by: rogermunibond on May 22, 2018, 08:13:46 AM
https://www.denverpost.com/2018/03/12/denver-5g-cell-phone-service/

This article has a couple good photos of what the small cell poles and installed cells look like.  In my area they are 30 foot wood poles with a brown metal wrap around the equipment

(https://i1.wp.com/www.denverpost.com/wp-content/uploads/2018/03/2-cell_towers_cause_strife_in_denver_neighborhoods__2hr1821.jpg?w=810&crop=0%2C0px%2C100%2C9999px&ssl=1)

(https://i1.wp.com/www.denverpost.com/wp-content/uploads/2018/03/cell_towers_cause_strife_in_denver_neighborhoods__2hr1919.jpg?w=810&crop=0%2C0px%2C100%2C9999px&ssl=1)
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on May 22, 2018, 09:11:52 AM
In my mind, there are two questions about the viability of millimeter wave 5G:

We do know that Verizon tried to buy Charter last year. Perhaps they are not as sure internally about millimeter wave technology.  Other cellular carriers seem to be somewhat cooler on the millimeter wave 5G prospects. T-Mobile announced that they would be upgrading low and mid band frequencies to 5G and AT&T said they would upgrade cell sites that are part of FirstNet contract with 5G (presumably low and mid band as well).
Title: Re: CHTR - Charter Communications
Post by: JRM on May 22, 2018, 09:24:10 AM
Perhaps this is not the correct place to ask this questions, but has anyone done any serious research on potential health effects of cell tower radiation? 

Just curious.
Title: Re: CHTR - Charter Communications
Post by: undervalued on May 22, 2018, 10:19:49 AM
Can someone explain how Verizon is able to build 5G in the video and why ATT/T-Mobile/Sprint or Cable companies can't do the same (build towers and beam signals)? If 5G is backed by fibers, it makes more sense for Telcos to purchase/merge with Cable companies instead of building their own, especially when they want to expand into rural/suburb areas. Do they need to own spectrum for this to work?
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on May 22, 2018, 12:05:41 PM
What's better? Mobile + WIFI or Cable + WIFI + MVNO?
Seems all of it is so so similar. I maintain these are all utilities. Buy them when cheap , at the right time in the large capex investment cycle. Does the consumer care if he heats his house by coal, natural gas, hydro, geothermal? He probably just cares about the performance and price tag.
Title: Re: CHTR - Charter Communications
Post by: undervalued on May 22, 2018, 02:07:13 PM
What's better? Mobile + WIFI or Cable + WIFI + MVNO?
Seems all of it is so so similar. I maintain these are all utilities. Buy them when cheap , at the right time in the large capex investment cycle. Does the consumer care if he heats his house by coal, natural gas, hydro, geothermal? He probably just cares about the performance and price tag.

It's kind of hard to compare it to energy because energy doesn't have a characteristic that differentiate between the products (bandwidth speed/reliability). Right now Cable operators are cheap because once 5G hits, all people need is MVNO (if the wireless carriers are smart enough to remove the bandwidth cap). In this scenario where 5G takes over (assuming they don't need fiber or copper and other legacy buried wires in the ground), all these capex the cable companies are spending doesn't worth anything anymore. Most people can survive with just MVNO plan since they can tether their PC/Router/Repeater, etc.

I guess if we were to compare an event in history that kind of similar to this jump to 5G will be when people switch from dial up to Cable/DSL connection. Those people who cannot afford it are the last person who jumps on and those people who jumps on early will probably not give up their faster connection to go back.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on May 22, 2018, 02:38:28 PM
So what's the Conclusion? :)
Title: Re: CHTR - Charter Communications
Post by: undervalued on May 22, 2018, 03:57:18 PM
So what's the Conclusion? :)

Let Malone figure it out? lol I don't know.
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on May 22, 2018, 08:04:42 PM
So what's the Conclusion? :)

Let Malone figure it out? lol I don't know.

Good answer. I'll go with that.
Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on May 23, 2018, 08:19:45 AM
Perhaps this is not the correct place to ask this questions, but has anyone done any serious research on potential health effects of cell tower radiation? 

Just curious.

This is just an n=1 sample but I've used a cell phone for over 20 years and I still don't have any mutant powers....
Title: Re: CHTR - Charter Communications
Post by: JRM on May 23, 2018, 03:05:46 PM
Perhaps this is not the correct place to ask this questions, but has anyone done any serious research on potential health effects of cell tower radiation? 

Just curious.

This is just an n=1 sample but I've used a cell phone for over 20 years and I still don't have any mutant powers....

Ya, I know it sounds a little out there.  There are strong advocates for the health concerns, believe it or not.  I imagine someday everyone will have a rectangle shaped cancer on the leg where they kept a cell phone in their pocket for years...
Title: Re: CHTR - Charter Communications
Post by: cameronfen on May 23, 2018, 05:02:45 PM
Perhaps this is not the correct place to ask this questions, but has anyone done any serious research on potential health effects of cell tower radiation? 

Just curious.

This is just an n=1 sample but I've used a cell phone for over 20 years and I still don't have any mutant powers....

Ya, I know it sounds a little out there.  There are strong advocates for the health concerns, believe it or not.  I imagine someday everyone will have a rectangle shaped cancer on the leg where they kept a cell phone in their pocket for years...

This is true there is good evidence that cell phones at least cause health issues, however there is also a lot of counter evidence.  So its not a clear cut no. 
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on May 24, 2018, 09:41:07 AM
https://motherboard.vice.com/en_us/article/7xmxza/america-hates-comcast-more-than-ever

https://arstechnica.com/information-technology/2018/05/streaming-video-trounces-cable-tv-in-customer-satisfaction-ratings/

8% decline in customer satisfaction. I wonder if it's due to more customers or integration issues. Or something else.
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 24, 2018, 10:13:50 AM
https://motherboard.vice.com/en_us/article/7xmxza/america-hates-comcast-more-than-ever

https://arstechnica.com/information-technology/2018/05/streaming-video-trounces-cable-tv-in-customer-satisfaction-ratings/

8% decline in customer satisfaction. I wonder if it's due to more customers or integration issues. Or something else.

Sound slike it's probably billing/integration issues. They mentioned that when you change products and change billing to consolidate things and move the products to the new strategy, there's going to be more transactions/service calls. It'll be interesting to see over time if it's a blip or a trend.
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on May 24, 2018, 02:22:12 PM
https://motherboard.vice.com/en_us/article/7xmxza/america-hates-comcast-more-than-ever

https://arstechnica.com/information-technology/2018/05/streaming-video-trounces-cable-tv-in-customer-satisfaction-ratings/

8% decline in customer satisfaction. I wonder if it's due to more customers or integration issues. Or something else.

Sound slike it's probably billing/integration issues. They mentioned that when you change products and change billing to consolidate things and move the products to the new strategy, there's going to be more transactions/service calls. It'll be interesting to see over time if it's a blip or a trend.

My ATT bill is dead simple & I pay a straight $50 for their Internet 45 plan (great service so far.)

Are the system changes needed in order to groom the company for a match?
Are they just trying to score better on customer service?
Have you seen a Spectrum invoice?
How hard can it be to understand?
Has there been a price increase?
Boy I hope so, even a dollar or two would be nice.

---

Someone's probably already posted this but,

https://www.dslreports.com/shownews/Scoop-Charter-Wireless-Drops-June-30-Mirrors-Comcast-Pricing-141756
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on May 24, 2018, 02:53:52 PM
I tried the google service once. I think it was $10 a gb. Could be used worldwide. I recall it worked quite well, there was no dropouts or anything. However, I believe now 3 in the UK has the USA as an at home roaming. I believe you can get 5GB or even unlimited data for 1/2 the price of the Charter package if you're willing to have a UK number. North American rates are an island unto themselves.

Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on May 24, 2018, 07:34:40 PM
Interesting PC Mag interview with the CTO of T-Mobile:

https://www.youtube.com/watch?v=BkSk906LMM8

He comments on Verizon's mm wave 5G at the 30 sec mark: "unexciting with very limited range". T-Mobile is initially launching 600 MHz 5G nationwide, intended for IoT. 

Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on May 24, 2018, 07:59:55 PM
Article about AT&T's mm wave trials:

https://arstechnica.com/information-technology/2018/04/atts-5g-trials-produce-gigabit-speeds-and-9ms-latency/
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on May 24, 2018, 11:04:53 PM
I absolutely hate to own stocks that are in decline, because even though you may still have some return it can be a real slog (look at IBM, KHC, and many legacy tech businesses). I am not sure how this plays out with CHTR since the AT&T trials @ 1 GBPS are pretty much equivalent to what cable can do right now. Given the new investment, I can't imagine monthly pricing will be much lower. But how much broadband losses are baked into the current sub 10x p/cash flow ratio? But if broadband is a utility, unless there is a clear price and performance advantage, I don't see why there isn't room for several options. On the other hand, the more utility like , the more tempered the return expectations should be.
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on May 25, 2018, 04:22:19 AM
The ATT trial was mostly line of sight. MM waves don’t go round corners or through obstacles generally. Also, from the data, they mentioned trials at 400Mhz, similar to currently used cellphone frequencies, which are meter waves - those go round corners and obstacles due to diffraction.

It seems to me way to early to speculate too much about what is going to happen. let CHTR run their business for now and generate mid/high single digits EBITDA growth and buy back shares. everything so far indicates that the tech, however it is implemented, needs lots of towers/repeaters, which favors the companies that have assets in the ground already, I think.
Title: Re: CHTR - Charter Communications
Post by: Jurgis on May 25, 2018, 07:33:10 AM
The ATT trial was mostly line of sight. MM waves don’t go round corners or through obstacles generally. Also, from the data, they mentioned trials at 400Mhz, similar to currently used cellphone frequencies, which are meter waves - those go round corners and obstacles due to diffraction.

It seems to me way to early to speculate too much about what is going to happen. let CHTR run their business for now and generate mid/high single digits EBITDA growth and buy back shares. everything so far indicates that the tech, however it is implemented, needs lots of towers/repeaters, which favors the companies that have assets in the ground already, I think.

I agree with Spekulatius. Verizon&co have incentive to advertise their best tests and fast rollout. In reality performance will likely be much worse and the rollout will likely be quite slow.
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 25, 2018, 07:36:28 AM
The ATT trial was mostly line of sight. MM waves don’t go round corners or through obstacles generally. Also, from the data, they mentioned trials at 400Mhz, similar to currently used cellphone frequencies, which are meter waves - those go round corners and obstacles due to diffraction.

It seems to me way to early to speculate too much about what is going to happen. let CHTR run their business for now and generate mid/high single digits EBITDA growth and buy back shares. everything so far indicates that the tech, however it is implemented, needs lots of towers/repeaters, which favors the companies that have assets in the ground already, I think.

I agree with Spekulatius. Verizon&co have incentive to advertise their best tests and fast rollout. In reality performance will likely be much worse and the rollout will likely be quite slow.

How fast will they invest? Will the cut their dividends?
Title: Re: CHTR - Charter Communications
Post by: Jurgis on May 25, 2018, 08:05:45 AM
The ATT trial was mostly line of sight. MM waves don’t go round corners or through obstacles generally. Also, from the data, they mentioned trials at 400Mhz, similar to currently used cellphone frequencies, which are meter waves - those go round corners and obstacles due to diffraction.

It seems to me way to early to speculate too much about what is going to happen. let CHTR run their business for now and generate mid/high single digits EBITDA growth and buy back shares. everything so far indicates that the tech, however it is implemented, needs lots of towers/repeaters, which favors the companies that have assets in the ground already, I think.

I agree with Spekulatius. Verizon&co have incentive to advertise their best tests and fast rollout. In reality performance will likely be much worse and the rollout will likely be quite slow.

How fast will they invest? Will the cut their dividends?

I don't know. Historically though the newG rollouts were slower and had worse performance than expected for some time. I've had internet through fixed wireless cable-replacement pitch hmm maybe 5 or 7 years ago now? That company is BK AFAIK or at least not in business. Not saying that Verizon will go BK, since they are mobile powerhouse and in good financial shape. Not saying 5G is DOA. But likely cable replacement part is not gonna go fast or deliver as good performance as advertised. At least for couple years. 5-10 years out... who knows.
Title: Re: CHTR - Charter Communications
Post by: AJDelphi on May 25, 2018, 08:55:38 AM
The ATT trial was mostly line of sight. MM waves don’t go round corners or through obstacles generally. Also, from the data, they mentioned trials at 400Mhz, similar to currently used cellphone frequencies, which are meter waves - those go round corners and obstacles due to diffraction.

It seems to me way to early to speculate too much about what is going to happen. let CHTR run their business for now and generate mid/high single digits EBITDA growth and buy back shares. everything so far indicates that the tech, however it is implemented, needs lots of towers/repeaters, which favors the companies that have assets in the ground already, I think.

I agree with Spekulatius. Verizon&co have incentive to advertise their best tests and fast rollout. In reality performance will likely be much worse and the rollout will likely be quite slow.

How fast will they invest? Will the cut their dividends?

I'd be shocked if ATT/Verizon cut their dividend. If they want to compete with a wireless broadband product it will take a TON of small cells and probably new fiber being laid to get closer to their connections. It just seems like it is going to take a while until they can get a dense enough network to get reliable wireless broadband service through buildings.

ATT is already spending $20 billion a year in capex so maybe they can fit that within the budget. But if it doesn't which I suspect (already increased 2018 budget to $23 billion), because of those dividend obligations, it will be a slow rollout and don't see why Charter or Comcast wouldn't be able to compete well.

If Charter and Comcast wanted to offer a wireless broadband product they could acquire DISH, with it's spectrum, and start building out a network themselves. Or could Charter or Comast make agreements with some of their customers to build small cells to serve other customers in the immediate area? Don't see why not and they already have fiber in the ground on that last mile so wouldn't have to build that out like ATT/Verizon.

I assume they are thinking all of this through rationally so I'm not terribly worried about Charter's future in respect to wireless broadband. I'm certainly paying attention though.
Title: Re: CHTR - Charter Communications
Post by: jmp8822 on May 25, 2018, 09:48:25 AM
Isn't the biggest risk here, what if 5G works in suburban/urban neighborhoods at a CHEAPER price per month than cable internet?  What if they can deliver 1000 mbps to households within 2,000 feet like the Verizon CEO suggests. Perhaps laying fiber near main roads and letting the air carry the spectrum the rest of the way wouldn't be the biggest relative capital cost compared to today's monthly pricing per customer.

Let's say that 500 mbps is $20 per month added to your cell phone bill and there is strong coverage near your house.  Wouldn't almost everyone instantaneously cancel their home internet plan that costs $50+? 5G in your neighborhood is a no-brainer add-on if the price is the same or lower, while no one is cancelling their cell phone plan anytime soon. Okay, so let's say cable internet lowers its price to $20/per month - the financial leverage and operating leverage could bankrupt a cable company in that case. I have no position here, but the 5G probably won't be that great thesis isn't strong in my opinion.
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on May 25, 2018, 09:53:13 AM
The only 5G plan AT&T CEO mentioned at the most recent JP Morgan Telecom event was the upgrading of their towers as a part of FirstNet contract. While they are implementing the contract, they would upgrade the tower equipment to 5G capability. So AT&T would not be installing any small cells for mm wave 5G in the near term, only making low band (700 MHz) and mid band (< 4 GHz) 5G compatible at their existing towers which would require substantially less capex. This would not support fixed wireless broadband but would support low latency IoT devices, autonomous driving and other applications.

From the PcMag interview, it appears to me that T-Mobile is only doing 5G at low band and mid band for the time being and their CTO does not seem think mm wave 5G has much potential.

Millimeter wave 5G requires an overbuild of a competing cable plant with lots of fiber connections to very small cells. Even then, it is not clear how much bandwidth they can provide to end users because of propagation losses at very high frequencies.
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on May 25, 2018, 09:58:21 AM
Isn't the biggest risk here, what if 5G works in suburban/urban neighborhoods at a CHEAPER price per month than cable internet?  What if they can deliver 1000 mbps to households within 2,000 feet like the Verizon CEO suggests. Perhaps laying fiber near main roads and letting the air carry the spectrum the rest of the way wouldn't be the biggest relative capital cost compared to today's monthly pricing per customer.

Let's say that 500 mbps is $20 per month added to your cell phone bill and there is strong coverage near your house.  Wouldn't almost everyone instantaneously cancel their home internet plan that costs $50+? 5G in your neighborhood is a no-brainer add-on if the price is the same or lower, while no one is cancelling their cell phone plan anytime soon. Okay, so let's say cable internet lowers its price to $20/per month - the financial leverage and operating leverage could bankrupt a cable company in that case. I have no position here, but the 5G probably won't be that great thesis isn't strong in my opinion.

How about the capex needed to layout all the fiber and connect all the 5G access points (that have only 100 meter range) to fiber? How does that get financed and would just a $20 add-on justify the cost?
Title: Re: CHTR - Charter Communications
Post by: dwy000 on May 25, 2018, 10:13:26 AM
Cable's big advantage is that they have already spent the capex.  5G may offer higher speed or bandwidth (at least until the next tech upgrade at the cable/fiber level) but it's a massive new cost.  Verizon has said that it will so far fall under their existing capex plan of $17bn per year (they've been at $17bn for each of the past 3 years).  That's great as a test case but as a nation wide roll out it will incremental.  They have plenty of financial flexibility to do it (esp if competition gets reduced with 3 rational wireless players) but the question is what is the return on capital?

Google Fiber started to overbuild and lay fiber to compete with cable and very quickly stopped because the economics don't make sense (especially when the existing broadband providers just matched price with Google). 

I would think the capital would be better spent for both sides in merging.  Put Verizon and Charter or Comcast together and you can take as much time as you need to roll out 5G - if it even makes sense at that point.
Title: Re: CHTR - Charter Communications
Post by: jmp8822 on May 25, 2018, 10:15:29 AM
Isn't the biggest risk here, what if 5G works in suburban/urban neighborhoods at a CHEAPER price per month than cable internet?  What if they can deliver 1000 mbps to households within 2,000 feet like the Verizon CEO suggests. Perhaps laying fiber near main roads and letting the air carry the spectrum the rest of the way wouldn't be the biggest relative capital cost compared to today's monthly pricing per customer.

Let's say that 500 mbps is $20 per month added to your cell phone bill and there is strong coverage near your house.  Wouldn't almost everyone instantaneously cancel their home internet plan that costs $50+? 5G in your neighborhood is a no-brainer add-on if the price is the same or lower, while no one is cancelling their cell phone plan anytime soon. Okay, so let's say cable internet lowers its price to $20/per month - the financial leverage and operating leverage could bankrupt a cable company in that case. I have no position here, but the 5G probably won't be that great thesis isn't strong in my opinion.

How about the capex needed to layout all the fiber and connect all the 5G access points (that have only 100 meter range ) to fiber? How does that get financed and would just a $20 add-on justify the cost?

I guess what I'm saying is the Verizon CEO in the first video says the very short distances (100 meter) is a myth, and they can do over 2,000 feet (600 meters) and the second video says the speed doesn't drop much from 1000 Mbps (down to say 700 Mbps in 2,000 feet). What if that is actually true? In my opinion, assuming the Verizon CEO is lying is a dangerous thesis. This also assumes improvements won't be made/discovered.  Again, no position here, but I wouldn't be going long a home internet company myself.

Check these out if you haven't, posted earlier in this thread:
Check out the first video at about 5:30.

https://www.youtube.com/watch?v=lYAufhIgkpI

https://www.youtube.com/watch?v=jnyG2bliKCs&feature=youtu.be
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 25, 2018, 10:26:58 AM
Check these out if you haven't, posted earlier in this thread:
Check out the first video at about 5:30.

https://www.youtube.com/watch?v=lYAufhIgkpI

Look at the game demo on the left side of the screen around 8:00min in that first video. Lots of compression artifacts, hiccups and lag, in a company demo.
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on May 25, 2018, 10:28:24 AM

I guess what I'm saying is the Verizon CEO in the first video says the very short distances (100 meter) is a myth, and they can do over 2,000 feet (600 meters) and the second video says the speed doesn't drop much from 1000 Mbps (down to say 700 Mbps in 2,000 feet). What if that is actually true? In my opinion, assuming the Verizon CEO is lying is a dangerous thesis. This also assumes improvements won't be made/discovered.  Again, no position here, but I wouldn't be going long a home internet company myself.

Check these out if you haven't, posted earlier in this thread:
Check out the first video at about 5:30.

https://www.youtube.com/watch?v=lYAufhIgkpI

https://www.youtube.com/watch?v=jnyG2bliKCs&feature=youtu.be

Verizon CEO has an opinion, and others have differing opinions (see AT&T tests, Charter CEO comments and T-Mobile views on the topic). He may be right or wrong. I suggest keeping the discussion to core technical and business issues at hand instead of making false accusations about what is being said.

You still have not answered my question: what is the capital needed and what is the IRR?
Title: Re: CHTR - Charter Communications
Post by: jmp8822 on May 25, 2018, 10:36:41 AM

I guess what I'm saying is the Verizon CEO in the first video says the very short distances (100 meter) is a myth, and they can do over 2,000 feet (600 meters) and the second video says the speed doesn't drop much from 1000 Mbps (down to say 700 Mbps in 2,000 feet). What if that is actually true? In my opinion, assuming the Verizon CEO is lying is a dangerous thesis. This also assumes improvements won't be made/discovered.  Again, no position here, but I wouldn't be going long a home internet company myself.

Check these out if you haven't, posted earlier in this thread:
Check out the first video at about 5:30.

https://www.youtube.com/watch?v=lYAufhIgkpI

https://www.youtube.com/watch?v=jnyG2bliKCs&feature=youtu.be

Verizon CEO has an opinion, and others have differing opinions (see AT&T tests, Charter CEO comments and T-Mobile views on the topic). He may be right or wrong. I suggest keeping the discussion to core technical and business issues at hand in stead of making false accusations about what is being said.

You still have not answered my question: what is the capital needed and what is the IRR?

I don't know what the capital needed is or the IRR, which is precisely why I wouldn't own a levered cable company while waiting to find out.  But, the Verizon CEO in the video does say that 2,000 feet versus the 200 foot myth will have a "huge impact on our capital need going forward". I'm guessing you must know the capital needs? Also, false accusations? Not following what statement you're referencing.
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on May 25, 2018, 10:58:23 AM
How can anyone know the IRR for an evolving technology that is still in a the testing stage. I don’t think the CFO’s if the company involved know the answer. Folks should get a grip here, time would be better spent opening a cold one. Happy Friday afternoon !
Title: Re: CHTR - Charter Communications
Post by: undervalued on May 25, 2018, 11:36:36 AM
I guess an easier answer to ponder is which one takes more capital, that is for cable companies to setup tower or phone companies to layout fiber? Which one of the two require more CAPEX and who can do it faster? What is the benefit of being the first to reach that goal? Since most phone companies have great concentration in big cities, they'll have superior advantage. They have less of it in suburbs. I think telco and cable need each other to make 5G available to everyone.
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on May 25, 2018, 11:46:29 AM

Also, false accusations? Not following what statement you're referencing.

You were saying in an earlier post that "assuming the Verizon CEO is lying is a dangerous thesis." It certainly wasn't my thesis (though I am somewhat skeptical of marketing videos in general) and you should not imply otherwise. Anyway it is pointless for me to prolong this back and forth with you.
Title: Re: CHTR - Charter Communications
Post by: jmp8822 on May 25, 2018, 12:04:12 PM

Also, false accusations? Not following what statement you're referencing.

You were saying in an earlier post that "assuming the Verizon CEO is lying is a dangerous thesis." It certainly wasn't my thesis (though I am somewhat skeptical of marketing videos in general) and you should not imply otherwise. Anyway it is pointless for me to prolong this back and forth with you.

You said that 5G has a 100 meter range. The Verizon CEO said 5G has a 2,000 foot range.  Those are at odds - I shouldn't have suggested that you actually believe 5G has a 100 meter range, maybe you were just saying other people think that. I find the fact that 5G could have a 2,000+ foot range to be an existential risk to cable internet.
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on May 25, 2018, 12:15:19 PM
time would be better spent opening a cold one. Happy Friday afternoon !

You are 100% correct and I am going to follow this advice. 
Title: Re: CHTR - Charter Communications
Post by: vinod1 on May 25, 2018, 12:22:10 PM
Once you have 5G on mobile devices, I would think that usage can shoot up 100x current levels. Many people might be willing to pay up for unlimited wireless downloads.

Can 5G meet the needs of mobile users if usage does increase 100x and still have enough bandwidth to meet wireless internet to customers?

Vinod
Title: Re: CHTR - Charter Communications
Post by: cameronfen on May 25, 2018, 12:28:52 PM
One way to test the success of 5G wireless broadband, is to listen to asian telecos conference calls.  I have read in places that asia is the first place this will be rolled out to public.  High population density plus integrated (ie fiber plus mobile) telecos mean that I think people are already rolling out 5g to customers.  I think listening in on the china unicom, china telecom, china mobile (as well as maybe the japanese telecos but less sure what their timeline is) will allow people to see how sucessful 5g is (as its rolled out but before it hits US) and the existential risks to charter. 
Title: Re: CHTR - Charter Communications
Post by: cameronfen on May 25, 2018, 12:34:25 PM
Once you have 5G on mobile devices, I would think that usage can shoot up 100x current levels. Many people might be willing to pay up for unlimited wireless downloads.

Can 5G meet the needs of mobile users if usage does increase 100x and still have enough bandwidth to meet wireless internet to customers?

Vinod

I dont know.  When I hear of increasing bandwith 100x, I think to myself the Clayton Christensen idea of how established players often over innovate in an area where customers needs are already fully satiated.  I think most people can't find use for the bandwidth that they already have. 
Title: Re: CHTR - Charter Communications
Post by: vinod1 on May 25, 2018, 02:39:46 PM
Once you have 5G on mobile devices, I would think that usage can shoot up 100x current levels. Many people might be willing to pay up for unlimited wireless downloads.

Can 5G meet the needs of mobile users if usage does increase 100x and still have enough bandwidth to meet wireless internet to customers?

Vinod

I dont know.  When I hear of increasing bandwith 100x, I think to myself the Clayton Christensen idea of how established players often over innovate in an area where customers needs are already fully satiated.  I think most people can't find use for the bandwidth that they already have.

Let me explain what I was trying to get at.

Currently most people have about 1 or 2 GB data limit  per device on their mobile plans (roughly a 8 GB plan for 4 devices in family). But people use up 200 GB to 500 GB per family on their Internet service.

Often people wait until they have a Wi-Fi connection to watch videos, etc. that require high bandwidth. If 5G enables mobile carriers to offer very high data limits, then it is likely that people would be using up a whole lot more data.

So using up 50 GB to 100 GB data per month on a mobile device is not really that big of a leap. Hence my question.

Thanks

Vinod
Title: Re: CHTR - Charter Communications
Post by: undervalued on May 25, 2018, 02:55:48 PM
Once you have 5G on mobile devices, I would think that usage can shoot up 100x current levels. Many people might be willing to pay up for unlimited wireless downloads.

Can 5G meet the needs of mobile users if usage does increase 100x and still have enough bandwidth to meet wireless internet to customers?

Vinod

I dont know.  When I hear of increasing bandwith 100x, I think to myself the Clayton Christensen idea of how established players often over innovate in an area where customers needs are already fully satiated.  I think most people can't find use for the bandwidth that they already have.

I think you underestimate how much bandwidth people will use. Maybe try to see how much people are using between the move from 1G to 2G, and 2G to 3G, and then 3G to 4G. As of right now, 4K streaming is only possible for those people with fibers. When 4K streaming is possible, who knows what kind of technology will be created. Game streaming is a sure thing. IoT will only be using and producing more and more data.
Title: Re: CHTR - Charter Communications
Post by: Liberty on May 25, 2018, 03:03:57 PM
I frequently see people complaining about Comcast's 1-terabyte/month caps, so some people use a lot of bandwidth. I'm guessing houses with parents and teenagers all streaming Netflix/Youtube/Amazon Video/Twitch every day, where everybody has multiple devices, game consoles and gaming PCs downloading large games and updates frequently, etc...
Title: Re: CHTR - Charter Communications
Post by: dwy000 on May 25, 2018, 04:23:45 PM
Once you have 5G on mobile devices, I would think that usage can shoot up 100x current levels. Many people might be willing to pay up for unlimited wireless downloads.

Can 5G meet the needs of mobile users if usage does increase 100x and still have enough bandwidth to meet wireless internet to customers?

Vinod

I dont know.  When I hear of increasing bandwith 100x, I think to myself the Clayton Christensen idea of how established players often over innovate in an area where customers needs are already fully satiated.  I think most people can't find use for the bandwidth that they already have.

Let me explain what I was trying to get at.

Currently most people have about 1 or 2 GB data limit  per device on their mobile plans (roughly a 8 GB plan for 4 devices in family). But people use up 200 GB to 500 GB per family on their Internet service.

Often people wait until they have a Wi-Fi connection to watch videos, etc. that require high bandwidth. If 5G enables mobile carriers to offer very high data limits, then it is likely that people would be using up a whole lot more data.

So using up 50 GB to 100 GB data per month on a mobile device is not really that big of a leap. Hence my question.

Thanks

Vinod

That might be a Canadian thing.  Unlimited is pretty much the new norm in the US (yes, you can get cheaper limited plans but most of the carriers compete on the basis of unlimited).
Title: Re: CHTR - Charter Communications
Post by: vinod1 on May 25, 2018, 05:02:11 PM
I am in US. :)

Unlimited plans are catching on but most of the people I know are still on limited data plans. Limited sample size.

Vinod
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on May 26, 2018, 02:00:09 AM
What do you think about the strategy of selling puts on GLIBA around $30 to $35 for december? Worst case you get Charter proxy at another 20-25% discount already depressed valuation and base case you get 15-19% return on collateral because put options on low priced stocks tend to be lower collateral vs cost..plus if you get put it's easier to buy shares at $35 then Charter at $208? I've only seen this opportunity available on stocks like LBTYA, GLIBA, DISCK, maybe a reason Malone keeps the share price so low? You also have significant buybacks. Already at $330+, 12% of Charter float was retired over the last year. At $215 to $270 I would imagine they would want to retire another 15% this year. At this rate, I cannot imagine the share price won't be sustained since in 5 years 100% of the shares will be repurchased!

Title: Re: CHTR - Charter Communications
Post by: Spekulatius on May 26, 2018, 03:45:46 AM
Quote
t $215 to $270 I would imagine they would want to retire another 15% this year. At this rate, I cannot imagine the share price won't be sustained since in 5 years 100% of the shares will be repurchased

Wrong math. If CHTR retires 15% of their nshares avery year, they end up with 0.85^7 or ~32% of their shares left after 7 years. The law of smaller numbers 8).
Title: Re: CHTR - Charter Communications
Post by: cameronfen on May 26, 2018, 05:51:15 AM
Once you have 5G on mobile devices, I would think that usage can shoot up 100x current levels. Many people might be willing to pay up for unlimited wireless downloads.

Can 5G meet the needs of mobile users if usage does increase 100x and still have enough bandwidth to meet wireless internet to customers?

Vinod

I dont know.  When I hear of increasing bandwith 100x, I think to myself the Clayton Christensen idea of how established players often over innovate in an area where customers needs are already fully satiated.  I think most people can't find use for the bandwidth that they already have.

Let me explain what I was trying to get at.

Currently most people have about 1 or 2 GB data limit  per device on their mobile plans (roughly a 8 GB plan for 4 devices in family). But people use up 200 GB to 500 GB per family on their Internet service.

Often people wait until they have a Wi-Fi connection to watch videos, etc. that require high bandwidth. If 5G enables mobile carriers to offer very high data limits, then it is likely that people would be using up a whole lot more data.

So using up 50 GB to 100 GB data per month on a mobile device is not really that big of a leap. Hence my question.

Thanks

Vinod

I thinl you are misunderstanding bandwith.  1 gbps means you get 1/8 gigbytes of download speed per second.  Thus to download 100 GB of information you would only need like 800 seconds or 13 minutes of being online, which is much faster than is necassary to stream even 4k (hulu requires only 15 mbps for streaming one 4k video so you would need 80 streamers on the same line to theoretically max the capcity of 1gbps download speed) .  Now thats the optimal speed and often download speeds are not quite fast, but even if it took you an hour or two to download 100 GB over a whole month that is much more bandwidth than needed. 

Title: Re: CHTR - Charter Communications
Post by: cameronfen on May 26, 2018, 06:09:55 AM
So if you are talking about total data caps, I dont think wireless broadband/5g will have that problem.  Bandwidth is proportional to frequency of spectrum divided by number of people using it per cell.  Since the fequency of mmwave is like 50 times larger, and the radius of small cells are 100x smaller at least, this works out 5000x more bandwidth per person.  Because there is so much more bandwidth per person, telecos wont have to ration data nearly as much, permitting 1 Tb of data to be downloaded per month which basically makes it suitible for wireless broadband.  The problem is that 5g while not lacking in bandwidth, may be slow in terms of latency.  Charter says 80% of traffic goes through fiber backhual already so in a sense it seems like latency can be addressed, however America Movil seems to think otherwise. 
Title: Re: CHTR - Charter Communications
Post by: glorysk87 on May 27, 2018, 06:52:40 PM
Lots of talk re: AT&T and their 5G fixed wireless tech. But has anyone done the work? Here is a quote straight from an AT&T transcript:

"With regard to the fixed 5G wireless, if you will, our tests have shown it can be done. We can do it. The opportunity there is something that we have to prove out. We're not as excited about the business case. It's not as compelling yet for us as it may be for some. The reason we don't see that, if you will. The question is to get that fixed wireless through to residential, you still have to have backhaul from where the - the 1,000 feet away, the 1,500 feet away, and you still have to have that backhaul infrastructure. So that could be depending upon your ability to successfully pick who's going to buy and how much we're going to need is going to be a very tricky business case."

Basically there are two takeaways. First, is that regardless of how well your small cell fixed wireless broadband products perform, you still need a ton of fiber backhaul in order to release a product on a large scale. Second, is that (reading between the lines), AT&T is basically saying the IRR's on 5G FWB are not compelling. This idea is supported by many independent studies. The most optimistic I've seen have negligible positive IRRs on par with fiber to the home. However, most model's I've seen have negative IRR's.

As it stands now, 5G as a replacement for cable broadband is not a major threat outside of some select dense urban areas.
Title: Re: CHTR - Charter Communications
Post by: FiveSigma on May 27, 2018, 08:22:02 PM
glorysk87,

Can you point us to any of the studies on 5G FWB IRRs? Or at least name the reports and providers?

I and probably others were looking for some quantitative analysis on how much this will cost.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on May 28, 2018, 02:51:49 AM
What is the difference between fixed wireless broadband and roaming WiFi network of cable providers ? Seems the hype is high but I can't seem to tell the difference.
Title: Re: CHTR - Charter Communications
Post by: cameronfen on May 28, 2018, 07:11:15 AM
What is the difference between fixed wireless broadband and roaming WiFi network of cable providers ? Seems the hype is high but I can't seem to tell the difference.

They use different spectrum.  For that reason and certainly bc of power of microcells vs routers range is typically longer for wireless broadband.  Wifi spectrum is also free to use, so telecos can't ensure there is enough bandwidth if they use wifi spectrum to give you internet. 
Title: Re: CHTR - Charter Communications
Post by: glorysk87 on May 28, 2018, 07:30:02 AM
glorysk87,

Can you point us to any of the studies on 5G FWB IRRs? Or at least name the reports and providers?

I and probably others were looking for some quantitative analysis on how much this will cost.

SCTE/ISBE wrote a 46 page paper/study on 5G, part of which was devoted to the economics of building it out. Bernstein also has a decent note where they did their own IRR calcs.
Title: Re: CHTR - Charter Communications
Post by: FiveSigma on May 29, 2018, 08:00:16 AM
I found the SCTE piece:

https://www.fiercewireless.com/5g/editor-s-corner-cable-industry-tested-fixed-5g-and-it-came-up-a-bit-short
http://assets.fiercemarkets.net/public/007-Telecom%2Farris-cablelabs.pdf

Title: Re: CHTR - Charter Communications
Post by: Liberty on May 29, 2018, 11:12:48 AM
I found the SCTE piece:

https://www.fiercewireless.com/5g/editor-s-corner-cable-industry-tested-fixed-5g-and-it-came-up-a-bit-short
http://assets.fiercemarkets.net/public/007-Telecom%2Farris-cablelabs.pdf

Thank you.
Title: Re: CHTR - Charter Communications
Post by: WayWardCloud on May 29, 2018, 12:43:50 PM
Here is another way to think about it.

Internet at home:
There are ~125M homes in the US. Charter passes ~50M of them and Comcast ~55M with little overlap. Pretty much all of them will be Gigabit ready by year end, which is WAY more bandwidth than 95% of people need anyway. There is virtually no extra cost: the cables are laid down already.
Given this starting situation, why would any rational competitor decide to embark in a several-years-long roll-out to invest billions in building 5G towers + the whole new fiber-to-the-tower network needed to power them, just to then see cable lower their broadband price to match or undercut them in those specific areas - which they can do very easily since their own broadband offering is mostly pure margin?

Now, maybe for those undeserved ~20M homes it can make sense but then it's not a threat to cable, just telcos picking up the crumbs where there was no good IRR for their technology, most likely rural and/or poorer areas.
Again, we're talking about billions of dollars and many years of aggravated capex for telcos to carry through that path.

Internet on your phone:
Thanks to the forced MVNO agreement, Comcast and Charter can use Verizon's 4G network if it pleases them to offer mobile. Mobile can be a nice side addition to them since it tends to reduce churn but not an absolute need at all, it's like they're just replacing the phone landline option that's declining in their bundle. So basically all upside/optionality, little additional expenditures needed, no fundamental threat.

Internet of Things:
low-latency 5G in the streets for autonomous connected cars and other futuristic connected-city applications. A whole other type of "5G" waves if I understand correctly. Everything is yet to be built and the business is pretty much unknown. Will telcos take it, cable cos, Elon Musk's satellites, Google or Facebook's weather balloons, you name it - and what will the IRR be? Hard to tell, much too far away. At least 10+ years until 5G IOT is a meaningful market since we don't even have a need/use for it today, change is slow.

Conclusions:
This explains why telcos have been trying to buy cables cos and not the other way around. It is not surprising that Verizon's CEO has been so promotional lately, spreading the "5G is a threat to cable" narrative. If this fear successfully drives Charter and Comcast's share price lower (it has) he will have a stronger seat at the table when another round of M&A negotiations happens in some months. Remember the very same people posting videos about 5G going wonderfully through foliage, buildings, rain, birds, airplanes, tanks and mother-in-laws were trying to buy Charter at $5xx less than a year ago.
Title: Re: CHTR - Charter Communications
Post by: FiveSigma on May 29, 2018, 02:15:27 PM
I was wondering if someone would be kind enough to PM me (or post here) the AllianceBernstein report.

I have access to institutional research from a number of brokers, but not AB, unfortunately and I can't find it online.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on May 29, 2018, 02:36:50 PM
Reminds me of mall reits...except there are no alternatives right now , there is no mass 5G yet and yet the stocks are trading even cheaper it would seem than mall REITs which really are in some cases in decline right now from e-commerce. I hope since there is no dividend that they are buying back alot more stock this year than last year.

Title: Re: CHTR - Charter Communications
Post by: cameronfen on May 29, 2018, 03:41:32 PM
Here is another way to think about it.

Internet at home:
There are ~125M homes in the US. Charter passes ~50M of them and Comcast ~55M with little overlap. Pretty much all of them will be Gigabit ready by year end, which is WAY more bandwidth than 95% of people need anyway. There is virtually no extra cost: the cables are laid down already.
Given this starting situation, why would any rational competitor decide to embark in a several-years-long roll-out to invest billions in building 5G towers + the whole new fiber-to-the-tower network needed to power them, just to then see cable lower their broadband price to match or undercut them in those specific areas - which they can do very easily since their own broadband offering is mostly pure margin?

Now, maybe for those undeserved ~20M homes it can make sense but then it's not a threat to cable, just telcos picking up the crumbs where there was no good IRR for their technology, most likely rural and/or poorer areas.
Again, we're talking about billions of dollars and many years of aggravated capex for telcos to carry through that path.

Internet on your phone:
Thanks to the forced MVNO agreement, Comcast and Charter can use Verizon's 4G network if it pleases them to offer mobile. Mobile can be a nice side addition to them since it tends to reduce churn but not an absolute need at all, it's like they're just replacing the phone landline option that's declining in their bundle. So basically all upside/optionality, little additional expenditures needed, no fundamental threat.

Internet of Things:
low-latency 5G in the streets for autonomous connected cars and other futuristic connected-city applications. A whole other type of "5G" waves if I understand correctly. Everything is yet to be built and the business is pretty much unknown. Will telcos take it, cable cos, Elon Musk's satellites, Google or Facebook's weather balloons, you name it - and what will the IRR be? Hard to tell, much too far away. At least 10+ years until 5G IOT is a meaningful market since we don't even have a need/use for it today, change is slow.

Conclusions:
This explains why telcos have been trying to buy cables cos and not the other way around. It is not surprising that Verizon's CEO has been so promotional lately, spreading the "5G is a threat to cable" narrative. If this fear successfully drives Charter and Comcast's share price lower (it has) he will have a stronger seat at the table when another round of M&A negotiations happens in some months. Remember the very same people posting videos about 5G going wonderfully through foliage, buildings, rain, birds, airplanes, tanks and mother-in-laws were trying to buy Charter at $5xx less than a year ago.

Two things in response: 1. Why build 5g wireless broadband?  Because you are building 5g mobile due to the natural progression of capex improvements of your mobile service and you get wireless broadband for free. 

2.  Why are telecos are doing all the acquiring?  They arent.  Look at liberty global and liberty latin america.  They are intentionally buying cable assets in markets where they have mobile assets as well.  In the US the only cable company that can has enough assets to buy any of the telecoms is comcast and maybe charter.  All four telecos have the resources to buy any cable company with duetche telecom and softbank backing tmobile and sprint any telecom has the resources to acquire any cable company. 
Title: Re: CHTR - Charter Communications
Post by: WayWardCloud on May 30, 2018, 12:55:22 AM

Two things in response: 1. Why build 5g wireless broadband?  Because you are building 5g mobile due to the natural progression of capex improvements of your mobile service and you get wireless broadband for free. 

2.  Why are telecos are doing all the acquiring?  They arent.  Look at liberty global and liberty latin america.  They are intentionally buying cable assets in markets where they have mobile assets as well.  In the US the only cable company that can has enough assets to buy any of the telecoms is comcast and maybe charter.  All four telecos have the resources to buy any cable company with duetche telecom and softbank backing tmobile and sprint any telecom has the resources to acquire any cable company.

Thanks for your response :)
Not that I think I'm necessarily right but just to keep the group thinking process going:

1. What I was trying to say was that laying down a dense enough fiber-to-the-5Gtower backhaul to handle the amount of data used at home by entire neighborhoods at high speeds including during peak hours is a completely different ballpark in terms of overall bandwidth than what's required to provide a similar neighborhood with "outside of the home data" only via their phone. Just to give an example, my own monthly home broadband consumption is about 300 times higher than my phone data consumption.

2. True in can go either way since the two clearly help each other but the multiples at which these deals are made consistently value cable companies higher than telecoms (eg Vodafone raising debt to buy UnityMedia in Germany for 12X instead of buying back their own shares at 7X).
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on May 30, 2018, 12:59:46 AM
"eg Vodafone raising debt to buy UnityMedia in Germany for 12X instead of buying back their own shares at 7X"

If I was a cynic, which I probably am, I'd say the seller knows more than the buyer. The buyer probably thinks growth is in the cards, the seller probably thinks something like this country's government/market is handicapping returns.

Title: Re: CHTR - Charter Communications
Post by: WayWardCloud on May 30, 2018, 01:10:02 AM
An even more cynical person might notice that the deal was struck a month before the announcement of CEO Vittorio Colao's retirement and that some leaders have a strong desire to leave an impression of grandeur behind them while others only care about maximizing shareholder value. Heck, the leader of the second type might even be aware of the upcoming retirement and decide to start negotiating again right around that time!
...But we're getting off topic ;)
Title: Re: CHTR - Charter Communications
Post by: cameronfen on May 30, 2018, 05:12:25 AM
"eg Vodafone raising debt to buy UnityMedia in Germany for 12X instead of buying back their own shares at 7X"

If I was a cynic, which I probably am, I'd say the seller knows more than the buyer. The buyer probably thinks growth is in the cards, the seller probably thinks something like this country's government/market is handicapping returns.

I agree I dont understand why VOD values cable assets higher than itself, maybe its acquistive management and maybe its because cable is worth more in a 5g world.  But vodaphone has mobile assets in Germany so likely liberty's cable assets in Germany are worth more to VOD than to liberty.  So one way of looking at it is saying cable worth more than telecos.  The other more negative view is that both cable and wireless assets are dominanted by companies that have both. 
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on May 30, 2018, 05:30:00 AM
http://www.dailymail.co.uk/health/article-5784487/The-roll-5G-wireless-service-massive-health-experiment-public-health-expert-warns-a.html

Everything I read , 5g is moving fast globally. If it hits critical mass faster than people expect then pay TV and even broadband wired will drop off faster than people expect. I want to see charter CEO be more aggressive to address this. Or at least buy back a ton of shares.

Another good article -

"John Malone led Liberty Communications (majority stakeholder in Charter Cable) has been busy in Europe as of late. Liberty has struck a deal with Deutsche Telekom (DTE) to sell Liberty's Austrian cable TV entity to Deutsche Telekom. Vodafone and Liberty merged into a joint venture in the Netherlands in 2016 to provide mobile, broadband and cable TV as a single entity. And Vodafone and Liberty Communications have also developed a plan where Vodafone will purchase various cable TV entities off of Liberty Communications throughout other parts of Europe. Last Liberty reversed direction on rolling out the new technical upgrades to the infrastructure, saying they will implement it when they see the need and willingness from customers to pay for faster speeds. Why this change in position for Liberty Communications, which earlier was purchasing MNO's and talking expansion? The eSIM technology along with the onslaught of IoT could be the primary motivators shaping Liberty's recent decisions to strategically sell to or joint venture with MNO's throughout the world, and why I believe, they will be looking towards the US next.

Just as a reminder, there is an agreement in place between Comcast and Charter until May 8, 2018 where any negotiations by either Charter or Comcast with any mobile carrier will require the consent of the other entity"

https://seekingalpha.com/article/4152202-cable-mobile-telecom-mergers-technology-force-now

Title: Re: CHTR - Charter Communications
Post by: Astrea on June 01, 2018, 05:26:46 AM
Topical commentary...

AT&T comments on Fixed Wireless 5G – Cowen conference 30 May 2018

Colby Synesael

And as it relates to fixed wireless, I feel like that’s something about a year ago you guys were talking about.  But I have not heard as much of late. What is your view there?

John Stephens (CFO AT&T)

Our network guys can do it, it works. If you think about fixed wireless using millimeter wave in urban settings, we have tested, we tested millimeter wave in Austin back in 2016 […]. We've had one gig speeds on these point-to-point connections, it has worked really well.

Challenge for us is not the network or the team can’t build it or they have the knowledge - they can. It's the cost efficiency. Once you get that, if you will as I describe it, the fixed wireless connection from the alley to your house, that's great, you can do that, but you have to get it from the alley into the core network. And so you have to have fiber in that alley or you have a collection of small cells to hand it off and in doing so building all that out can be very expensive when you're likely doing it in a urban market in a residential area that already has a lot of fiber or already has a lot of competition from the incumbent Telco or the incumbent cable company.

So, our challenge with regard to fixed wireless from that perspective from the urban setting is really about the business case and what share market you get and how much it would cost to do the so to speak backhaul, if that makes sense.

Colby Synesael

So, not a technology issue, it’s economics.

John Stephens

Yes, the guys, the network guys have proven, well, we're getting gig speeds in Austin in 2016 on some point-to-point for business and we will see fixed wireless be used in that sense in manufacturing operations with robotic equipment and machines where business operations just want to connect those machines back to a central point to manage and have information.

So, I would expect we will see a lot of those applications but the general residential broadband solution, the economics for us don’t seem to work. And you’ve got to remember we have 30 million of our customer base mainly consumers that we built out for U-verse, so that means there is 30 million of our base that has fiber near the home, and so taking the last mile and adding it into fiber or using the network that is already there can give great speeds and great results without shifting to that other technology.

So, if you will, taking the last 500 feet with fiber and having that dedicated capability to the home, may be very inexpensive for us compared to the alternative and give the customer a tremendous level of service. So, our history, our collection of local exchange assets, our collection of U-verse investments, our extensive fiber footprint across the country because of our legacy AT&T as well as the local exchange companies, gives us an advantage in having a choice in how to deliver. We can do this a number of ways, we are not tied to just one technology.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on June 01, 2018, 08:14:50 AM
I don't quite get the back haul system. If I sit in my living room and pop out my mobile phone on 4g it just works. Is it not direct from tower to phone or it goes somewhere where there is actual physical fibre ?
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on June 01, 2018, 08:28:20 AM
I don't quite get the back haul system. If I sit in my living room and pop out my mobile phone on 4g it just works. Is it not direct from tower to phone or it goes somewhere where there is actual physical fibre ?

These guys do a good job of explaining the technology & use cases (not sure how promotional either video is.)

https://youtu.be/oxCOjMGYP3g

https://youtu.be/v-Jog34Ovco

---

Here's a webinar on small cell backhaul & 5G.
I only watched the 1st 10 minutes as other work demands my attention but I will watch the rest of it this weekend (at the beach, on my phone.)

https://youtu.be/tTN-qQUG7T4

---

And THANKS to everyone for such a robust & informative discussion (the best anywhere on the GoogleNets.)

I'm gonna stick with what another poster said earlier and, "Let Malone figure it out" for me & other shareholders.
Title: Re: CHTR - Charter Communications
Post by: stevevri on June 01, 2018, 10:51:08 AM
This is a vast over simplification and someone could correct me if I'm wrong. I've built a bunch of wifi networks both corporate and residential.

I think thinking of WiFi helps here.

If you have a pretty small house or apartment, then it's simple you plug in a WiFi point and it is wired to the wall and all is good. It gets good connection from the wire, and delivers to clients at a good rate as long as they are in range.

Now say your house is bigger and you need an access point. That access point has to be placed at a spot that it gets "good wireless signal" to the base station and also extends the signal for the rest of your house. If the access point is connecting wirelessly to the base station you will lose some internet speed even if you have "good signal" from your device (phone) to the access point.

This is usually okay and unnoticed but as the house or building gets larger if you kept chaining these things together then the loss of speed from each station connecting to each other starts to have an affect.

You could be in some far corner of your house and have great WiFi Signal, but because that access point is talking to another access point which is talking to the base station all wirelessly your connection isn't very great.

How do you fix this? You wire all the access points.

I believe there is a similar dynamic going on here and that is the back-haul or fiber. Keep in mind that to achieve top speeds they will probably need a lot of fiber to make sure each access point has a great connection.

So while a 5G tower may provide 1gbps to customers a certain distance. The distance at which that tower can provide enough bandwidth to another tower to provide 1gbps... No clue. Either it's going to be a ton closer then the service range or it may not be a good idea at all and each tower may need fiber.

And that's where you start needing a lot of fiber and things get expensive. While say Charter or Comcast already have a ton of wire that is capable of this.
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on June 03, 2018, 10:38:49 AM
I read somewhere, but can't find the source to cite, that it cost around $1,000 per home to run fiber & that Charter cable passes by about 50 million homes (Comcast 55 million) +/- :: Which would mean a replacement cost of at least $50 billion just for what Charter owns.

Here's a link covering cost per mile in varying geographies, mostly 2003 to 2010 but there's some more recent figures.

https://www.itscosts.its.dot.gov/its/benecost.nsf/DisplayRUCByUnitCostElementUnadjusted?ReadForm&UnitCostElement=Fiber+Optic+Cable+Installation+&Subsystem=Roadside+Telecommunications+

---

and a brochure discussing some of the vagaries of installations,

http://www.bbpmag.com/2011mags/marchapril11/BBP_MarApr_CostOfFiber.pdf

---

Of course, they aren't monetizing the entire network & that + any pricing power + innovative new bundling/un-bundling = opportunity.

---

As to 5G, I'll leave it alone & trust in Malone (jockey bet...)
I'm pretty sure he hasn't been spending all that cap on a biz that he doesn't fully understand potential disruptions.
Title: Re: CHTR - Charter Communications
Post by: cameronfen on June 03, 2018, 11:42:34 AM
I read somewhere, but can't find the source to cite, that it cost around $1,000 per home to run fiber & that Charter cable passes by about 50 million homes (Comcast 55 million) +/- :: Which would mean a replacement cost of at least $50 billion just for what Charter owns.

Here's a link covering cost per mile in varying geographies, mostly 2003 to 2010 but there's some more recent figures.

https://www.itscosts.its.dot.gov/its/benecost.nsf/DisplayRUCByUnitCostElementUnadjusted?ReadForm&UnitCostElement=Fiber+Optic+Cable+Installation+&Subsystem=Roadside+Telecommunications+

---

and a brochure discussing some of the vagaries of installations,

http://www.bbpmag.com/2011mags/marchapril11/BBP_MarApr_CostOfFiber.pdf

---

Of course, they aren't monetizing the entire network & that + any pricing power + innovative new bundling/un-bundling = opportunity.

---

As to 5G, I'll leave it alone & trust in Malone (jockey bet...)
I'm pretty sure he hasn't been spending all that cap on a biz that he doesn't fully understand potential disruptions.

Not saying charter will do poorly and not trying to start anything, but if it was any other stock, people here would be rightly critical of you for just trusting management instead of figuring out whether the existential risk to your industry is going to come to fuition.  I can't figure it out, thats why Im not in. 
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on June 03, 2018, 01:16:33 PM
You don’t have to trust Malone to be in Charter, you just watch the economics either unfold as expected or not. It will be a slow process, so there should be time to react accordingly.
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on June 03, 2018, 01:30:37 PM
I read somewhere, but can't find the source to cite, that it cost around $1,000 per home to run fiber & that Charter cable passes by about 50 million homes (Comcast 55 million) +/- :: Which would mean a replacement cost of at least $50 billion just for what Charter owns.

Here's a link covering cost per mile in varying geographies, mostly 2003 to 2010 but there's some more recent figures.

https://www.itscosts.its.dot.gov/its/benecost.nsf/DisplayRUCByUnitCostElementUnadjusted?ReadForm&UnitCostElement=Fiber+Optic+Cable+Installation+&Subsystem=Roadside+Telecommunications+

---

and a brochure discussing some of the vagaries of installations,

http://www.bbpmag.com/2011mags/marchapril11/BBP_MarApr_CostOfFiber.pdf

---

Of course, they aren't monetizing the entire network & that + any pricing power + innovative new bundling/un-bundling = opportunity.

---

As to 5G, I'll leave it alone & trust in Malone (jockey bet...)
I'm pretty sure he hasn't been spending all that cap on a biz that he doesn't fully understand potential disruptions.

Not saying charter will do poorly and not trying to start anything, but if it was any other stock, people here would be rightly critical of you for just trusting management instead of figuring out whether the existential risk to your industry is going to come to fuition.  I can't figure it out, thats why Im not in.

I was just hammering my confirmation bias gland.

I'd welcome a truly convincing & well cited bear mauling of an analysis, to keep me from buying more if it dipped hard.
Title: Re: CHTR - Charter Communications
Post by: cameronfen on June 03, 2018, 04:14:35 PM
I read somewhere, but can't find the source to cite, that it cost around $1,000 per home to run fiber & that Charter cable passes by about 50 million homes (Comcast 55 million) +/- :: Which would mean a replacement cost of at least $50 billion just for what Charter owns.

Here's a link covering cost per mile in varying geographies, mostly 2003 to 2010 but there's some more recent figures.

https://www.itscosts.its.dot.gov/its/benecost.nsf/DisplayRUCByUnitCostElementUnadjusted?ReadForm&UnitCostElement=Fiber+Optic+Cable+Installation+&Subsystem=Roadside+Telecommunications+

---

and a brochure discussing some of the vagaries of installations,

http://www.bbpmag.com/2011mags/marchapril11/BBP_MarApr_CostOfFiber.pdf

---

Of course, they aren't monetizing the entire network & that + any pricing power + innovative new bundling/un-bundling = opportunity.

---

As to 5G, I'll leave it alone & trust in Malone (jockey bet...)
I'm pretty sure he hasn't been spending all that cap on a biz that he doesn't fully understand potential disruptions.

Not saying charter will do poorly and not trying to start anything, but if it was any other stock, people here would be rightly critical of you for just trusting management instead of figuring out whether the existential risk to your industry is going to come to fuition.  I can't figure it out, thats why Im not in.

I was just hammering my confirmation bias gland.

I'd welcome a truly convincing & well cited bear mauling of an analysis, to keep me from buying more if it dipped hard.

No good bear thesis from me.  But if if I was in Charter, I'd be watching Asian telecoms/cable companies really closely to see the impact of 5G. 
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on June 03, 2018, 08:22:54 PM
I read somewhere, but can't find the source to cite, that it cost around $1,000 per home to run fiber & that Charter cable passes by about 50 million homes (Comcast 55 million) +/- :: Which would mean a replacement cost of at least $50 billion just for what Charter owns.

Here's a link covering cost per mile in varying geographies, mostly 2003 to 2010 but there's some more recent figures.

https://www.itscosts.its.dot.gov/its/benecost.nsf/DisplayRUCByUnitCostElementUnadjusted?ReadForm&UnitCostElement=Fiber+Optic+Cable+Installation+&Subsystem=Roadside+Telecommunications+

---

and a brochure discussing some of the vagaries of installations,

http://www.bbpmag.com/2011mags/marchapril11/BBP_MarApr_CostOfFiber.pdf

---

Of course, they aren't monetizing the entire network & that + any pricing power + innovative new bundling/un-bundling = opportunity.

---

As to 5G, I'll leave it alone & trust in Malone (jockey bet...)
I'm pretty sure he hasn't been spending all that cap on a biz that he doesn't fully understand potential disruptions.

Not saying charter will do poorly and not trying to start anything, but if it was any other stock, people here would be rightly critical of you for just trusting management instead of figuring out whether the existential risk to your industry is going to come to fuition.  I can't figure it out, thats why Im not in.

I was just hammering my confirmation bias gland.

I'd welcome a truly convincing & well cited bear mauling of an analysis, to keep me from buying more if it dipped hard.

No good bear thesis from me.  But if if I was in Charter, I'd be watching Asian telecoms/cable companies really closely to see the impact of 5G.

++
Title: Re: CHTR - Charter Communications
Post by: JRM on June 04, 2018, 09:34:12 AM
"When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."-Buffett

Not that Comcast or Charter currently have bad economics, but the barbarians may be at the gates.
Title: Re: CHTR - Charter Communications
Post by: HalfMeasure on June 04, 2018, 10:08:13 AM
"When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."-Buffett

Not that Comcast or Charter currently have bad economics, but the barbarians may be at the gates.

I'm not sure what is evoking that quote. Broadband is a better business than cable TV ever was, and cable TV made a lot of billionaires.
Title: Re: CHTR - Charter Communications
Post by: chrispy on June 04, 2018, 11:54:42 AM
Yea...

The billion dollar question is, does 5g increase the value of cable tremendously or remove the need for cable?

The more I read, cable benefits. Seems remarkably similar to the late 90s
Title: Re: CHTR - Charter Communications
Post by: Liberty on June 04, 2018, 12:22:06 PM
Apple just announced at WWDC that they have a deal with Charter to have all of Spectrum content be available through the Apple TV.
Title: Re: CHTR - Charter Communications
Post by: chesko182 on June 04, 2018, 12:46:41 PM
Apple previewed tvOS 12, which it calls "the powerful operating system designed for enjoying entertainment on the big screen, which takes the cinematic experience of Apple TV 4K to the next level with support for Dolby Atmos audio, convenient new features to easily access the shows and movies you love and breathtaking aerials shot from space." Apple also announced that Charter Communications (CHTR) will begin offering Apple TV 4K to their customers. Later this year, Charter's nearly 50 million customers will have access to Apple TV 4K via an all-new Spectrum TV app. In addition, as part of this collaboration, Charter will be offering iPhone and iPad to customers as they grow their mobile presence, Apple stated.

from:
https://thefly.com/landingPageNews.php?id=2740380

my understanding is Apple TV's OS will be available directly from the Spectrum TV app which means you won't need an appleTV (box) if you already have spectrum, right? This would be a nice differentiator...
Title: Re: CHTR - Charter Communications
Post by: undervalued on June 04, 2018, 04:07:13 PM
Apple previewed tvOS 12, which it calls "the powerful operating system designed for enjoying entertainment on the big screen, which takes the cinematic experience of Apple TV 4K to the next level with support for Dolby Atmos audio, convenient new features to easily access the shows and movies you love and breathtaking aerials shot from space." Apple also announced that Charter Communications (CHTR) will begin offering Apple TV 4K to their customers. Later this year, Charter's nearly 50 million customers will have access to Apple TV 4K via an all-new Spectrum TV app. In addition, as part of this collaboration, Charter will be offering iPhone and iPad to customers as they grow their mobile presence, Apple stated.

from:
https://thefly.com/landingPageNews.php?id=2740380

my understanding is Apple TV's OS will be available directly from the Spectrum TV app which means you won't need an appleTV (box) if you already have spectrum, right? This would be a nice differentiator...

What you just wrote confused me as an Apple TV and iPhone user. I think you meant, all Spectrum customers will have access to the Spectrum app IN Apple TV or access Spectrum app in iPhone or iPads.
Title: Re: CHTR - Charter Communications
Post by: gokou3 on June 04, 2018, 05:03:32 PM
Apple previewed tvOS 12, which it calls "the powerful operating system designed for enjoying entertainment on the big screen, which takes the cinematic experience of Apple TV 4K to the next level with support for Dolby Atmos audio, convenient new features to easily access the shows and movies you love and breathtaking aerials shot from space." Apple also announced that Charter Communications (CHTR) will begin offering Apple TV 4K to their customers. Later this year, Charter's nearly 50 million customers will have access to Apple TV 4K via an all-new Spectrum TV app. In addition, as part of this collaboration, Charter will be offering iPhone and iPad to customers as they grow their mobile presence, Apple stated.

from:
https://thefly.com/landingPageNews.php?id=2740380

my understanding is Apple TV's OS will be available directly from the Spectrum TV app which means you won't need an appleTV (box) if you already have spectrum, right? This would be a nice differentiator...

What you just wrote confused me as an Apple TV and iPhone user. I think you meant, all Spectrum customers will have access to the Spectrum app IN Apple TV or access Spectrum app in iPhone or iPads.

Looks like yes, the Apple TV + spectrum app will be able to replace the Spectrum cable box.  This is good and bad - on the good side, spectrum can save equipment and installation costs --> lower customer acquisition cost.  On the downside, switching seems to have become easier (I imagine competitors can have similar apps and form the same relationship with Apple).  Also, people at homes with multiple TV but not multiple Apple TV boxes cannot take full advantage of being cable box free (or can Apple TV support multiple TVs at once?)

Apple TV can replace your Charter Spectrum cable box later this year
https://www.cnet.com/news/apple-tv-can-replace-your-charter-spectrum-cable-box-later-this-year/
Title: Re: CHTR - Charter Communications
Post by: chesko182 on June 04, 2018, 06:14:37 PM
I see now, I completely misread the statement which to be fair was poorly written. ("customers will have access to Apple TV 4K via an all-new Spectrum TV app")

I think that if you're already paying for internet the internet service from Spectrum, this might serve to reduce churn. I imagine they get something out of this and it seems like a win-win for both.
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on June 04, 2018, 07:12:15 PM
Does anyone know if the Spectrum app on Apple TV would include Cloud DVR option? My guess is yes. Otherwise very few people will subscribe to it.
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on June 04, 2018, 07:28:32 PM
The set top boxes are yesterday’s hardware because generally speaking their user GUI and user friendliness is just crap. Apps in a device of your choice are going to get you a much better user experience.
Title: Re: CHTR - Charter Communications
Post by: FiveSigma on June 05, 2018, 07:06:06 AM
The Apple deal seems more exciting than the (non) reaction of the market to it.

If this becomes a secular trend and there is are rational reasons to believe that it will (as Apple is just better at making great consumer electronics than any cableco and it's not their core business anyway, so they shouldn't be in it), then R&D and more importantly a large chunk of CPE capex (which is at ~$2.5B out of ~$7.5B) permanently goes away fundamentally altering the FCF profile of the business.
Title: Re: CHTR - Charter Communications
Post by: jmp8822 on June 05, 2018, 07:41:36 AM
The Apple deal seems more exciting than the (non) reaction of the market to it.

If this becomes a secular trend and there is are rational reasons to believe that it will (as Apple is just better at making great consumer electronics than any cableco and it's not their core business anyway, so they shouldn't be in it), then R&D and more importantly a large chunk of CPE capex (which is at ~$2.5B out of ~$7.5B) permanently goes away fundamentally altering the FCF profile of the business.

I wouldn't get too excited about the AppleTV deal.  I already cut my Spectrum cable subscription and subscribe to YouTube TV, but still have Spectrum internet.  It is $40 per month with cloud DVR and all the sports/live channels that I want.  In my opinion, the people that would be excited to watch TV on an Apple TV would just cut cable and go to Sling, PS Vue, Hulu Live TV, YouTube TV, etc.
Title: Re: CHTR - Charter Communications
Post by: cmlber on June 05, 2018, 09:44:18 AM
The Apple deal seems more exciting than the (non) reaction of the market to it.

If this becomes a secular trend and there is are rational reasons to believe that it will (as Apple is just better at making great consumer electronics than any cableco and it's not their core business anyway, so they shouldn't be in it), then R&D and more importantly a large chunk of CPE capex (which is at ~$2.5B out of ~$7.5B) permanently goes away fundamentally altering the FCF profile of the business.

This trend is well known, nothing surprising at all about the announcement hence the non-reaction.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on June 06, 2018, 12:21:06 AM
"Spectrum Mobile is likely to steal customers from all four nationwide carriers, but for Verizon the blow will be cushioned by the payments it gets from Charter each time the cable company moves data across its network. Charter is reportedly paying Verizon $5 per gigabyte."

Well my experience with affiliate programs suggests this can often be the better deal with 5g coming. I mean you become a marketing organization, sell your customers 5g without any investment and get say a 50 50 profit share. It really is a better deal. And with cable fibre and putting up antennas on utility poles they get a capex free participation bonus. The thesis that owning the airwaves is the best return may be false. I can see it being true if you're the only one who has it and gets all the customers. But I imagine customers need to be sold hence those with existing customers and relationships have an advantage too.

https://www.multichannel.com/needtoknow/need-to-know-cable-is-wired-for-5g
Title: Re: CHTR - Charter Communications
Post by: FiveSigma on June 06, 2018, 08:14:36 AM
It may be a stupid question, but why would Verizon even want to enter in agreement with Charter?

Giving Charter, a competitor, quad play it makes their business stickier while also enabling that competitor to steal a portion your wireless customers.

What's in it for Verizon?

Are they required by law to allow access to their infrastructure via a MVNO for interested third parties?
Title: Re: CHTR - Charter Communications
Post by: cmlber on June 06, 2018, 08:57:50 AM
It may be a stupid question, but why would Verizon even want to enter in agreement with Charter?

Giving Charter, a competitor, quad play it makes their business stickier while also enabling that competitor to steal a portion your wireless customers.

What's in it for Verizon?

Are they required by law to allow access to their infrastructure via a MVNO for interested third parties?

A while ago Verizon bought spectrum from Comcast/Charter and this was part of the deal. 
Title: Re: CHTR - Charter Communications
Post by: stevevri on June 06, 2018, 09:53:36 AM
One thing to remember with the MVNO operations is the fact that 80% of mobile traffic passes through Comcast or Charter's network via WIFI.

These MVNO customers are probably at home or at work using WiFi most of the day. This is traffic that often goes over Comcast or Charter's network. So essentially Comcast or Charter can use the MVNO when people are out of their homes. This has to be more favorable then a straight MVNO operation.

Then you have Comcast and Charter's partnership.
Title: Re: CHTR - Charter Communications
Post by: Liberty on June 14, 2018, 06:21:10 PM
John Malone:

https://www.wsj.com/articles/media-mogul-john-malone-questions-mergers-of-apples-and-oranges-1529017642
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on June 15, 2018, 12:00:51 AM
weird, and yet as someone posted on DISCK thread he just bought 33 million of shares of DISCK, maybe due to undervaluation but if he's saying it won't ever merge...yet it's a head scratcher.
Title: Re: CHTR - Charter Communications
Post by: globalfinancepartners on June 15, 2018, 05:21:45 AM
Thanks for linking the article Liberty.  I had totally missed it in the paper.

Quote
Though he sold his then-No. 1 cable company Tele-Communications Inc. in 1999 to AT&T, he has made a comeback in recent years, including by orchestrating Charter’s acquisition of Time Warner Cable Inc. in 2016.

Had me thinking of LL Cool J's 'Mama Said Knock you Out'..  - "don't call it a comeback!  i've been here for years!"


John Malone:

https://www.wsj.com/articles/media-mogul-john-malone-questions-mergers-of-apples-and-oranges-1529017642
Title: Re: CHTR - Charter Communications
Post by: globalfinancepartners on June 15, 2018, 05:34:08 AM
saw this today:
The New York State Public Service Commission threatened to revoke its approval of Charter's takeover of Time Warner Cable. The regulator said Charter had failed to meet a condition of the approval requiring certain goals for expanding broadband service availability. Charter has also been hit with a $2 million penalty.
Title: Re: CHTR - Charter Communications
Post by: Rasputin on June 15, 2018, 05:44:00 AM
That accusation and penalty from the NY regulator is part of a joint effort to pressure CHTR to cave to the unions' demand.  See link below

https://www.stamfordadvocate.com/business/article/Charter-Communications-technicians-strike-reaches-12791517.php
Title: Re: CHTR - Charter Communications
Post by: oscarazocar on June 15, 2018, 07:14:59 AM
John Malone:

https://www.wsj.com/articles/media-mogul-john-malone-questions-mergers-of-apples-and-oranges-1529017642

He's saying he doesn't want DISCA to merge with CHTR.  He states here, and has stated elsewhere, that he thinks there is logic in merging DISCA with other content companies.
Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on June 18, 2018, 01:02:33 PM
“They picked on the wrong union,” Chris Erikson, Local 3’s business manager, said in an interview this week. “We believe working people are entitled to security in their retirement and medical coverage.”

I hate unions. 
Title: Re: CHTR - Charter Communications
Post by: wisowis on June 21, 2018, 08:04:20 PM
https://sumzero.com/headlines/business_services/409-why-the-us-cable-industry-is-poised-for-recovery
Title: Re: CHTR - Charter Communications
Post by: vince on June 21, 2018, 09:23:19 PM
I would pay a good amount for the full sumzero report if anyone has access
Title: Re: CHTR - Charter Communications
Post by: Liberty on June 22, 2018, 02:39:26 AM
Based on the ANH monthly filling, looks like CHTR is buying back shares at a good clip (1.1% O/S, if ANH is maintaining its ratio) :

https://www.sec.gov/Archives/edgar/data/914545/000089924318017558/xslF345X03/doc4.xml
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on June 22, 2018, 04:10:19 AM
I'm always weary of reports with a view. He buys a big stake after a hit to the price then justifies how it's all good with price targets as high as 500 for chtr. But I think the truth is there is uncertainty and unknowns. Having said that I'm not ready to bail yet but unless I see it back where it was before by 2020 I'm reducing significantly.
Title: Re: CHTR - Charter Communications
Post by: vince on June 22, 2018, 05:50:56 AM
wonder where the cash is coming from to buyback 3 percent in last 2 months
Title: Re: CHTR - Charter Communications
Post by: Liberty on June 22, 2018, 08:28:12 AM
wonder where the cash is coming from to buyback 3 percent in last 2 months

Depends how long they keep it up. If they do this all year, then they're raising leverage some, which was what Malone/Maffei called for but Rutledge seemed reluctant to do. EBITDA growth should also absorb part of it.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on July 06, 2018, 10:27:23 PM
https://www.livewiremarkets.com/wires/charter-communications-digging-a-moat-to-lay-cable
Title: Re: CHTR - Charter Communications
Post by: JRM on July 07, 2018, 06:44:21 AM
https://www.livewiremarkets.com/wires/charter-communications-digging-a-moat-to-lay-cable

Interesting article, but it completely ignores the 5G issue.  The more I research the more I think 5G will be a strength rather than a threat to Charter.  Even Verizon says that only 25% of the current broadband customer base will be cost effective to convert to fixed wireless.  I'm guessing that number is slightly optimistic, probably more like 20%.  It will be less costly for Charter to build out fixed wireless, if it wants to, than Verizon, AT&T, or any other wireless carrier.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on July 08, 2018, 02:57:09 AM
In this respect I might give the advantage to liberty global since poorer countries subsidize less while richer ones risk throwing a ton of taxpayers incentives to develop 5g faster.
Title: Re: CHTR - Charter Communications
Post by: vince on July 08, 2018, 02:16:50 PM
https://www.livewiremarkets.com/wires/charter-communications-digging-a-moat-to-lay-cable

Interesting article, but it completely ignores the 5G issue.  The more I research the more I think 5G will be a strength rather than a threat to Charter.  Even Verizon says that only 25% of the current broadband customer base will be cost effective to convert to fixed wireless.  I'm guessing that number is slightly optimistic, probably more like 20%.  It will be less costly for Charter to build out fixed wireless, if it wants to, than Verizon, AT&T, or any other wireless carrier.
Hi JRM, could you please show me where Verizon says that or where you saw it?
Title: Re: CHTR - Charter Communications
Post by: JRM on July 08, 2018, 03:46:14 PM
https://www.livewiremarkets.com/wires/charter-communications-digging-a-moat-to-lay-cable

Interesting article, but it completely ignores the 5G issue.  The more I research the more I think 5G will be a strength rather than a threat to Charter.  Even Verizon says that only 25% of the current broadband customer base will be cost effective to convert to fixed wireless.  I'm guessing that number is slightly optimistic, probably more like 20%.  It will be less costly for Charter to build out fixed wireless, if it wants to, than Verizon, AT&T, or any other wireless carrier.
Hi JRM, could you please show me where Verizon says that or where you saw it?

What tipped me off to that number was a post on a VIC article.  The post was almost more informative than the actual article.  What was actually said was "30 million customers" which supposedly correlates to ~25% of the market.  I don't have a good way to double check the denominator in this estimate.  Here's another source: https://www.fiercewireless.com/wireless/editor-s-corner-1-gbps-speeds-verizon-s-5g-residential-fixed-wireless-broadband-service (https://www.fiercewireless.com/wireless/editor-s-corner-1-gbps-speeds-verizon-s-5g-residential-fixed-wireless-broadband-service)
Title: Re: CHTR - Charter Communications
Post by: cameronfen on July 08, 2018, 05:57:24 PM
https://www.livewiremarkets.com/wires/charter-communications-digging-a-moat-to-lay-cable

Interesting article, but it completely ignores the 5G issue.  The more I research the more I think 5G will be a strength rather than a threat to Charter.  Even Verizon says that only 25% of the current broadband customer base will be cost effective to convert to fixed wireless.  I'm guessing that number is slightly optimistic, probably more like 20%.  It will be less costly for Charter to build out fixed wireless, if it wants to, than Verizon, AT&T, or any other wireless carrier.
Hi JRM, could you please show me where Verizon says that or where you saw it?

What tipped me off to that number was a post on a VIC article.  The post was almost more informative than the actual article.  What was actually said was "30 million customers" which supposedly correlates to ~25% of the market.  I don't have a good way to double check the denominator in this estimate.  Here's another source: https://www.fiercewireless.com/wireless/editor-s-corner-1-gbps-speeds-verizon-s-5g-residential-fixed-wireless-broadband-service (https://www.fiercewireless.com/wireless/editor-s-corner-1-gbps-speeds-verizon-s-5g-residential-fixed-wireless-broadband-service)

I've said this before on this thread but Carlos Slim has expressed the same sentiment (5G wireless broadband is not economic for most people) on his most recent America Movil conference call. 
Title: Re: CHTR - Charter Communications
Post by: LongTermView on July 08, 2018, 06:17:51 PM
Here's another source: https://www.fiercewireless.com/wireless/editor-s-corner-1-gbps-speeds-verizon-s-5g-residential-fixed-wireless-broadband-service (https://www.fiercewireless.com/wireless/editor-s-corner-1-gbps-speeds-verizon-s-5g-residential-fixed-wireless-broadband-service)

The pie charts here are interesting:

Total Millimeter Wave Spectrum
WITHOUT
FiberTower's Terminated Licenses:
41% Verizon
45% FCC
10% Others
  4% AT&T

Total Millimeter Wave Spectrum
WITH
FiberTower's Terminated Licenses:
41% Verizon
33% FCC
  9% Others
17% AT&T
Title: Re: CHTR - Charter Communications
Post by: HalfMeasure on July 08, 2018, 06:23:40 PM
Anyone have a good resource for broadband market share on a regional level?
Title: Re: CHTR - Charter Communications
Post by: vince on July 08, 2018, 10:35:16 PM
https://www.livewiremarkets.com/wires/charter-communications-digging-a-moat-to-lay-cable

Interesting article, but it completely ignores the 5G issue.  The more I research the more I think 5G will be a strength rather than a threat to Charter.  Even Verizon says that only 25% of the current broadband customer base will be cost effective to convert to fixed wireless.  I'm guessing that number is slightly optimistic, probably more like 20%.  It will be less costly for Charter to build out fixed wireless, if it wants to, than Verizon, AT&T, or any other wireless carrier.
Hi JRM, could you please show me where Verizon says that or where you saw it?

What tipped me off to that number was a post on a VIC article.  The post was almost more informative than the actual article.  What was actually said was "30 million customers" which supposedly correlates to ~25% of the market.  I don't have a good way to double check the denominator in this estimate.  Here's another source: https://www.fiercewireless.com/wireless/editor-s-corner-1-gbps-speeds-verizon-s-5g-residential-fixed-wireless-broadband-service (https://www.fiercewireless.com/wireless/editor-s-corner-1-gbps-speeds-verizon-s-5g-residential-fixed-wireless-broadband-service)
Thanks JRM, was the VIC article a response to a Chtr writeup?
Title: Re: CHTR - Charter Communications
Post by: JRM on July 09, 2018, 03:52:25 AM
It was this post: https://www.valueinvestorsclub.com/idea/CHARTER_COMMUNICATIONS_INC/141186 (https://www.valueinvestorsclub.com/idea/CHARTER_COMMUNICATIONS_INC/141186), and message #20.
Title: Re: CHTR - Charter Communications
Post by: vince on July 09, 2018, 06:06:29 AM
thx again
Title: Re: CHTR - Charter Communications
Post by: vince on July 10, 2018, 05:34:12 PM
Craig Eder Moffett - MoffettNathanson LLC - Founding Partner
Well, let's -- since we're more focused on broadband now, I'm going to change the subject away from broadband and go to video for a second. I
guess -- so obviously, OTT and cord cutting are the big stories that people are focused on, and that's going to continue to pressure subscribers. I
guess, the thing that would be most helpful for your investors is if you can just take us through the economics of what it's like to lose a subscriber.
How -- in essence, how important is it that you have high video numbers? Or are video subscribers less important than a lot of people crack them
up to be?
David N. Watson - Comcast Corporation - Senior EVP & President, CEO, Comcast Cable
Let me start, to make it very clear, we still think video is a very important category. We're still going to compete. We have a great product in X1. I
think one of the things we've learned through this OTT period is that a great product like X1 with good value between excellent DVR service, every
one of our X1 customers has Stream connected to it, so you can do TV everywhere elegantly. Applications can come together, like Netflix and
YouTube and others. So by -- we're going to compete with video. But to the extent that you lose a video customer, we've also taken the time to
look at the marginal economics, to your point, of what happens when you lose that video relationship. And there are a couple of things that jump
out in the way we're managing the business. One is that we -- that customers always get the best deal through packaging. To the extent that video
that they either downgrade, they don't have video, that multi-product discount, regardless of video, goes away. So broadband pricing will go up.
Second thing is there's less programming cost. And the third thing is that it's -- there's generally more noise attached to servicing the video customer,
more CPE, more activity. And it's just the more efficient relationship to manage in regards to broadband, so your cost to serve is improved. So you
take all of those things, this is a very manageable transition in terms of net cash flow. And you look at...
Craig Eder Moffett - MoffettNathanson LLC - Founding Partner
Do you want to go out on a limb and put a number on what a customer -- what a video customer -- what you really lose when a video customer
unbundles the video?
David N. Watson - Comcast Corporation - Senior EVP & President, CEO, Comcast Cable
Well, I won't go way out there, but I will say this that we segment the marketplace. And a good part -- we've been doing this for a while, but we
look at the -- all the video relationships, and some are fantastic and a lot of them are, most. We feel great about, full video, package -- skinnier
packaging with broadband. There's a lot of opportunities still. But we've seen some low-end customers that have dropped video, maintained
broadband, and those low-end customers, you actually -- it's accretive when that happens. And so the trick now is to make sure you're very focused
and you're doing a really good job segmenting the marketplace, so you understand that in the first place. So I think it's a manageable transition,
very focused on this. Again, we think the connectivity business has a long runway, and so that's why we shifted our focus.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on July 14, 2018, 11:51:24 PM
I have a friend who went to internet TV. He even gets a lag, he's on a slow connection and doesn't care too much. I think pay TV is definitely going to drop faster than people
think.

What do people think on charter debt load? It's high and some have said tangible equity is negative. In fact charter even went bankrupt in 2009. Are debt risks being underestimated or is this a different situation, likely higher cash flows, better rates , and possible inflationary future ?
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on July 15, 2018, 05:47:45 AM
I have a friend who went to internet TV. He even gets a lag, he's on a slow connection and doesn't care too much. I think pay TV is definitely going to drop faster than people
think.

What do people think on charter debt load? It's high and some have said tangible equity is negative. In fact charter even went bankrupt in 2009. Are debt risks being underestimated or is this a different situation, likely higher cash flows, better rates , and possible inflationary future ?

When CHTR went bankrupt (I think it was a Paul Allen vehicle then), it was badly run from an operational POV, subscale and the debt load was much higher in terms of EBITDA/EV. CHTR debt right now is 4-4.5x. EV/EBITDA which is in the same ballpark than most utility companies and since the business is comparable (if not better), I feel it is manageable. CHTR tangible equity is in fact negative, yahoo shows it as such and should be about correct.
Title: Re: CHTR - Charter Communications
Post by: Deepdive on July 15, 2018, 07:17:41 AM
I hope others here can help me understand the risk in CHTR

1) Cord cutting - many have pointed out that video doesn't have much margin and broadband has very high margin.  If cord cutting accelerates, how does CHTR content cost scales down?  How does CHTR support staff scales down?  It is terrible to work at a company that is constantly scaling down.  How does CHTR retain the employees in a scale down?  How are CHTR's contracts structured for content cost?  Is it 100% variable?  Is there a fixed component? 

2) 5G risk - Many have mentioned that the Telco would be wiser to buy CHTR.   Can someone explain the overall physics?  I have heard leaves, rain etc hurting milimeter waves performance.  Is there a certain density like NYC where it makes sense to deploy?  Can the Telcos selectively deploy in NYC, Chicago, LA etc?  There is also talk that only sub 3GHZ will be used.  Any thoughts? 

3) Emerging 5G risk - Low orbit satellite? Li Lu is supposedly backing someone for a 5G venture?  What are the rumoured disrupted technology?

4) Risk of 100% fiber to the house vs the current Fiber to the node and then co-axial to the house

5) Debt covenants - Anyone looked at them? 

What are we missing? 
Title: Re: CHTR - Charter Communications
Post by: HalfMeasure on July 15, 2018, 09:21:05 AM
I hope others here can help me understand the risk in CHTR

1) Cord cutting - many have pointed out that video doesn't have much margin and broadband has very high margin.  If cord cutting accelerates, how does CHTR content cost scales down?  How does CHTR support staff scales down?  It is terrible to work at a company that is constantly scaling down.  How does CHTR retain the employees in a scale down?  How are CHTR's contracts structured for content cost?  Is it 100% variable?  Is there a fixed component? 

2) 5G risk - Many have mentioned that the Telco would be wiser to buy CHTR.   Can someone explain the overall physics?  I have heard leaves, rain etc hurting milimeter waves performance.  Is there a certain density like NYC where it makes sense to deploy?  Can the Telcos selectively deploy in NYC, Chicago, LA etc?  There is also talk that only sub 3GHZ will be used.  Any thoughts? 

3) Emerging 5G risk - Low orbit satellite? Li Lu is supposedly backing someone for a 5G venture?  What are the rumoured disrupted technology?

4) Risk of 100% fiber to the house vs the current Fiber to the node and then co-axial to the house

5) Debt covenants - Anyone looked at them? 

What are we missing?

This might be helpful on #2 - Nokia on fixed-mobile convergence https://onestore.nokia.com/asset/201230
Title: Re: CHTR - Charter Communications
Post by: HalfMeasure on July 23, 2018, 10:12:44 AM
Does anyone here have a sense for how the marginal unit economics of upgrade a household to all digital and doing a DOCSIS 3.1 upgrade, or has anyone come across resources useful in doing that math?
Title: Re: CHTR - Charter Communications
Post by: Liberty on July 24, 2018, 01:32:37 PM
http://ir.charter.com/phoenix.zhtml?c=112298&p=irol-newsArticle&ID=2359762

Quote
Dr. Malone said, "I am retiring from the board of Charter to reduce my travel and focus on fewer board positions. I remain heavily invested in Charter, both financially and emotionally, and am excited about its prospects. As the Liberty Broadband nominee to the Charter board, Jim Meyer brings a strong track record and wealth of relevant experience, and I will remain an active advisor in my director emeritus role."
Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on July 24, 2018, 03:23:39 PM
Wow.  Thanks.  Not sure what to make of it.  Seems like he is basically trying not to be conflicted or to give away his vote to pave the way for a sirius/ chtr deal.  Maybe Charter buys sirius or at least its spectrum?  The line about spending less time but being present clearly doesn’t make sense
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on July 24, 2018, 04:16:12 PM
Charter is far more likely to buy Liberty Broadband/GCI Liberty than Sirius.
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on July 24, 2018, 04:22:03 PM
Wow.  Thanks.  Not sure what to make of it.  Seems like he is basically trying not to be conflicted or to give away his vote to pave the way for a sirius/ chtr deal.  Maybe Charter buys sirius or at least its spectrum?  The line about spending less time but being present clearly doesn’t make sense

Conflicts between his different entities rarely were an issue for him. My guess is that Malone wants to slow down, he is not 65 any more  8)
Title: Re: CHTR - Charter Communications
Post by: Foreign Tuffett on July 24, 2018, 04:40:33 PM
Wow.  Thanks.  Not sure what to make of it.  Seems like he is basically trying not to be conflicted or to give away his vote to pave the way for a sirius/ chtr deal.  Maybe Charter buys sirius or at least its spectrum?  The line about spending less time but being present clearly doesn’t make sense

Malone is 77. Maybe he's just ready to slow down? I recall reading something, somewhere recently that stated he spends about 50% of his time in Ireland at his castle estate. Either way, Maffei is clearly the "Sith Apprentice" dealmaking heir to Malone's "Darth Vader."

Does anyone know if Malone attended the Sun Valley Conference this year?
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on July 24, 2018, 04:58:22 PM
Quote
Does anyone know if Malone attended the Sun Valley Conference this year?

He did not.
Title: Re: CHTR - Charter Communications
Post by: gokou3 on July 24, 2018, 05:12:32 PM
Does this increase the odds / bring forward timing of M&A activity at Charter?
Title: Re: CHTR - Charter Communications
Post by: walkie518 on July 24, 2018, 05:46:54 PM
in a recent interview, I remember Malone discussing how conflicts can cloud a CEO's judgment and that part of the board's purpose is to mitigate those problems

putting the Sirius CEO in his board seat is likely a way for Malone to place someone without a pay package to have a vote on company matters

It seems Malone remains chairman of Liberty Broadband despite leaving the CHTR board so he still has full control by proxy?

Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on July 25, 2018, 02:40:28 AM
Buffet retired from khc board recently too. Do these moves mean more flexibility to buy or sell ?
Title: Re: CHTR - Charter Communications
Post by: Shooter MacGavin on July 25, 2018, 04:51:19 AM
Buffet retired from khc board recently too. Do these moves mean more flexibility to buy or sell ?


Check out Faux Greg Maffei's Twitter posts in relation to this.
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on July 25, 2018, 05:36:46 AM
Buffet retired from khc board recently too. Do these moves mean more flexibility to buy or sell ?


Check out Faux Greg Maffei's Twitter posts in relation to this.

Thanks, I'd forgotten about that guy.

https://twitter.com/maffei_fake/status/1021736352444903424

https://twitter.com/maffei_fake/status/1021853640254873600

A bit of interesting Sun Valley talk too.
Title: Re: CHTR - Charter Communications
Post by: Foreign Tuffett on July 25, 2018, 06:29:15 AM
Buffet retired from khc board recently too. Do these moves mean more flexibility to buy or sell ?


Check out Faux Greg Maffei's Twitter posts in relation to this.

Thanks, I'd forgotten about that guy.

https://twitter.com/maffei_fake/status/1021736352444903424

https://twitter.com/maffei_fake/status/1021853640254873600

A bit of interesting Sun Valley talk too.

This is a good recommendation, as whoever is behind that Twitter account has an almost encyclopedic knowledge of all things Liberty/John Malone. Sometimes the real Greg Maffei (@gregmaffei) will even engage with him, which is both "meta" and hilarious.
Title: Re: CHTR - Charter Communications
Post by: Liberty on July 25, 2018, 07:03:23 AM
https://weitzinvestments.com/resources/documents/Literature_and_Publications/Commentary/2018/AnalystCorner_CharterCommunications.pdf?1532449650001?dtr

Weitz on CHTR, found via @BluegrassCap
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on July 25, 2018, 09:34:39 AM
I'm unable to think of a more disfavoured USA / EU sector as broadband companies. Do you think governments globally will subsidize a large part of 5g development similar to alternative energy , solar, clean energy?
Title: Re: CHTR - Charter Communications
Post by: Liberty on July 25, 2018, 09:41:05 AM
I'm unable to think of a more disfavoured USA / EU sector as broadband companies. Do you think governments globally will subsidize a large part of 5g development similar to alternative energy , solar, clean energy?

By "disfavoured", do you mean "out of favor/unloved", or do you mean "disadvantaged"?
Title: Re: CHTR - Charter Communications
Post by: HalfMeasure on July 25, 2018, 09:47:13 AM
Do you guys think the weakness today from the Malone news, or from the telecom weakness caused by AT&T? Or any competing explanations? Not endorsing either of the first two as logical.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on July 25, 2018, 10:19:57 AM
Liberty - remains to be seen and my crystal ball is broken )
Title: Re: CHTR - Charter Communications
Post by: Liberty on July 25, 2018, 10:33:50 AM
Liberty - remains to be seen and my crystal ball is broken )

I didn't mean how it'll turn out in the future, I meant when you wrote the first sentence of your previous post, what idea did you have in mind when you wrote that word. I think it changes the meaning of your post, and I'm wondering which you meant.
Title: Re: CHTR - Charter Communications
Post by: undervalued on July 25, 2018, 10:54:53 AM
I think it's because of articles saying it'll be faster cord cutters this year than expected.

https://techcrunch.com/2018/07/25/u-s-cord-cutters-to-reach-33-million-this-year-faster-than-expected/ (https://techcrunch.com/2018/07/25/u-s-cord-cutters-to-reach-33-million-this-year-faster-than-expected/)
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on July 25, 2018, 11:11:48 AM
Ah, I mean disfavoured as in undervalued. I want to see a chart between uptick in data usage and decrease in TV subscribers to streaming services. Also I think that article the comment makes sense..why can't pay TV be like a virtual streaming channel? Choose what channel or even show you want to see on a pay per channel or show basis.
Title: Re: CHTR - Charter Communications
Post by: chrispy on July 25, 2018, 12:22:04 PM
The cord cutting is resulting in ~3% of customers transitioning from a higher revenue, lower margin service (TV) to a lower revenue but higher margin package (broadband only). Does this mean that the 3% attrition is much smaller by the time it hits the earnings?
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on July 25, 2018, 12:47:12 PM
Quote
Does this mean that the 3% attrition is much smaller by the time it hits the earnings?

Earnings will go up if a customer drops linear video and keeps high speed data from Charter. The reason is that stand-alone data only service costs more when it is not bundled with linear video and data service has much higher margin compared to video. There are also less service related costs and CPE costs. You can see this at Cable One for instance which effectively abandoned video and saw its profitability shoot up.

Having said that, Charter prefers to sell more services to each customer since the churn goes down when a customer buys multiple services. This is the main reason they are beginning to offer mobile service.
Title: Re: CHTR - Charter Communications
Post by: BG2008 on July 25, 2018, 12:56:33 PM
Quote
Does this mean that the 3% attrition is much smaller by the time it hits the earnings?

Earnings will go up if a customer drops linear video and keeps high speed data from Charter. The reason is that stand-alone data only service costs more when it is not bundled with linear video and data service has much higher margin compared to video. There are also less service related costs and CPE costs. You can see this at Cable One for instance which effectively abandoned video and saw its profitability shoot up.

Having said that, Charter prefers to sell more services to each customer since the churn goes down when a customer buys multiple services. This is the main reason they are beginning to offer mobile service.

I think Malone has also mentioned that as a cable company, you don't want to be just a collection of dumb pipes because dumb pipes invite regulation. 
Title: Re: CHTR - Charter Communications
Post by: Liberty on July 26, 2018, 10:47:27 AM
Dispute about new builds in NY:

https://arstechnica.com/tech-policy/2018/07/ny-threatens-to-kick-charter-out-of-the-state-after-broadband-failures/
Title: Re: CHTR - Charter Communications
Post by: walkie518 on July 26, 2018, 12:22:14 PM
Dispute about new builds in NY:

https://arstechnica.com/tech-policy/2018/07/ny-threatens-to-kick-charter-out-of-the-state-after-broadband-failures/

Even if Spectrum lost its license in NYC, how would that impact its customers?  Does internet go down a day? 

I've heard this story before...Spectrum holds all of the cards here.  Should internet go down where there are only a couple providers, in a city of millions, I don't see how the city wins that fight. 
Title: Re: CHTR - Charter Communications
Post by: dwy000 on July 26, 2018, 12:58:52 PM
I doubt shut down is one of the options.  A lot of fines hoping to force them to clean up their act.  Worst case on license is that they make them sell the region to another operator not shut it down.
Title: Re: CHTR - Charter Communications
Post by: vince on July 27, 2018, 09:30:57 AM
Comcast, on the call really highlighted the fact that margins are rising as broadband sales increase and video decreases.  In addition, capex intensity is declining.  Combined with less cash taxes, fcf is rising very very nicely and it looks like there is continued room for improvement.   I assume Charter's ebitda margins will eventually be very comparable and if you apply these percentages to Charter's revenue, you get very nice numbers indeed relative to recent market prices.  It is also reasonable that Charters video performance will be better but nice to see that financial performance at Comcast is very good even with video losses.  So, in my mind, the last unknown that could derail this is 5g.  And even then it probably wouldnt be a complete disaster at these prices but who knows
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on July 27, 2018, 09:37:31 AM
Comcast, on the call really highlighted the fact that margins are rising as broadband sales increase and video decreases.  In addition, capex intensity is declining.  Combined with less cash taxes, fcf is rising very very nicely and it looks like there is continued room for improvement.   I assume Charter's ebitda margins will eventually be very comparable and if you apply these percentages to Charter's revenue, you get very nice numbers indeed relative to recent market prices.  It is also reasonable that Charters video performance will be better but nice to see that financial performance at Comcast is very good even with video losses.  So, in my mind, the last unknown that could derail this is 5g.  And even then it probably wouldnt be a complete disaster at these prices but who knows

I felt CMCSA results were very good and highlighting the fact that if the broadband business is healthy, the video subscriber losses don’t matter much. I feel that CMCSA is very undervalued here, given the strength in execution and how well they operate their assets. I do have a significant position in CMCSA stock ( way larger than CHTR) so I am talking my book here.
Title: Re: CHTR - Charter Communications
Post by: HalfMeasure on July 27, 2018, 09:52:31 AM
Comcast, on the call really highlighted the fact that margins are rising as broadband sales increase and video decreases.  In addition, capex intensity is declining.  Combined with less cash taxes, fcf is rising very very nicely and it looks like there is continued room for improvement.   I assume Charter's ebitda margins will eventually be very comparable and if you apply these percentages to Charter's revenue, you get very nice numbers indeed relative to recent market prices.  It is also reasonable that Charters video performance will be better but nice to see that financial performance at Comcast is very good even with video losses.  So, in my mind, the last unknown that could derail this is 5g.  And even then it probably wouldnt be a complete disaster at these prices but who knows

I felt CMCSA results were very good and highlighting the fact that if the broadband business is healthy, the video subscriber losses don’t matter much. I feel that CMCSA is very undervalued here, given the strength in execution and how well they operate their assets. I do have a significant position in CMCSA stock ( way larger than CHTR) so I am talking my book here.

How do you feel about the price being paid on the Sky offer and the potential for CMCSA to go after another content acquisition after giving up on Fox?
Title: Re: CHTR - Charter Communications
Post by: vince on July 27, 2018, 10:55:12 AM
Dont like the price for sky relative to the returns on buyback.  Sky may prove to be a better use of capital way further down the road and Im sure they have strategic thoughts that I am not privy to that may  make it a very good investment.  It just seems that their stock at 12 times free cash flow growing at 5-8 percent is the safest and surest bet.  Then again they are willing to leverage up for acquisitions but not for buybacks and cheap leverage juices their returns.  Sky is a great asset, just too expensive.  Probably wont find something as good as fox but again the price makes it difficult to see a good return.  However, strategically it may give them a better platform to compete and give the business a longer life.  From that angle, and with looking back from 10 years out, it may be that overpaying for fox and/or sky was not only advisable, but maybe even critical.  I would take the easy route.....borrow 50 billion at 5 % and buy ur own stock at a much better and growing yield.  Would love anyone elses thoughts
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on July 27, 2018, 11:16:28 AM
Quote
I would take the easy route.....borrow 50 billion at 5 % and buy ur own stock at a much better and growing yield.  Would love anyone elses thoughts

+1

I am surprised Comcast is not more interested in Liberty Global than Sky. Perhaps they like the content assets more than broadband in Europe?
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on July 27, 2018, 11:17:19 AM
https://www.cnbc.com/2018/07/27/new-york-votes-to-revoke-approval-of-charters-time-warner-cable-acqui.html?__source=yahoo%7Cfinance%7Cheadline%7Cstory%7C&par=yahoo&yptr=yahoo
Title: Re: CHTR - Charter Communications
Post by: vince on July 27, 2018, 11:32:35 AM
Quote
I would take the easy route.....borrow 50 billion at 5 % and buy ur own stock at a much better and growing yield.  Would love anyone elses thoughts

+1

I am surprised Comcast is not more interested in Liberty Global than Sky. Perhaps they like the content assets more than broadband in Europe?
Yes it looks like they want content assets, worldwide.  They have done a great job with NBC and gives them some nice diversification.  They also mentioned on the call that they want to be in a position to do well regardless of where these businesses shift rather than betting too much on one thing. 
Title: Re: CHTR - Charter Communications
Post by: vince on July 27, 2018, 11:37:51 AM
One thing is certain....the prices these assets are being acquired (pmv) are way higher than stock quotes.  Even Lbtya sale of German unit at 11-12 times is crazy compared to market prices.  Either these prices are going to turn out to be very expensive or I'm gonna make alot of money.
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on July 27, 2018, 11:51:14 AM
Craig Moffett on Comcast:

https://www.investopedia.com/news/comcast-should-buy-charter-moffettnathanson/?partner=YahooSA&yptr=yahoo

“Comcast’s bid for Sky at 14x Ebitda is impossible to justify versus the always-available alternative of buying back stock at what is now less than 7x EBITDA…a multiple that to us looks too low.”
Title: Re: CHTR - Charter Communications
Post by: vince on July 27, 2018, 12:53:09 PM
Craig Moffett on Comcast:

https://www.investopedia.com/news/comcast-should-buy-charter-moffettnathanson/?partner=YahooSA&yptr=yahoo

“Comcast’s bid for Sky at 14x Ebitda is impossible to justify versus the always-available alternative of buying back stock at what is now less than 7x EBITDA…a multiple that to us looks too low.”
I absolutely agree with him but this guy changes his mind every month.  For someone that focuses exclusively on Media and Cable, he doesnt impress
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on July 27, 2018, 01:58:38 PM
Quote
I absolutely agree with him but this guy changes his mind every month.  For someone that focuses exclusively on Media and Cable, he doesnt impress

Agreed. I recall Moffett was quite skeptical of Cable One's thesis that video has no margin for a long time until they were proven right. But he is right I think about Sky. I also think Jonathan Chaplin is a better media/cable analyst.
Title: Re: CHTR - Charter Communications
Post by: vince on July 27, 2018, 05:04:36 PM
Quote
I absolutely agree with him but this guy changes his mind every month.  For someone that focuses exclusively on Media and Cable, he doesnt impress

Agreed. I recall Moffett was quite skeptical of Cable One's thesis that video has no margin for a long time until they were proven right. But he is right I think about Sky. I also think Jonathan Chaplin is a better media/cable analyst.
only 6 months ago i think he was negative about comcast and charter.  I guess he was proven right cause their prices have fallen but i remember the narrative and it was amateurish and/or short sighted.  maybe he gets paid more to flop around.  Thanks for the other name
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on July 27, 2018, 07:51:25 PM
Quote
I absolutely agree with him but this guy changes his mind every month.  For someone that focuses exclusively on Media and Cable, he doesnt impress

Agreed. I recall Moffett was quite skeptical of Cable One's thesis that video has no margin for a long time until they were proven right. But he is right I think about Sky. I also think Jonathan Chaplin is a better media/cable analyst.

Nice interview with Chaplin re: Comcast, Disney, Fox, etc.

https://youtu.be/NOgDETolXlU
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on July 28, 2018, 12:41:42 AM
In my opinion, content is not a good business. It's flaky, subject to fad, you don't know who the winner or loser is..some specialty content may have some future , eg Olympics, F1, discovery. But I rather be in distribution. You at least know the boundaries of your risks. I think charter strategy is wise. I don't think Comcast buying up content and mixing it up with distribution will be a wise choice. Debt makes everything look brilliant until it's not.
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on July 28, 2018, 06:03:17 AM
On another note,

https://www.bloomberg.com/news/articles/2018-07-20/mets-stakes-owned-by-comcast-charter-said-to-hit-the-market
Title: Re: CHTR - Charter Communications
Post by: Deepdive on July 28, 2018, 08:16:03 AM
Doesn't seem like this will move the needle for CHTR given that the whole Mets is worth $2.1bn. What's CHTR's ownership stake?
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on July 28, 2018, 06:36:21 PM
Doesn't seem like this will move the needle for CHTR given that the whole Mets is worth $2.1bn. What's CHTR's ownership stake?

"With the Mets now worth $2.1 billion, according to Forbes, the 4 percent stakes would theoretically be worth $80 million apiece."

Pocket change.

Still an interesting story.

https://nypost.com/2018/07/20/minority-owners-said-ready-to-sell-10-percent-stake-in-ny-mets/
Title: Re: CHTR - Charter Communications
Post by: Liberty on July 31, 2018, 04:30:41 AM
CHTR Q2:

http://ir.charter.com/phoenix.zhtml?c=112298&p=irol-newsArticle&ID=2360886

Quote
Key highlights:

As of June 30, 2018, Charter had 27.6 million total customer relationships and 52.9 million total PSUs.

Second quarter total residential and SMB customer relationships increased 196,000, compared to 213,000 during the second quarter of 2017. Over the twelve months ended June 30, 2018, total residential and SMB customer relationships grew by 3.3%.

In the second quarter, total residential and SMB video, Internet and voice customers increased by 202,000, as compared to 246,000 during the second quarter of 2017.

Second quarter revenues of $10.9 billion grew 4.8%, as compared to the prior year period, driven by residential revenue growth of 4.6%, commercial revenue growth of 4.4%, and advertising revenue growth of 12.0%.

Second quarter Adjusted EBITDA1 of $4.1 billion grew 5.3% year-over-year, and 6.2% when excluding second quarter mobile costs.
Net income attributable to Charter shareholders totaled $273 million in the second quarter, compared to $139 million during the same period last year.

Second quarter capital expenditures totaled $2.4 billion compared to $2.1 billion during the second quarter of 2017, primarily driven by in-year timing differences and Charter's all-digital and Internet speed increase initiatives. Second quarter capital expenditures included $88 million of all-digital costs and $53 million of mobile launch costs.

During the second quarter, Charter purchased approximately 6.4 million shares of Charter Class A common stock and Charter Communications Holdings, LLC ("Charter Holdings") common units for approximately $1.9 billion.
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on July 31, 2018, 04:49:58 AM
CHTR Q2:

http://ir.charter.com/phoenix.zhtml?c=112298&p=irol-newsArticle&ID=2360886

Quote
Key highlights:

As of June 30, 2018, Charter had 27.6 million total customer relationships and 52.9 million total PSUs.

Second quarter total residential and SMB customer relationships increased 196,000, compared to 213,000 during the second quarter of 2017. Over the twelve months ended June 30, 2018, total residential and SMB customer relationships grew by 3.3%.

In the second quarter, total residential and SMB video, Internet and voice customers increased by 202,000, as compared to 246,000 during the second quarter of 2017.

Second quarter revenues of $10.9 billion grew 4.8%, as compared to the prior year period, driven by residential revenue growth of 4.6%, commercial revenue growth of 4.4%, and advertising revenue growth of 12.0%.

Second quarter Adjusted EBITDA1 of $4.1 billion grew 5.3% year-over-year, and 6.2% when excluding second quarter mobile costs.
Net income attributable to Charter shareholders totaled $273 million in the second quarter, compared to $139 million during the same period last year.

Second quarter capital expenditures totaled $2.4 billion compared to $2.1 billion during the second quarter of 2017, primarily driven by in-year timing differences and Charter's all-digital and Internet speed increase initiatives. Second quarter capital expenditures included $88 million of all-digital costs and $53 million of mobile launch costs.

During the second quarter, Charter purchased approximately 6.4 million shares of Charter Class A common stock and Charter Communications Holdings, LLC ("Charter Holdings") common units for approximately $1.9 billion.

yay
Title: Re: CHTR - Charter Communications
Post by: gokou3 on July 31, 2018, 10:02:15 AM
CHTR Q2:

http://ir.charter.com/phoenix.zhtml?c=112298&p=irol-newsArticle&ID=2360886

Quote
Key highlights:

As of June 30, 2018, Charter had 27.6 million total customer relationships and 52.9 million total PSUs.

Second quarter total residential and SMB customer relationships increased 196,000, compared to 213,000 during the second quarter of 2017. Over the twelve months ended June 30, 2018, total residential and SMB customer relationships grew by 3.3%.

In the second quarter, total residential and SMB video, Internet and voice customers increased by 202,000, as compared to 246,000 during the second quarter of 2017.

Second quarter revenues of $10.9 billion grew 4.8%, as compared to the prior year period, driven by residential revenue growth of 4.6%, commercial revenue growth of 4.4%, and advertising revenue growth of 12.0%.

Second quarter Adjusted EBITDA1 of $4.1 billion grew 5.3% year-over-year, and 6.2% when excluding second quarter mobile costs.
Net income attributable to Charter shareholders totaled $273 million in the second quarter, compared to $139 million during the same period last year.

Second quarter capital expenditures totaled $2.4 billion compared to $2.1 billion during the second quarter of 2017, primarily driven by in-year timing differences and Charter's all-digital and Internet speed increase initiatives. Second quarter capital expenditures included $88 million of all-digital costs and $53 million of mobile launch costs.

During the second quarter, Charter purchased approximately 6.4 million shares of Charter Class A common stock and Charter Communications Holdings, LLC ("Charter Holdings") common units for approximately $1.9 billion.

The $296.9 average buyback price was rather high relative to the price action during Q2, and it indicates that the company had been buying throughout April which is typically a blackout period for pending Q1 earning release.
Title: Re: CHTR - Charter Communications
Post by: Liberty on July 31, 2018, 10:07:49 AM
The $296.9 average buyback price was rather high relative to the price action during Q2, and it indicates that the company had been buying throughout April which is typically a blackout period for pending Q1 earning release.

Your number might look high because of rounding. The actual average price that they gave is $290.11:

(https://pbs.twimg.com/media/DjbjvlbUcAIaDmX.jpg)

https://twitter.com/LibertyRPF/status/1024256380805570561
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on July 31, 2018, 10:33:09 AM
One thing to note is that CHTR bumps against it self imposed leverage limit if 4.5x EBITDA), actual vale is 4.47). So, I don’t think we see a lot of buybacks this ongoing quarter.
Title: Re: CHTR - Charter Communications
Post by: HalfMeasure on July 31, 2018, 11:07:37 AM
One thing to note is that CHTR bumps against it self imposed leverage limit if 4.5x EBITDA), actual vale is 4.47). So, I don’t think we see a lot of buybacks this ongoing quarter.

They were at 4.46x at the end of Q1, meaning they didn't materially increase leverage in Q2 yet bought back the number of shares that they did.
Title: Re: CHTR - Charter Communications
Post by: vince on July 31, 2018, 02:15:39 PM
One thing to note is that CHTR bumps against it self imposed leverage limit if 4.5x EBITDA), actual vale is 4.47). So, I don’t think we see a lot of buybacks this ongoing quarter.

They were at 4.46x at the end of Q1, meaning they didn't materially increase leverage in Q2 yet bought back the number of shares that they did.

Incremental increases in ebitda and newly minted free cash flow allow for meaningful increases in buybacks
Title: Re: CHTR - Charter Communications
Post by: Liberty on August 01, 2018, 07:59:49 AM
Writeup on CHTR after Q2:

http://www.yetanothervalueblog.com/2018/08/some-updated-thoughts-on-charter-post_1.html
Title: Re: CHTR - Charter Communications
Post by: HalfMeasure on August 01, 2018, 09:45:37 AM
One thing to note is that CHTR bumps against it self imposed leverage limit if 4.5x EBITDA), actual vale is 4.47). So, I don’t think we see a lot of buybacks this ongoing quarter.

They were at 4.46x at the end of Q1, meaning they didn't materially increase leverage in Q2 yet bought back the number of shares that they did.

Incremental increases in ebitda and newly minted free cash flow allow for meaningful increases in buybacks

Ding ding ding
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on August 01, 2018, 10:23:55 AM
Comments from Rutledge about Verizon fixed wireless 5G build on the conf. call yesterday:

With regard to 5G, I look at what Verizon has announced as a kind of a conventional overbuild. Small cells require, essentially, a fiber optic cable system to supply them. So there's a lot of capital intensity with that kind of build. Their projection was to build 30 million passings in the United States over 10 years, which, if you believe that's going to happen, then 40% of those approximately would be in our footprint, if they deploy them with any kind of random distribution. And so you could do the math of what kind of penetrations you might achieve with a met-too product delivered wirelessly over a 10-year period in 12 million passings.

So I think it's a difficult process to use 5G as essentially as a wireless drop and it requires having all of the physical assets underneath that. So it's very capital-intensive and maybe as much or more capital-intensive than the conventional fiber build, like Google attempted.
Title: Re: CHTR - Charter Communications
Post by: walkie518 on August 07, 2018, 11:15:00 AM
Quote
Advance/Newhouse Notifies Charter of Intent to Establish Credit Facility Collateralized by Stake in Charter Communications Holdings, LLC

STAMFORD, Conn., Aug. 6, 2018 /PRNewswire/ -- Charter Communications, Inc. (CHTR) (along with its subsidiaries, "Charter") today announced that Advance/Newhouse ("A/N") has notified Charter that A/N intends to establish a credit facility collateralized by a portion of A/N's Common Units in Charter Communications Holdings, LLC. A/N has also indicated to Charter that A/N remains committed to being a long-term shareholder of Charter and currently has no intent to sell any units/shares other than through its continued pro-rata participation in Charter's buyback program.

this appears to be a fairly massive vote of confidence...curious what they intend to do with the proceeds? 
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on August 07, 2018, 12:19:30 PM
Quote
this appears to be a fairly massive vote of confidence...curious what they intend to do with the proceeds?

Why do you think it is a massive vote of confidence? It seems that A/N is just taking a margin loan by pledging a portion of their Charter common units.
Title: Re: CHTR - Charter Communications
Post by: walkie518 on August 07, 2018, 12:31:31 PM
Quote
this appears to be a fairly massive vote of confidence...curious what they intend to do with the proceeds?

Why do you think it is a massive vote of confidence? It seems that A/N is just taking a margin loan by pledging a portion of their Charter common units.

Charter is at the early stages of what Liberty Global has nearly entirely accomplished.  Malone et al likely have an idea of what the next few quarters will look like. 

There are certainly a lot of bad investors out there, but someone like Malone doesn't margin a sinking ship.
Title: Re: CHTR - Charter Communications
Post by: Liberty on August 07, 2018, 12:37:41 PM
Quote
this appears to be a fairly massive vote of confidence...curious what they intend to do with the proceeds?

Why do you think it is a massive vote of confidence? It seems that A/N is just taking a margin loan by pledging a portion of their Charter common units.

Charter is at the early stages of what Liberty Global has nearly entirely accomplished.  Malone et al likely have an idea of what the next few quarters will look like. 

There are certainly a lot of bad investors out there, but someone like Malone doesn't margin a sinking ship.

A/N isn't John Malone, though:

https://en.wikipedia.org/wiki/Advance_Publications
Title: Re: CHTR - Charter Communications
Post by: walkie518 on August 07, 2018, 01:14:20 PM
Quote
this appears to be a fairly massive vote of confidence...curious what they intend to do with the proceeds?

Why do you think it is a massive vote of confidence? It seems that A/N is just taking a margin loan by pledging a portion of their Charter common units.

Charter is at the early stages of what Liberty Global has nearly entirely accomplished.  Malone et al likely have an idea of what the next few quarters will look like. 

There are certainly a lot of bad investors out there, but someone like Malone doesn't margin a sinking ship.

A/N isn't John Malone, though:

https://en.wikipedia.org/wiki/Advance_Publications

I was under the impression they are working together?
Title: Re: CHTR - Charter Communications
Post by: Liberty on August 07, 2018, 01:16:35 PM

I was under the impression they are working together?

Legacy Charter bought Time Warner Cable and the cable systems of Advance/Newhouse at the same time, and A/N retained some ownership in the New Charter (basically, they took a bunch of stock in NewCo as payment). They've been maintaining their % by selling back into the company's buybacks.
Title: Re: CHTR - Charter Communications
Post by: walkie518 on August 07, 2018, 02:21:15 PM

I was under the impression they are working together?

Legacy Charter bought Time Warner Cable and the cable systems of Advance/Newhouse at the same time, and A/N retained some ownership in the New Charter (basically, they took a bunch of stock in NewCo as payment). They've been maintaining their % by selling back into the company's buybacks.

if they are borrowing against their stake then it's unlikely that they continue on that path? 
Title: Re: CHTR - Charter Communications
Post by: KJP on August 07, 2018, 02:34:27 PM

I was under the impression they are working together?

Legacy Charter bought Time Warner Cable and the cable systems of Advance/Newhouse at the same time, and A/N retained some ownership in the New Charter (basically, they took a bunch of stock in NewCo as payment). They've been maintaining their % by selling back into the company's buybacks.

if they are borrowing against their stake then it's unlikely that they continue on that path?

It appears A/N will continue selling into the buyback.  That's why the release refers to only a "portion" of A/N's units being pledged as collateral.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on August 14, 2018, 10:03:35 AM
A bit confused ,

"Google, Dish, Charter, and others all plan to have 5G networks launching in 2019 and 2020. This is likely just the start of what may become a true price war as T-Mobile has announced plans to bundle home and wireless internet into one cheap low wireless plan."

Is charter have anything to do with 5g??

https://www.cordcuttersnews.com/5g-internet-is-cheaper-than-you-thought-will-push-cord-cutting-forward/

I am getting a bit worried that this 5g revolution is happening faster than predicted. Furthermore everytime I see 'justification' arguments why it will cost too much , won't work, or cable is Intermediary I feel even more reason to run. But I'm truly not sure about the political and technological force. Is this destined for the too hard pile?

Title: Re: CHTR - Charter Communications
Post by: Liberty on August 14, 2018, 10:48:39 AM
Charter has been doing some 5G tests, and they have a MVNO contract with Verizon. They also have lots of public wifi points that can serve to offload some of those "mobile" bits.
Title: Re: CHTR - Charter Communications
Post by: UK on August 16, 2018, 04:26:09 AM
https://www.cnbc.com/2018/08/15/cnbc-exclusive-cnbc-transcript-verizon-ceo-hans-vestberg-speaks-with.html
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on August 16, 2018, 06:55:32 AM
https://www.cnbc.com/2018/08/15/cnbc-exclusive-cnbc-transcript-verizon-ceo-hans-vestberg-speaks-with.html

ALL CAPS advertisement for 5G, we'll see.
Title: Re: CHTR - Charter Communications
Post by: LongTermView on August 16, 2018, 02:50:13 PM
https://www.cnbc.com/2018/08/15/cnbc-exclusive-cnbc-transcript-verizon-ceo-hans-vestberg-speaks-with.html

This sounds good for Charter:
Quote
Sorkin: So here's the fundamental question of 5G and Joe and Becky and I were talking about this during a commercial break in the 6:00 hour, which is: do you believe that 5G is fundamentally long-term going to upend what might be described as the traditional cable business? Now I'm thinking of the parent of this network Comcast, Charter, effectively everybody. Does the technology of being able to effectively cut the wire upend the business -- or and I've heard Brian Roberts say this before, you will always need the wire or at least wires under the ground. That ultimately 5G or any wireless technology are still based on getting as close to the home as possible?

Vestberg: You're still going to have fiber coming close to the technology that we're sending out the radio.

The transcript butchered the densification part. Instead of saying "densification is another" it states "identification is not there."
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on August 16, 2018, 05:32:04 PM
https://www.cnbc.com/2018/08/15/cnbc-exclusive-cnbc-transcript-verizon-ceo-hans-vestberg-speaks-with.html

This sounds good for Charter:
Quote
Sorkin: So here's the fundamental question of 5G and Joe and Becky and I were talking about this during a commercial break in the 6:00 hour, which is: do you believe that 5G is fundamentally long-term going to upend what might be described as the traditional cable business? Now I'm thinking of the parent of this network Comcast, Charter, effectively everybody. Does the technology of being able to effectively cut the wire upend the business -- or and I've heard Brian Roberts say this before, you will always need the wire or at least wires under the ground. That ultimately 5G or any wireless technology are still based on getting as close to the home as possible?

Vestberg: You're still going to have fiber coming close to the technology that we're sending out the radio.

Nice.

I think these guys are just hyping 5G to attract subs & annoy broadband co's by keeping their equity low.

Doesn't matter as long as the toll booth keeps working.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on August 17, 2018, 01:46:37 AM
https://www.cnbc.com/2018/08/15/how-5g-will-change-home-internet-and-tv.html

As an aside , the world seems bonkers. In north America I will pay say 30 to 50 USd for unlimited mobile , in UK perhaps 25 to 30, in Ukraine ...6 for unlimited 4g LTE in Kyiv. 6! Now you tell me what is going on..is someone subsidizing everything or are prices just artificial everywhere else especially USA Canada ? I mean how can one justify the same service for such a lower price ? Now this may seem irrelevant but I think it has a huge impact on companies like chtr , lbtyk as I'm not sure it won't all end up being next to free soon .
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on August 17, 2018, 04:10:06 AM
https://www.cnbc.com/2018/08/15/how-5g-will-change-home-internet-and-tv.html

As an aside , the world seems bonkers. In north America I will pay say 30 to 50 USd for unlimited mobile , in UK perhaps 25 to 30, in Ukraine ...6 for unlimited 4g LTE in Kyiv. 6! Now you tell me what is going on..is someone subsidizing everything or are prices just artificial everywhere else especially USA Canada ? I mean how can one justify the same service for such a lower price ? Now this may seem irrelevant but I think it has a huge impact on companies like chtr , lbtyk as I'm not sure it won't all end up being next to free soon .

You can get the same prices (U.K.) in the US, if you go prepaid. Cellphone, Internet, cable TV have been expensive in the US forever, although prices in Europe are going up too. That’s the reason why CHTR and CMCSA are a much better business than LBTYA.

As for TV, part of the reason was that TV wasn’t commercial and run like a public utility, that was paid by a viewers tax (at least in Germany). Private TV stations came up in the 80’s and had to finance themselves solely with ads. I think this kept prices low, but now we have premium channels (sports movies) that are subscription based.
Title: Re: CHTR - Charter Communications
Post by: dwy000 on August 17, 2018, 08:30:20 AM
https://www.cnbc.com/2018/08/15/how-5g-will-change-home-internet-and-tv.html

As an aside , the world seems bonkers. In north America I will pay say 30 to 50 USd for unlimited mobile , in UK perhaps 25 to 30, in Ukraine ...6 for unlimited 4g LTE in Kyiv. 6! Now you tell me what is going on..is someone subsidizing everything or are prices just artificial everywhere else especially USA Canada ? I mean how can one justify the same service for such a lower price ? Now this may seem irrelevant but I think it has a huge impact on companies like chtr , lbtyk as I'm not sure it won't all end up being next to free soon .

Maintaining a nationwide network in the US is a lot more expensive than doing it in the Ukraine.  And the US companies had to spend 10's of $Billions to acquire the spectrum rights on top of that.  I don't know the situation in Ukraine specifically but I would guess the cell phone companies didn't have to spend nearly as much.

Just look at Sprint.  Even with ARPU's and pricing way higher than Europe or the Ukraine, they are barely cash flow breakeven and certainly not earning a decent return on capital deployed.

Check out the price of cell service in Canada.  And that's with 3 competitive providers.  The cost of a large geographic network is enormous and not really comparable to the smaller and denser European countries.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on August 17, 2018, 12:24:11 PM
I'm of the view if I can get 4g lte for 5 bucks something is very very wrong in the west.

Meanwhile , https://money.cnn.com/2018/08/15/technology/verizon-5g-service-offer/index.html
Title: Re: CHTR - Charter Communications
Post by: jmp8822 on August 17, 2018, 01:44:27 PM
I'm of the view if I can get 4g lte for 5 bucks something is very very wrong in the west.

Meanwhile , https://money.cnn.com/2018/08/15/technology/verizon-5g-service-offer/index.html

It seems the closer 5G gets the more undeniable it becomes that this could forever upend the cable/broadband business and internet stocks.  Seriously, Verizon is ramping up 5G in four cities this year for the specific purpose of eating broadband companies' lunch. The fact that it might work is intriguing to say the least. This has moved passed the "what if Verizon is willing to use 5G to acquire broadband customers?" hypothetical.  That is coming this year.  I wonder what the price/terms of the consumer offering will be - they have yet to announce those details.
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on August 17, 2018, 03:00:12 PM
The price isn’t $5, it’s $50 with free TV valued at $45. It’s very likely a promotion. Verizon has a broadband business (FIOS) and they are selling for way more than $5 - I know, because I am their customers.

VZW can’t keep the price at $50 either be sure they need to pay the streaming company (GOOGL), so the $50 would be losing money for them. VZW is not know to give service away for free.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on August 20, 2018, 03:42:10 AM
https://www.zdnet.com/article/verizon-transmits-5g-to-moving-vehicle/

What do people think of this strategy.
Suppose you have a stock you think could be good value or it might be a run off or declining problem over time , you *want* to be long but you see some risks. ..
Could you buy some long range put options and give up a little profit as insurance?
Title: Re: CHTR - Charter Communications
Post by: chrispy on August 21, 2018, 09:28:00 AM
5G is my biggest concern as well but it may very well end up making the cable companies even more of a necessity.

All of these press releases from Verizon are starting to sound like hype and over compensating... The ZDNet article states how impressive things are "By taking these tests out of the lab and into the field" despite that the test was done at "Nokia's Murray Hill, New Jersey, campus", aka a lab
Title: Re: CHTR - Charter Communications
Post by: Liberty on August 21, 2018, 11:12:05 AM
Verizon recently tried to buy CHTR for a higher price than its trading now. Not sure if that's what you do if you have a high-ROIC way to basically overbuild the country (which is kind of what 5G requires, with lots of small cells and lots of backhaul fiber required).
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on August 21, 2018, 11:31:01 AM
I think the best view is this : except for video , so far high speed internet is not really needed for most applications even iot.

https://www.google.com.ua/amp/s/www.forbes.com/sites/washingtonbytes/2017/09/22/the-dawn-of-5g-will-wireless-kill-the-broadband-star/amp/
Title: Re: CHTR - Charter Communications
Post by: maybe4less on August 21, 2018, 12:33:35 PM
Verizon recently tried to buy CHTR for a higher price than its trading now. Not sure if that's what you do if you have a high-ROIC way to basically overbuild the country (which is kind of what 5G requires, with lots of small cells and lots of backhaul fiber required).

Didn't Verizon already try to overbuild the country with FIOS? I believed they largely abandoned their build-out plans with that program because it wasn't working out for them financially in most markets.
Title: Re: CHTR - Charter Communications
Post by: jmp8822 on August 21, 2018, 12:41:46 PM
Verizon recently tried to buy CHTR for a higher price than its trading now. Not sure if that's what you do if you have a high-ROIC way to basically overbuild the country (which is kind of what 5G requires, with lots of small cells and lots of backhaul fiber required).

Didn't Verizon already try to overbuild the country with FIOS? I believed they largely abandoned their build-out plans with that program because it wasn't working out for them financially in most markets.

Now that Verizon has built 5G in select cities to start offering in-home 5G services this year, I would guess they determined it would be cheaper to build 5G because of the smaller capex requirement compared to direct-to-home wires.  Google Fiber stopped building fiber in my area for a similar reason I believe - they had 5G plans which requires much less digging and labor to physically install in homes. Now the customer service will be much more hands off, i.e. no cable guy in your house required for 99+% of subscribers.
Title: Re: CHTR - Charter Communications
Post by: walkie518 on September 04, 2018, 10:10:50 AM
https://www.oakmark.com/Oakmark-files/Media/Documents/TWST_StayingDisciplinedtoaBottom-Up_082718.pdf?dtr

pg 2
Title: Re: CHTR - Charter Communications
Post by: Liberty on September 07, 2018, 01:20:29 PM
https://www.multichannel.com/news/charters-winfrey-5g-not-comparable-to-docsis-3-1

Quote
“I don’t see anything about 5G that ever makes it comparable to DOCSIS 3.1 or DOCSIS 3.1 Full Duplex, or any capability we have through fixed line service,” [CHTR CFO] Winfrey said [...]

In order for 5G to work, he added, "you have to be relatively close to the home with fiber, and you need to have power. And to replicate that without cable infrastructure, you really need to be a cable over-builder…I don’t see any rationale for someone to do that.”
Title: Re: CHTR - Charter Communications
Post by: jmp8822 on September 07, 2018, 05:36:52 PM
Quote
“I don’t see anything about 5G that ever makes it comparable to DOCSIS 3.1 or DOCSIS 3.1 Full Duplex, or any capability we have through fixed line service,” [CHTR CFO] Winfrey said [...]

In order for 5G to work, he added, "you have to be relatively close to the home with fiber, and you need to have power. And to replicate that without cable infrastructure, you really need to be a cable over-builder…I don’t see any rationale for someone to do that.”

All these quotes I see from Charter and the cable companies act like this isn't really happening.  The cell companies are building 5G with the intention of eating the cable companies' lunch.  The whole 'too expensive' thing isn't a good counter argument because the cell companies are building it and will finish - whether the build out and sales are ultimately profitable don't matter right now. The cell companies are competing between each other for early-mover dominance in 5G - cable internet could be the first casualty.  If the monthly cost is lower/similar to current at-home cable internet prices, I think everyone would switch to the cell companies' 5G offering. I know I would switch - who wants to meet a cable guy at their house between 10am-12pm on Wednesday?

T-Mobile is one of the big four jumping into 5G headfirst. T-Mobile Chief Operating Officer Mike Sievert: On 5G, “We intend to plunge into broadband; not just mobile connections like today but into in-home broadband because this network has the depth and breadth of 5G that’s simply unprecedented in the market. We see the opportunity to offer broadband in huge swaths of the market, which will bring competition benefits to customers, even those who don’t choose us.” Sievert projected approximately 10 million broadband customers “over the first few years.”
Title: Re: CHTR - Charter Communications
Post by: Broeb22 on September 08, 2018, 02:55:48 AM
These being the words coming from a company that didn’t have enough capital to invest in 5G until their announced merger with fellow laggard Sprint. Now suddenly they are going to eat the cable guys’ lunch. Sounds like something they would tell the government and everyone else to get a merger approved.

Additionally, from a competitive perspective, why would Verizon and Sprint allegedly offer to buy Charter for over $100BN if they though they could just come in and make the cable guys dinosaurs? Is paying $100BN for Charter really cheaper than building out a 5G network that makes cable infrastructure redundant?

I don’t have a dog in this fight at the moment, but have been following somewhat closely. With Charter offering wireless data plans based on an MVNO agreement (with Verizon) it seems like this is very much up in the air for the time being.
Title: Re: CHTR - Charter Communications
Post by: JRM on September 08, 2018, 04:23:37 AM
Where exactly can I sign up for this 5G fixed broadband service?  Meanwhile, Charter is rolling out Spectrum Wireless nation wide.  Who is going to eat who's lunch?
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on September 08, 2018, 05:01:01 AM
Where exactly can I sign up for this 5G fixed broadband service?  Meanwhile, Charter is rolling out Spectrum Wireless nation wide.  Who is going to eat who's lunch?

There is also the question if 5G will be unlimited (or quasi unlimited like your current home internet) or you just get a couple of GIGS for $50/ month. At least in the past, the wirelsss companies have not been in the business of giving away stuff for free.
Title: Re: CHTR - Charter Communications
Post by: scorpioncapital on September 09, 2018, 02:55:13 AM
Regarding the charter buyout , reality is it hasn't happened. I don't see this as an argument of value. Things change.

Regarding mvno, charter appears to becoming like an affiliate marketing firm. It is not clear that affiliate marketing with future 5050 revenue share on 5g and WiFi and cable won't be lucrative, but obviously they'll have less pricing power and why wouldn't the new customer or old one just go directly to Verizon ? If 5g users will want WiFi and occasional cable when connectivity is poor , then I see a place for an affiliate marketer hybrid with some core business remaining. But there could be growth headwinds.

It sounds as if 5g maybe over time be so good nobody will need the other two WiFi and cable hotspots. But the hybrid model means charter investors could get a good return while this runoff scenario occurs (if ever ). But I do worry that any shift to less use of WiFi and cable , despite the affiliate agreement means a static or declining asset. When will this occur ? If it occurs after say ten years, charter investors has taken out all their capital as fcf. Businesses with some disruption or competition are always hard to measure the forces of growth versus the forces of shrinkage. On the other hand, every investment has risks so probably no need to get ahead of ourselves yet. I see the market though already starting to digest the idea of 5g as another market entrant competing with cable.
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on September 09, 2018, 07:51:52 AM
Who's serious about 5G?
We'll know in November.

https://www.lightreading.com/mobile/5g/fcc-keys-procedures-for-5g-spectrum-auction-/d/d-id/745119

It'd be fun to see Charter & Comcast get in on the bidding.
(IDK if this is a possibility but a guy can dream, right?)
Title: Re: CHTR - Charter Communications
Post by: Broeb22 on September 09, 2018, 01:18:51 PM
I see the market though already starting to digest the idea of 5g as another market entrant competing with cable.

If the market is beginning to digest this threat and price it into assets, wouldn’t the market also price the good news of Verizon/AT&T/Sprint-T Mobile gaining share from cable into their stock prices? Where is the evidence of that?

Title: Re: CHTR - Charter Communications
Post by: jmp8822 on September 09, 2018, 09:18:49 PM
Where exactly can I sign up for this 5G fixed broadband service?  Meanwhile, Charter is rolling out Spectrum Wireless nation wide.  Who is going to eat who's lunch?

You can't sign up today, so that must mean it won't ever happen, right? Read much? Anything happening in the next 12 months I would consider to be meaningful news:

"Verizon execs have said they expect to launch four fixed 5G markets by the end of 2018. At least 50 residential markets are expected to follow in 2019."

Verizon alone expects to be in 50+ markets inside of 18 months, directly competing against traditional cable internet companies - that would be notable to a company like Charter that carries $60B+ in debt with cable TV already in decline. Who is going to buy any cable stock when the internet revenue numbers start going backwards? Generally owning a 'regular' company that becomes a 'runoff' stock isn't profitable between point A and point B.

https://www.lightreading.com/mobile/5g/indy-is-verizons-4th-fixed-5g-city/d/d-id/745402
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on September 10, 2018, 04:07:46 AM
Where exactly can I sign up for this 5G fixed broadband service?  Meanwhile, Charter is rolling out Spectrum Wireless nation wide.  Who is going to eat who's lunch?

You can't sign up today, so that must mean it won't ever happen, right? Read much? Anything happening in the next 12 months I would consider to be meaningful news:

"Verizon execs have said they expect to launch four fixed 5G markets by the end of 2018. At least 50 residential markets are expected to follow in 2019."

Verizon alone expects to be in 50+ markets inside of 18 months, directly competing against traditional cable internet companies - that would be notable to a company like Charter that carries $60B+ in debt with cable TV already in decline. Who is going to buy any cable stock when the internet revenue numbers start going backwards? Generally owning a 'regular' company that becomes a 'runoff' stock isn't profitable between point A and point B.

https://www.lightreading.com/mobile/5g/indy-is-verizons-4th-fixed-5g-city/d/d-id/745402

It’s a trend worth watching, but I recall the same was said about 4g, that it would be good enough so people would forgo broadband  internet. Again, the cable cos can add 5G too and then some people may forgo their wireless plans for an add on to broadband. My own opinion is that the US telecom market is clubby and prices will remain high.
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on September 10, 2018, 04:59:00 AM
“We’re wholesaling network capacity from a wireless carrier for the broad umbrella coverage of mobility service, but we want to put as much of our traffic onto our own WiFi infrastructure as possible,” Cowden said.

https://www.multichannel.com/news/small-cells-play-big-role-charter-s-mobile-future-418196

---

https://www.fiercewireless.com/tech/charter-to-expand-lte-small-cell-tests-to-new-york-city-los-angeles

---

Does anyone think that Charter will pop up in the 5G spectrum auction this November.
Can they afford to start building out their own small cell network?
Should I just shut up about this?
Title: Re: CHTR - Charter Communications
Post by: cameronfen on September 10, 2018, 05:04:13 AM
I see the market though already starting to digest the idea of 5g as another market entrant competing with cable.

If the market is beginning to digest this threat and price it into assets, wouldn’t the market also price the good news of Verizon/AT&T/Sprint-T Mobile gaining share from cable into their stock prices? Where is the evidence of that?

Well it likely will increase volatility (as broadband is also trying to get in mobile) so it could put downward pressure on telecoms as well. 
Title: Re: CHTR - Charter Communications
Post by: AdjustedEarnings on September 11, 2018, 02:35:15 PM
Tom Rutledge's 2016 equity award (which pays out big until 2022) has been much discussed in places where CHTR is a topic of conversation (that is to say, value investing meetings/blogs/forums and John Malone Groupie meetings/blogs/forums). But I had not seen it quantified, so I did a calculation. At the very maximum, it pays $582 million to Rutledge if a price of $564.04 is achieved on the CHTR equity, within the time limit of the award. Details/assumptions of the calculation are at the link below and have attempted to attach the graphic here (I'm new to this blog so I'm not sure whether and how this attachment will show):

http://adjustedearnings.blogspot.com/2018/09/tom-rutledges-chtr-infamous-equity.html

Please let me know with your questions and/or feedback. Thanks!

Disclosure: Long CHTR (through LBRDK).
Title: Re: CHTR - Charter Communications
Post by: undervalued on September 12, 2018, 04:34:41 PM
Verizon's $70 5G plan https://arstechnica.com/information-technology/2018/09/verizon-5g-home-internet-70month-300mbps-to-1gbps-speeds-no-data-caps/ (https://arstechnica.com/information-technology/2018/09/verizon-5g-home-internet-70month-300mbps-to-1gbps-speeds-no-data-caps/). For some reason I don't trust their unlimited data plan.

https://www.verizon.com/about/news/5g-here (https://www.verizon.com/about/news/5g-here)

5G Home is built on the world’s first and only 5G Ultra Wideband network
Verizon 5G Home is unique because it’s built on Verizon’s 5G Ultra Wideband network. 5G is only as good as the network it’s built on and Verizon’s 5G Ultra Wideband network is the only 5G network that combines:

Title: Re: CHTR - Charter Communications
Post by: Liberty on September 12, 2018, 04:59:04 PM
I see the market though already starting to digest the idea of 5g as another market entrant competing with cable.

If the market is beginning to digest this threat and price it into assets, wouldn’t the market also price the good news of Verizon/AT&T/Sprint-T Mobile gaining share from cable into their stock prices? Where is the evidence of that?

Well it likely will increase volatility (as broadband is also trying to get in mobile) so it could put downward pressure on telecoms as well.

If the telecoms are getting terrible ROIC on their plans to overbuild the whole country to compete with cable, pressure on their stocks might be the expected response.
Title: Re: CHTR - Charter Communications
Post by: jmp8822 on September 12, 2018, 05:53:27 PM
Verizon's $70 5G plan https://arstechnica.com/information-technology/2018/09/verizon-5g-home-internet-70month-300mbps-to-1gbps-speeds-no-data-caps/ (https://arstechnica.com/information-technology/2018/09/verizon-5g-home-internet-70month-300mbps-to-1gbps-speeds-no-data-caps/). For some reason I don't trust their unlimited data plan.

https://www.verizon.com/about/news/5g-here (https://www.verizon.com/about/news/5g-here)

5G Home is built on the world’s first and only 5G Ultra Wideband network
Verizon 5G Home is unique because it’s built on Verizon’s 5G Ultra Wideband network. 5G is only as good as the network it’s built on and Verizon’s 5G Ultra Wideband network is the only 5G network that combines:

  • End-to-end deep fiber resources throughout the network
  • A large deployment of small cells
  • Critical, and best-in-class spectrum holdings, particularly in the millimeter wave bands, the only spectrum with the bandwidth to realize the full 5G potential for capacity, throughput and latency

From the arstechnica article above:

"Early users of the service in those four cities will get it for free for the first three months. "After that introductory period, current Verizon Wireless customers with a qualifying smartphone plan will pay $50 per month for the service, while non-Verizon Wireless customers will pay $70 per month," Verizon said. "This monthly charge includes all taxes and fees, and does not require an annual contract. There are no additional hardware costs.""

After seeing the price of $50 per month for current Verizon customers, I did some random looking at Sacramento pricing on regular cable and internet and fiber offerings.  All were priced at a minimum of $60 for roughly similar speeds, up to $80 per month. So, all traditional cable companies presumably will need to lower their prices for new customers if they intend to compete with Verizon over time.  And if Verizon is $50/month for existing wireless customers as the first entrant, I wonder what Sprint/T-Mobile might be priced at?  It seems to me that this is a substantial risk to traditional cable internet - will be interesting to watch cable internet subscriber numbers.

Also, the other issue that cable companies could have - seamless 5G with a wireless phone (once they come out next year) could be near.  I.e. no signing in to wireless at a friends house - you might already have unlimited 5G in that given neighborhood.  Anytime something is cheaper/similar pricing and has other benefits, perhaps many might start moving to the new technology?
Title: Re: CHTR - Charter Communications
Post by: Liberty on September 13, 2018, 06:21:13 AM
Based on the ANH filing, it looks like CHTR bought back a little less than 1% of shares outstanding during the past month.

https://www.sec.gov/Archives/edgar/data/914545/000089924318024245/xslF345X03/doc4.xml
Title: Re: CHTR - Charter Communications
Post by: AdjustedEarnings on September 13, 2018, 04:47:37 PM
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
Title: Re: CHTR - Charter Communications
Post by: chrispy on September 14, 2018, 05:39:57 AM
It is the right thing to do.. but are they only doing it because of Verizon's messup out west?

https://www.wraltechwire.com/2018/09/12/spectrum-to-open-more-than-5000-wifi-hot-spots-to-all-wireless-users/
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on September 14, 2018, 08:22:33 AM
It is the right thing to do.. but are they only doing it because of Verizon's messup out west?

https://www.wraltechwire.com/2018/09/12/spectrum-to-open-more-than-5000-wifi-hot-spots-to-all-wireless-users/

Who cares, it's great PR.
Title: Re: CHTR - Charter Communications
Post by: dwy000 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.
Title: Re: CHTR - Charter Communications
Post by: Liberty 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
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on September 14, 2018, 08:17:33 PM
https://www.multichannel.com/news/charters-rutledge-we-have-a-better-platform-to-deploy-5g-than-cellular
Title: Re: CHTR - Charter Communications
Post by: cameronfen 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. 
Title: Re: CHTR - Charter Communications
Post by: dwy000 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).
Title: Re: CHTR - Charter Communications
Post by: vince 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.
Title: Re: CHTR - Charter Communications
Post by: bizaro86 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.
Title: Re: CHTR - Charter Communications
Post by: Spekulatius 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).
Title: Re: CHTR - Charter Communications
Post by: vince 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
Title: Re: CHTR - Charter Communications
Post by: cameronfen 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. 
Title: Re: CHTR - Charter Communications
Post by: vince on September 15, 2018, 06:20:47 PM
Cam, I dont know how much we actually need and what kind of bandwidth new applications will consume but you should take a look at what kind of speeds, amount of devices connected per home, and monthly household usage (in gigs) is happening.  Its growing exponentially with no signs of slowing and lots of executives close to the data believe that it has barely started.
Title: Re: CHTR - Charter Communications
Post by: cameronfen on September 15, 2018, 06:41:07 PM
Cam, I dont know how much we actually need and what kind of bandwidth new applications will consume but you should take a look at what kind of speeds, amount of devices connected per home, and monthly household usage (in gigs) is happening.  Its growing exponentially with no signs of slowing and lots of executives close to the data believe that it has barely started.

There is a difference between data usage and how much bandwidth you need.  Most of the new data you use, like IoT will have a limited effect on bandwidth consumption.  That is because they are continuously downloading/uploading small amounts of data, which causes the amount of data to be large, but will cause no discernable effect on speeds.  For example, you can with 1Gbps, if you are using it continuously at its max level, a household can download 324 terabytes of data a month.  That kind of data is enough to watch 462,000 hours a video a month (or 600+ hours of video every hour).  We won't get close to that much data usage for a long time, and no family hardly uses even a 100GB of data a month much less a terabyte.  This just gives you an idea of how much bandwidth every household actually has, but also my point is it doesn't really matter if you have IoT machines that continuously are uploading small amounts of data (you will never run out of data in that way), what really matters is how much data you use at your peak usage.  And at this point, we are running into diminishing returns of using more bandwidth per second as video quality is basically already as good as possible and there are limited other avenues to increase data per second (maybe AR or massive machine learning requiring video). 
Title: Re: CHTR - Charter Communications
Post by: vince on September 16, 2018, 01:01:10 PM
I am not necessarily disagreeing with you and will just put up a quote from Brian Roberts on 2nd qtr call that supports what I was pointing out.  "The increasing importance and value of broadband to our customers is clear. Our customers' median monthly data usage on our network now exceeds 150 gigabytes for the first time. Additionally, our xFi customers are connecting an average of 11 devices in the home over Wi-Fi daily".  This quote doesn't really prove anything but it does show that mgmt feels pressure to continue to improve the network.  Roberts in other parts of call and other cable Ceo's consistently stress how the consumer values and is demanding higher speeds and is willing to pay for it as well.  Cabo mgmt is doing market elasticity tests this year and the early results are remarkable.  Consumers want, need and are paying for higher speeds without negative effects on churn.  Chtr's mgmt claims that increasing the abilities of the network, from here, is a strong and durable advantage and that results up to now show very clear improvements in customer metrics whenever they take speeds up.  I guess my point is that customer behavior right now is not consistent with what you are printing.  I am not saying that your numbers are wrong and maybe demand will level off soon but every indication is that this is an amazing business and has a very long runway with incredible pricing power. 
Title: Re: CHTR - Charter Communications
Post by: Liberty on September 16, 2018, 04:54:20 PM
Bill Gates might not actually have said it, but the idea of "640K ought to be enough for anybody" repeats itself every few years.

It's a chicken and egg thing; once people have huge bandwidth/a new capability, new services tend to be created that use that bandwidth/capability and that couldn't have existed before.

I think there's currently a bunch of headroom in bandwidth for most people, but who knows where we'll be on that pendulum swing in a few years? And have people ever been rational about getting only what they need? How many people buy SUVs because "maybe someday I'll want to go off road or tow something" and they basically never do?
Title: Re: CHTR - Charter Communications
Post by: cameronfen on September 16, 2018, 05:34:49 PM
I guess I'll admit that I didn't expect the median data usage to be 150GB per household, but the argument regarding if you build it they will come is bunk.  We can download full length movies in a about a minute.  Video games with real world graphics and landmass the size of a small city can be downloaded in 30 mins.  If people will build bigger programs when we have bigger pipes why haven't they.  I remember when world of warcraft was like a 5Gb game when it first came out and it took like all night to download.  Now if a game takes all night to download it has to approach 500 GB.  Games just arent keeping pace with the biggest ones just under 100 GB. 

The idea that we just need extra bandwidth before someone innovates is a straw man imo.  We already have excess bandwidth and yet no one is building super VR systems which will tax all your bandwidth. 

My guess is cable cos are seeing people switch to faster internet because most people dont understand that faster speeds will effect them in marginal ways.  (I have no proof to back this up though).  Cable is basically a monopoly and so they have no incentive to educate people and just offer multiple tiers for the suckers who like having larger numbers than their peers.  But when you have competition, the first thing they will go after is there is no difference in UX.  Why did google fiber fail?  I think it was likely because other than the expense, having significantly faster internet didn't interest people when you have another party who is actively interested (and able to cut price further) in spreading this information. 

Edit:  I realize this post may come off as sounding defensive.  It's not my intention, just trying to provide a variant view (that I believe lol). 
Title: Re: CHTR - Charter Communications
Post by: vince on September 16, 2018, 06:02:51 PM
I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence. 
Title: Re: CHTR - Charter Communications
Post by: jmp8822 on September 16, 2018, 06:13:32 PM
I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.

I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on September 16, 2018, 06:22:52 PM
Quote
I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?

It might, if it is reliable and the ping is good, Generally speaking, the ping on phones sucks and the speed vary a lot. In one spot you may be Ok, but you move a few meter and may have a very unsatisfactory connection. For the 5G to replace a good internet connection, the coverage and ping needs to be very good.
Title: Re: CHTR - Charter Communications
Post by: cameronfen on September 16, 2018, 06:23:52 PM
I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.

Yeah your points are generally the weak points of my thesis I do concede.  For some reason cable with higher bandwidth consistently takes share from DSL providers in Europe, which I really do not have a counterpoint for, however, we are comparing 100 mbps to between 1 and 10gbps, when in Europe the average speed is like 15-25 mbps.  I guess that is my retort.  That being said from a personal point of view I side with jmp on what type of cable package I view as the best value to me, and I think many other consumers if properly educated will see it this way too. 
Title: Re: CHTR - Charter Communications
Post by: vince on September 16, 2018, 06:46:54 PM
JMP, I am posting a quote by Rutledge recently that helps answer ur question about how long it takes Verizon to bring that network.   "Now they've said they're going to do 30 million homes passed over a 10-year period, at 10 years will be 140 million homes in the country so that will be about 20% of the country, and we'll represent 8% of that. So over a 10-year period, they're planning to overbuild 8% of our footprint. And we can, to the extent that any of that's a me-too product, we'll have a more competitive environment there and we'll have to deal with it. But we'll be moving our network along during that 10-year period."  In addition, Charter just rolled out a product to compete with Verizon and it is across 100 percent of their footprint nationally (chtrs footprint).  At least with that info it looks like chtr is better positioned although admittedly they have to pay Verizon for that mvno. By the time there is enough coverage to compete with chtr, 300 will not be enough
Title: Re: CHTR - Charter Communications
Post by: vince on September 16, 2018, 06:49:56 PM
Cam, just from reading Lbtya's transcripts it looks like their speeds are higher average than anyone elses in the u.s.  i admit I dont know the average speed across Europe tho.
Title: Re: CHTR - Charter Communications
Post by: vince on September 16, 2018, 08:23:23 PM
I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.




I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.
JMP, how can having unlimited seamless 300 mb at a similiar price trump 1 gig?  Even if the service was competitive mb for mb, (which is far from a sure thing because everyone knows that wireless gap in the network probably makes it less reliable under certain circumstances) its rather obvious that people will take the gig even if they cant recognize incremental benefit (such is human nature) and even if its priced slightly higher. 
Title: Re: CHTR - Charter Communications
Post by: dwy000 on September 16, 2018, 10:18:07 PM
What if that 300Mb was not just at home but was also your wireless plan.  Instead of $70 for unlimited 4G and $80 for unlimited home fixed wireless, Verizon was to charge $130 for unlimited 300Mb+ service regardless of where you are?  The lines between home and wireless, everywhere screens and watching (or service) are blurring.  Verizon appears to be betting they can be your 1 broadband provider - everywhere.  That's a pretty appealing prospect (if and when it works) especially if that level of capacity more than covers your needs.  The Comcasts and Charters of the world cannot compete with that except as MVNO.  I assume that's why Verizon stopped the Fios build out and even sold off a good chunk of the network - they knew that with 5G they would be overbuilding their own overbuild.

Ultimately, the cablecos and wireless need to merge.  It's the same product.  Cableco's are faster but wireless companies are broader coverage.
Title: Re: CHTR - Charter Communications
Post by: DooDiligence on September 17, 2018, 05:05:19 AM
I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.

I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.

Vince already said this and here it is from the horses mouth.

https://www.multichannel.com/news/charters-rutledge-we-have-a-better-platform-to-deploy-5g-than-cellular
Title: Re: CHTR - Charter Communications
Post by: jmp8822 on September 17, 2018, 07:19:30 AM
I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.

I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.

Vince already said this and here it is from the horses mouth.

https://www.multichannel.com/news/charters-rutledge-we-have-a-better-platform-to-deploy-5g-than-cellular

I would avoid gathering your news on risks to a business from a potentially disrupted company's CEO.  Could he be right? Of course, but I wouldn't take those quotes at face value. What would you expect him to say, we're toast? Verizon and AT&T are currently lighting up their 5G networks - cable cos?  Even if he is theoretically right, the "nationwide equivalent" network availability will eventually matter in my opinion. Verizon and AT&T are set up for this.
Title: Re: CHTR - Charter Communications
Post by: jmp8822 on September 17, 2018, 07:31:01 AM
I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.




I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.
JMP, how can having unlimited seamless 300 mb at a similiar price trump 1 gig?  Even if the service was competitive mb for mb, (which is far from a sure thing because everyone knows that wireless gap in the network probably makes it less reliable under certain circumstances) its rather obvious that people will take the gig even if they cant recognize incremental benefit (such is human nature) and even if its priced slightly higher.

If you can stream 4K with 25mb, why would I personally use anything close to 300mb? I wouldn't.  My home internet currently is 70mb which greatly exceeds my needs of streaming two HD devices almost all the time and online games. You're right that several consumers will jump to higher speeds just because.  However, I don't think that is a competitive advantage at the high end for consumers.  An example that could be compared: my laptop has 500gb of hard drive space.  I could have bought a much larger hard drive for little added cost. Yet, almost all consumers aren't installing 4TB hard drives in their computers.  Why? That isn't a bottleneck anymore, even though it was for years.  I think we have reached a similar point with 300mb+ internet speeds.  So, what if people now care more about latency and ability to use 5G in other locations? 5G could be the winner there.
Title: Re: CHTR - Charter Communications
Post by: walkie518 on September 17, 2018, 08:13:40 AM
I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.




I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.
JMP, how can having unlimited seamless 300 mb at a similiar price trump 1 gig?  Even if the service was competitive mb for mb, (which is far from a sure thing because everyone knows that wireless gap in the network probably makes it less reliable under certain circumstances) its rather obvious that people will take the gig even if they cant recognize incremental benefit (such is human nature) and even if its priced slightly higher.

If you can stream 4K with 25mb, why would I personally use anything close to 300mb? I wouldn't.  My home internet currently is 70mb which greatly exceeds my needs of streaming two HD devices almost all the time and online games. You're right that several consumers will jump to higher speeds just because.  However, I don't think that is a competitive advantage at the high end for consumers.  An example that could be compared: my laptop has 500gb of hard drive space.  I could have bought a much larger hard drive for little added cost. Yet, almost all consumers aren't installing 4TB hard drives in their computers.  Why? That isn't a bottleneck anymore, even though it was for years.  I think we have reached a similar point with 300mb+ internet speeds.  So, what if people now care more about latency and ability to use 5G in other locations? 5G could be the winner there.
Assuming Rutledge is forthright with the 80% mobile usage being in the house, which seems credible, do you believe that consumers are going to change habits? 

Will AT&T or Verizon disallow customers from connecting to the internet via a wifi router b/c the wireless carriers don't want to run over Charter's pipes?

I think it's more likely the MVNO makes Charter more valuable to Verizon (as an acquisition target) than the other way around....
Title: Re: CHTR - Charter Communications
Post by: jmp8822 on September 17, 2018, 09:01:41 AM
I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.




I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.
JMP, how can having unlimited seamless 300 mb at a similiar price trump 1 gig?  Even if the service was competitive mb for mb, (which is far from a sure thing because everyone knows that wireless gap in the network probably makes it less reliable under certain circumstances) its rather obvious that people will take the gig even if they cant recognize incremental benefit (such is human nature) and even if its priced slightly higher.

If you can stream 4K with 25mb, why would I personally use anything close to 300mb? I wouldn't.  My home internet currently is 70mb which greatly exceeds my needs of streaming two HD devices almost all the time and online games. You're right that several consumers will jump to higher speeds just because.  However, I don't think that is a competitive advantage at the high end for consumers.  An example that could be compared: my laptop has 500gb of hard drive space.  I could have bought a much larger hard drive for little added cost. Yet, almost all consumers aren't installing 4TB hard drives in their computers.  Why? That isn't a bottleneck anymore, even though it was for years.  I think we have reached a similar point with 300mb+ internet speeds.  So, what if people now care more about latency and ability to use 5G in other locations? 5G could be the winner there.
Assuming Rutledge is forthright with the 80% mobile usage being in the house, which seems credible, do you believe that consumers are going to change habits? 

Will AT&T or Verizon disallow customers from connecting to the internet via a wifi router b/c the wireless carriers don't want to run over Charter's pipes?

I think it's more likely the MVNO makes Charter more valuable to Verizon (as an acquisition target) than the other way around....

MVNO is a total commodity business.  There are dozens and dozens - and Charter will/does not offer the best price for MVNO.  If I can switch to Verizon for 5G and it is available at my house for the same price, why wouldn't you switch and get rid of cable internet? I get the availability of all 5G networks nationwide (as they come online), plus it is entirely wireless at my house, with much lower latency.  It seems like a no brainer unless you are downloading 20 4K movies per day to your hard drive and need 1gbps. 

The out of the house angle to me also is underrated. Think of business travelers in a hotel where 5G cells are nearby - you could stream 4K just like your home internet with no congestion.  No more hotel logins for terrible internet connections.  There are many reasons 5G can add lots of extra value with a network-effect.  The cable companies as far as I can tell are already several steps behind, if they expect people to sign up for their nationwide 5G service.
Title: Re: CHTR - Charter Communications
Post by: undervalued on September 17, 2018, 09:54:32 AM
I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.




I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.
JMP, how can having unlimited seamless 300 mb at a similiar price trump 1 gig?  Even if the service was competitive mb for mb, (which is far from a sure thing because everyone knows that wireless gap in the network probably makes it less reliable under certain circumstances) its rather obvious that people will take the gig even if they cant recognize incremental benefit (such is human nature) and even if its priced slightly higher.

If you can stream 4K with 25mb, why would I personally use anything close to 300mb? I wouldn't.  My home internet currently is 70mb which greatly exceeds my needs of streaming two HD devices almost all the time and online games. You're right that several consumers will jump to higher speeds just because.  However, I don't think that is a competitive advantage at the high end for consumers.  An example that could be compared: my laptop has 500gb of hard drive space.  I could have bought a much larger hard drive for little added cost. Yet, almost all consumers aren't installing 4TB hard drives in their computers.  Why? That isn't a bottleneck anymore, even though it was for years.  I think we have reached a similar point with 300mb+ internet speeds.  So, what if people now care more about latency and ability to use 5G in other locations? 5G could be the winner there.
Assuming Rutledge is forthright with the 80% mobile usage being in the house, which seems credible, do you believe that consumers are going to change habits? 

Will AT&T or Verizon disallow customers from connecting to the internet via a wifi router b/c the wireless carriers don't want to run over Charter's pipes?

I think it's more likely the MVNO makes Charter more valuable to Verizon (as an acquisition target) than the other way around....

MVNO is a total commodity business.  There are dozens and dozens - and Charter will/does not offer the best price for MVNO.  If I can switch to Verizon for 5G and it is available at my house for the same price, why wouldn't you switch and get rid of cable internet? I get the availability of all 5G networks nationwide (as they come online), plus it is entirely wireless at my house, with much lower latency.  It seems like a no brainer unless you are downloading 20 4K movies per day to your hard drive and need 1gbps. 

The out of the house angle to me also is underrated. Think of business travelers in a hotel where 5G cells are nearby - you could stream 4K just like your home internet with no congestion.  No more hotel logins for terrible internet connections.  There are many reasons 5G can add lots of extra value with a network-effect.  The cable companies as far as I can tell are already several steps behind, if they expect people to sign up for their nationwide 5G service.

You can't win an argument against speed because as faster speed become available, the faster technologies will take advantage of it. Faster is always better in this case. I can also see the argument against CHTR with people cutting cable to single service provider VZ. Why would you pay two bills mobile provider and cable provider when you can combine the two and save at least $50 ($50 and $70 for me) when your 5G speed is good enough for their needs? I don't have the fastest internet because I am unwilling to pay more than what I need. People will cut them for sure if they can use their 5G for everything they need, in the house and outside the house.

FYI, I am invested in CHTR.
Title: Re: CHTR - Charter Communications
Post by: Munger_Disciple on September 17, 2018, 09:59:43 AM
Quote
MVNO is a total commodity business.

Cable Co's MVNO is not a commodity business. They have a deep wired network with hundreds of thousands of access points both inside and outside the home. Thus they can offload lots of mobile traffic (especially video) to their Wifi access points. A commodity MVNO provider cannot do that.

Verizon is contractually obligated to provide its network to Charter and Comcast for MVNO as a part of wireless spectrum sales by cable companies to Verizon in the past. If it were not for that, I am pretty sure Verizon would not be providing access to their mobile network to cable cos.
Title: Re: CHTR - Charter Communications
Post by: walkie518 on September 17, 2018, 12:13:03 PM
I dont really want to speculate why demand is growing faster than need (if in fact that is the case), but we are definitely on opposite sides on this one.  You think competition might cause speeds to flatline because consumers will focus more on price (I think thats what u meant) and realize they dont need more than 100 mb.  I think competition up to 100-150 (or potential competition) is what caused cable to up their speeds cause they knew from recent experience (and also from European market behavior) that consumers would value it and were confident they would get paid for it.  But what I have come to appreciate more recently, after thinking this thru over and over, is that cable can give 1 gig to everyone in their footprint, almost for free, at very low incremental cost.  And like I said, I am not really sure about the scientific numbers and you (Cam) bring up some good points but I will almost guarantee that if cable feels like they want to or have to give 1 gig and 300-500 is their best competition, their market share will increase from today's levels.  Cable execs wont say it but I have come to believe this is a major factor in their confidence.




I get what you're saying here with speeds being very low cost to upgrade, but doesn't the concept of having 'unlimited' seamless 300mb speed at your house and in most major cities (unknown how long this might take) for a similar price point trump having 1 gig?  Plus the concept of not needing a cable guy at my house ever again is appealing. I think the network effect of mobile carriers could tip the scales because no one is cancelling mobile service anytime soon, whereas fixed cable internet? Maybe. It seems if there is one that will be disrupted it is more likely cable internet, instead of a nationwide mobile/broadband company with strong network effects.
JMP, how can having unlimited seamless 300 mb at a similiar price trump 1 gig?  Even if the service was competitive mb for mb, (which is far from a sure thing because everyone knows that wireless gap in the network probably makes it less reliable under certain circumstances) its rather obvious that people will take the gig even if they cant recognize incremental benefit (such is human nature) and even if its priced slightly higher.

If you can stream 4K with 25mb, why would I personally use anything close to 300mb? I wouldn't.  My home internet currently is 70mb which greatly exceeds my needs of streaming two HD devices almost all the time and online games. You're right that several consumers will jump to higher speeds just because.  However, I don't think that is a competitive advantage at the high end for consumers.  An example that could be compared: my laptop has 500gb of hard drive space.  I could have bought a much larger hard drive for little added cost. Yet, almost all consumers aren't installing 4TB hard drives in their computers.  Why? That isn't a bottleneck anymore, even though it was for years.  I think we have reached a similar point with 300mb+ internet speeds.  So, what if people now care more about latency and ability to use 5G in other locations? 5G could be the winner there.
Assuming Rutledge is forthright with the 80% mobile usage being in the house, which seems credible, do you believe that consumers are going to change habits? 

Will AT&T or Verizon disallow customers from connecting to the internet via a wifi router b/c the wireless carriers don't want to run over Charter's pipes?

I think it's more likely the MVNO makes Charter more valuable to Verizon (as an acquisition target) than the other way around....

MVNO is a total commodity business.  There are dozens and dozens - and Charter will/does not offer the best price for MVNO.  If I can switch to Verizon for 5G and it is available at my house for the same price, why wouldn't you switch and get rid of cable internet? I get the availability of all 5G networks nationwide (as they come online), plus it is entirely wireless at my house, with much lower latency.  It seems like a no brainer unless you are downloading 20 4K movies per day to your hard drive and need 1gbps. 

The out of the house angle to me also is underrated. Think of business travelers in a hotel where 5G cells are nearby - you could stream 4K just like your home internet with no congestion.  No more hotel logins for terrible internet connections.  There are many reasons 5G can add lots of extra value with a network-effect.  The cable companies as far as I can tell are already several steps behind, if they expect people to sign up for their nationwide 5G service.
Given what you may be doing today, true 5G service may make it seem appealing to make the switch, but this disregards developments in multiplexing as well as how demand will change with changes in the nature of supply. 

Once 5G is ready and there are 5G devices available to consumers in scale, content for those networks will upgrade to make use of all the good things that come with faster speeds.  When there are more lanes in the highway, they get used.
Title: Re: CHTR - Charter Communications
Post by: cameronfen on September 17, 2018, 12:36:58 PM
Cam, just from reading Lbtya's transcripts it looks like their speeds are higher average than anyone elses in the u.s.  i admit I dont know the average speed across Europe tho.

I know this discussion moves like 3 pages a day but if you are still interested: https://en.wikipedia.org/wiki/List_of_countries_by_Internet_connection_speeds
Title: Re: CHTR - Charter Communications
Post by: vince on September 17, 2018, 02:47:34 PM
What if that 300Mb was not just at home but was also your wireless plan.  Instead of $70 for unlimited 4G and $80 for unlimited home fixed wireless, Verizon was to charge $130 for unlimited 300Mb+ service regardless of where you are?  The lines between home and wireless, everywhere screens and watching (or service) are blurring.  Verizon appears to be betting they can be your 1 broadband provider - everywhere.  That's a pretty appealing prospect (if and when it works) especially if that level of capacity more than covers your needs.  The Comcasts and Charters of the world cannot compete with that except as MVNO.  I assume that's why Verizon stopped the Fios build out and even sold off a good chunk of the network - they knew that with 5G they would be overbuilding their own overbuild.

Ultimately, the cablecos and wireless need to merge.  It's the same product.  Cableco's are faster but wireless companies are broader coverage.
I am posting a recent quote by chtr's cfo.  When he mentions $45 he means thats what it costs for unlimited mobile data. "
 Expanding the broadband Internet terminal penetration that I mentioned before, I know you and I spoke about it last night, but if you take a typical customer in the U.S., assume they have 2 lines, it's going to be about $130, $150 that they're paying for their cellular service today. If one of those users is a heavy user and one of them is a light user, we can offer them, in most cases, a better network. We can offer them a service that's going to be $45, plus for 2 gigs times $14 so $28, so $73, we can offer them a better service at a much lower price. If you then add our rack rate Internet pricing for 200 megabits per second at $65, which has access to WiFi in the home, WiFi outside the home, WiFi in businesses, then in that scenario we're doing, what's that, $73 plus $65, $138. I can potentially save them money, put them on a better network, give them much better usage of their phone because they're no longer constrained to 20 gigs. They get essentially real unlimited usage on their phone now because they have access to all the WiFi. That's a dramatic improvement in their Internet connectivity and a significant savings and a better service, both on their LTE network as well as on their in-home WiFi, which didn't exist in that case before. So I think we're going to drive a lot of incremental cable and connectivity sales along the way. Will that drive through and lift video and potentially fixed line phone? Maybe, but the biggest and most important point for us is to drive Internet sales"
So chtr has a mobile product across their whole footprint ALREADY up and running that in some ways is better than Verizons (no data caps) and will save the customer real money in a product that they must have. Do u really think Verizon can offer unlimited with no data caps to all their customers? No chance.  And this is no small advantage.  Verizon's response, 5g, is an inferior product when it comes to reliability and is going to take 10 years (they said this publicly) to overbuild a small percentage of chtr's footprint.  And realize that they will not get anywhere near 100% penetration of that 8%, inertia is alive and well in cable land.  How about small business and enterprise customers?  Cable has been rapidly taking share from telecoms for years (please dont continue telling me what u would do, this is what is already happening) in B to B because they have a superior product at a lower cost.  But you know what else they have?  Nationwide coverage where the cable companies cooperate (they are cooperating on mobile as well) that I'm sure everyone can appreciate how big of an advantage that is when you are serving enterprises with multiple locations nationally.  Is 5G an answer to that? I dont see any telecoms cooperating to defeat cable which would be very difficult anyway because of how much time and capital it is gonna take.  I will admit that whenever I hear of any product that could potentially compete with cable it scares the crap out of me.  But any rational person has to admit that at this point in time cable has some serious competitive advantages.  Also notable is the fact that cable probably has an easier and cheaper path to its own 5G. 
   It is no secret that Verizon started this push to 5G AFTER they realized that buying their broadband network, via Charter, wasnt  going to be any cheaper. Lastly, I agree that there will be mobile-fixed consolidation, I just think it will be on terms very favorable to cable
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on September 17, 2018, 04:25:40 PM
Also how likely is it that Verizon wireless, who has been the price leader in wireless is actually committed to executing a plan that will cost them tenth of billions in Capex, obsoletes their broadband business and reduces their ARPU in their wireless business? Makes no sense and ergo isn’t likely to happen. If VZW can indeed change fifer seamless unlimited broadband for 300MB/sec without device restrictions they for sure won’t do that for $50/ month. right now they charge a customer about $80/ month for broadband and probably $70/month for wireless and you think they are stupid enough to offer a better service for  1/3 of the price. If that were true one needs to short everything , including the debt of all telecom and cable cos.
Title: Re: CHTR - Charter Communications
Post by: cameronfen on September 17, 2018, 05:09:59 PM
I think currently broadband in combination with MVNO is as good as it gets.  However if Charter takes too much share (they might not as most MVNOs don't have that much luck even with the same reception), how difficult would it be for Congress to say no to telecos who say its unfair they have to rent their assets out to cable companies, but cable is allowed a monopoly on fiber assets.  Even though the plan Charter has is a good one right now, the future whether its 10 years or longer is wireless broadband.  It's just cheaper in terms of CapEx and upgrade cycle than fixed line (much of the improvement in if necessary will come in increase compression and software efficiency to transmit the signal rather than digging up wires and putting new ones in).  We don't need massive bandwidth so far and so the lower bandwidth will be okay (but I guess google with google fiber disagrees).  If Verizon doesn't cannibalize its broadband business another teleco without significant cable assets like t-mobile or sprint or AT&T will eventually move into the spot. 
Title: Re: CHTR - Charter Communications
Post by: vince on September 17, 2018, 05:53:56 PM
I think Cam hit the thing that really scares me... regulation.  I dont think its a forgone conclusion that wireless is the future of broadband and its actually (arguably) more expensive for a wireless drop than fiber to the home.  Advancements in compression is also a risk but probably further down than road whereas I believe there is a good probability that Charter will deliver a solid 50 -80 percent total return over next few years with little downside risk (read cable cowboy and everything else you can get your hands on and you will understand why the business is very durable even with competing technologies).  Not that anybody cares but I have ensured that it will be a very nice payoff at those types of returns.
Title: Re: CHTR - Charter Communications
Post by: vince on September 17, 2018, 06:28:31 PM
Also how likely is it that Verizon wireless, who has been the price leader in wireless is actually committed to executing a plan that will cost them tenth of billions in Capex, obsoletes their broadband business and reduces their ARPU in their wireless business? Makes no sense and ergo isn’t likely to happen. If VZW can indeed change fifer seamless unlimited broadband for 300MB/sec without device restrictions they for sure won’t do that for $50/ month. right now they charge a customer about $80/ month for broadband and probably $70/month for wireless and you think they are stupid enough to offer a better service for  1/3 of thre price. If that were true one needs to short everything , including the debt of all telecom and cable cos.
Spek, I dont think anyone believes that 5G has even a remote chance to make the fiber/coax hybrid obsolete.  Rather, imo, the telcos find themselves between a rock and hard place.  If they dont react competitively, cable continues to capture (slightly) more than 100% of net fixed residential broadband adds (this has been going on for at least 5-7 years) and even more lopsided in business services (although they are starting from a low market share base).  In addition, with Charter guaranteed to increase the attack by launching mobile, it was obvious to everyone that customer losses would accelerate.  There was just no way Verizon could stand still and see how it would play out.  So, without any good options (buying Charter for 500 a share would have been unacceptable to shareholder base who want guaranteed dividend) they decide on an option that ensures dismal returns (does anyone really believe they will pursue this course for a decade?) but one that potentially inflicts pain on their competition (why did Lowell retire?) 
   Charter is growing business services sales....in units, by 10 percent.  Yes revenue growth is lower cause they repriced the acquired footprint.  For those that are interested, they will be cycling that repricing soon which when combined with some opex  rolling off and most of their acquired footprint under their new pricing and packaging, ebitda growth is going to get a nice bump.  Starting in 3rd qtr of 2019 I predict between 7-12 percent yoy ebitda growth, with free cash growing faster because of capex rolling off as well.  Trading at 10-11 times earning power, (80 billion market cap with 7-8 billion of normalized earnings) assuming my growth rates are reasonable, you have a mid-high teens compounder without multiple expansion (or contraction) and no EXTRA benefit from buying their shares back at less than intrinsic value.  Please note that their 7-8 billion of earning power assumes no growth.  I see a couple good years in front of us.
Title: Re: CHTR - Charter Communications
Post by: cameronfen on September 17, 2018, 08:00:19 PM
A couple things:  when I talk about capex for wireless broadband I'm not talking about the initial outlay.  I believe that wireless broadband is or basically will be very soon cheaper to build out than cable starting from scratch, but cable is certainly competitive and I could be wrong.  The big benefit of having wireless broadband is the upgrade cycle once you have it set up.  If you want to go to 6G, you dont need any more cables, you just upgrade the software to use the more efficient compression algorithm.  It's all software and there is no capex.  Now I am on the record saying that bandwidth is not a problem, but long long term if it is a problem, the fastest way to keep up with growing bandwidth involves wireless broadband.  Additionally other upgrades like range and robustness require much less capex than fiber because these upgrades can be half software half changing the antenna.  I do think that 5g wireless is not good enough to compete with broadband in this moment actually, based on things said by Charter and America Movil.  However, 90% of the value of a stock is in its terminal value, and wireless broadband is the future.  Will Charter be able to pivot?  I dont know.  Near term earnings will definitely grow due to the integration of acquisitions, but long term I don't know. 
Title: Re: CHTR - Charter Communications
Post by: vince on September 17, 2018, 08:15:26 PM
Hey Cam, can u please give me some specific calls where america movil talks about this? the more specific conference calls that u can specify, the better for me.  I dont really need specific paragraphs or anything like that (and obviously wouldnt expect that kind of detail) unless u have that kind of stuff organized that way already in your notes.  Would be greatly appreciated
Title: Re: CHTR - Charter Communications
Post by: vince on September 17, 2018, 08:17:19 PM
A couple things:  when I talk about capex for wireless broadband I'm not talking about the initial outlay.  I believe that wireless broadband is or basically will be very soon cheaper to build out than cable starting from scratch, but cable is certainly competitive and I could be wrong.  The big benefit of having wireless broadband is the upgrade cycle once you have it set up.  If you want to go to 6G, you dont need any more cables, you just upgrade the software to use the more efficient compression algorithm.  It's all software and there is no capex.  Now I am on the record saying that bandwidth is not a problem, but long long term if it is a problem, the fastest way to keep up with growing bandwidth involves wireless broadband.  Additionally other upgrades like range and robustness require much less capex than fiber because these upgrades can be half software half changing the antenna.  I do think that 5g wireless is not good enough to compete with broadband in this moment actually, based on things said by Charter and America Movil.  However, 90% of the value of a stock is in its terminal value, and wireless broadband is the future.  Will Charter be able to pivot?  I dont know.  Near term earnings will definitely grow due to the integration of acquisitions, but long term I don't know.
Are u including the wired backbone when you talk about the near future 5G wireless infrastructure?
Title: Re: CHTR - Charter Communications
Post by: cameronfen on September 18, 2018, 06:32:38 AM
yes but from what I have read, wired backbone isn't what needs to be upgraded all that often.  It's the last mile stuff that does.  But ya there is no advantage in upgrades the backbone for sure. 
Title: Re: CHTR - Charter Communications
Post by: vince on September 18, 2018, 08:56:20 AM
But the problem for telcos is that they dont have the backhaul infrastructure in place and it will take a long time and lots of capital, regardless of what they have for the last mile.  In the meantime cable can take advantage of any new technologies if need be.  Now Verizon probably has a leg up for 5G in certain markets because they have some valuable spectrum that works well for 5G but I just dont see how anyone can claim, with all factors considered and based on what is known today that Verizon is in pole position
Title: Re: CHTR - Charter Communications
Post by: cameronfen on September 18, 2018, 09:13:52 AM
sure I'm not talking about the backhaul needed now, but rather the capex needed to maintain and grow a wireless broadband infrastructure is far less than what traditional cable companies (and even phone companies need). The next generation wireless (6g) is most or not all software based and generations in the foreseeable future are all software based.  So if you want to increase range or bandwidth no more building more capex you just change some algorithm that's coded into your small cell.  This makes competing against wireless broadband increasingly difficult 10-20 years down the road. 
Title: Re: CHTR - Charter Communications
Post by: BG2008 on September 18, 2018, 11:23:57 AM
Does anyone use Spectrum mobile?  We've been talking about the threat of 5G to CHTR.  So 5G is a small cell mounted (typically on telephone poles) that delivers data into your house.  This is supposed to really cut the cord of cable companies. If you are a Verizon user, you can have the 4G LTE phone plane and a 5G for your house.  The fear is that Verizon 5G moves into a CHTR territory and totally uproots CHTR.  Now let's look at Spectrum Mobiles offering in response.  Spectrum mobile is only available for Spectrum broadband users.  In short, you have Verizon 4G LTE mobile services because that's the network that MVNO runs on.  So same product basically.  Now, you get to use Spectrum wired broadband instead of some new 5G services that could be affected by rain, leaves, trucks versus the permanent always on nature of Spectrum broadband.  I haven't looked at exact pricing yet, but it seems like that CHTR will have a leg up in a face off.  If you check the map of Spectrum WiFi, it looks like a 5G map already.  Spectrum has a ton of indoor and outdoor WiFi spots.  Apparently the speed today isn't that great.  Most user patterns is 20% 4G LTE and 80% data intensive at home Wifi usage.  Given CHTR footprint they already have most of the locations wired. 

While Verizon and all the other Telcos are trumpeting 5G and how it will destroy cable companies, it seems that Cables wired connection with lesser downtime issues and its mobile services via Verizon's network actually offers a much better combined product. 

The thing that I worry about is that Cableco's customer service reputation is so bad that I would not even consider getting mobile through them.  The only reason why I figured this out is because of my involvement in CHTR.   
Title: Re: CHTR - Charter Communications
Post by: cameronfen on September 18, 2018, 04:59:57 PM
my guess is mvnos can only use telco infrastructure for phone and phone data.  They likely (dont know this for sure) can't use small cells to sell wireless broadband.  The issue with wireless broadband isn't that it will cover more people, but rather that it will cover the same people as cable but at what some people say is a lower all in cost for the company.  What people are saying isn't that wireless broadband isn't a superior product (although stuff like rain won't really effect your service just like it doesnt really effect phone data service anymore), but that it has the potential to be way cheaper. 
Title: Re: CHTR - Charter Communications
Post by: BG2008 on September 18, 2018, 05:42:38 PM
my guess is mvnos can only use telco infrastructure for phone and phone data.  They likely (dont know this for sure) can't use small cells to sell wireless broadband.  The issue with wireless broadband isn't that it will cover more people, but rather that it will cover the same people as cable but at what some people say is a lower all in cost for the company.  What people are saying isn't that wireless broadband isn't a superior product (although stuff like rain won't really effect your service just like it doesnt really effect phone data service anymore), but that it has the potential to be way cheaper.

Yes, I understand that Spectrum can't use Verizon's small cell to sell wireless broadband.  What I am saying is that Spectrum can offer its customers the ability to use Verizon's MVNO for mobile when Spectrum WiFi is not available.  When Spectrum WiFi is available, the Spectrum Mobile users can use that out-of-home WiFi to stream data into their phone.  The promise of Verizon's 5G plan is that it will cut the cable cord.  What I am saying is that Spectrum and Comcast appears to be going on the offensive already.  They are offering the corded cable to your house plus 200,000 WiFi locations that you can connect to outside of your house.  It appears that Spectrum is already offering a 5G like service for its MVNO due to all the public and private WiFi locations it has installed.
Title: Re: CHTR - Charter Communications
Post by: cameronfen on September 18, 2018, 07:14:16 PM
my guess is mvnos can only use telco infrastructure for phone and phone data.  They likely (dont know this for sure) can't use small cells to sell wireless broadband.  The issue with wireless broadband isn't that it will cover more people, but rather that it will cover the same people as cable but at what some people say is a lower all in cost for the company.  What people are saying isn't that wireless broadband isn't a superior product (although stuff like rain won't really effect your service just like it doesnt really effect phone data service anymore), but that it has the potential to be way cheaper.

Yes, I understand that Spectrum can't use Verizon's small cell to sell wireless broadband.  What I am saying is that Spectrum can offer its customers the ability to use Verizon's MVNO for mobile when Spectrum WiFi is not available.  When Spectrum WiFi is available, the Spectrum Mobile users can use that out-of-home WiFi to stream data into their phone.  The promise of Verizon's 5G plan is that it will cut the cable cord.  What I am saying is that Spectrum and Comcast appears to be going on the offensive already.  They are offering the corded cable to your house plus 200,000 WiFi locations that you can connect to outside of your house.  It appears that Spectrum is already offering a 5G like service for its MVNO due to all the public and private WiFi locations it has installed.

Sure I'm not arguing the Charter has a sweet deal right now being able to rent telecom assets at regulated prices while having sole ownership of its fiber assets, but a.) if charter has too much sucess with this approach (which is not a guarantee as how many people switch to mvnos actually even among us investors who know they have the same assets), it's a relatively easy case for telecoms to argue that they should have free access to fiber at regulated prices.  That being said the more important argument is that while Charter likely has an advantage now, the long term and structural advantage goes to whoever develops wireless broadband. 
Title: Re: CHTR - Charter Communications
Post by: cmlber on September 18, 2018, 07:26:30 PM
Sure I'm not arguing the Charter has a sweet deal right now being able to rent telecom assets at regulated prices while having sole ownership of its fiber assets, but a.) if charter has too much sucess with this approach (which is not a guarantee as how many people switch to mvnos actually even among us investors who know they have the same assets), it's a relatively easy case for telecoms to argue that they should have free access to fiber at regulated prices.  That being said the more important argument is that while Charter likely has an advantage now, the long term and structural advantage goes to whoever develops wireless broadband.

Where are you getting this information?  Charter does not rent telecom assets under regulated prices...  its MVNO deal was privately negotiated as part of a sale of spectrum in 2011.
Title: Re: CHTR - Charter Communications
Post by: jmp8822 on September 18, 2018, 07:49:37 PM
my guess is mvnos can only use telco infrastructure for phone and phone data.  They likely (dont know this for sure) can't use small cells to sell wireless broadband.  The issue with wireless broadband isn't that it will cover more people, but rather that it will cover the same people as cable but at what some people say is a lower all in cost for the company.  What people are saying isn't that wireless broadband isn't a superior product (although stuff like rain won't really effect your service just like it doesnt really effect phone data service anymore), but that it has the potential to be way cheaper.

Yes, I understand that Spectrum can't use Verizon's small cell to sell wireless broadband.  What I am saying is that Spectrum can offer its customers the ability to use Verizon's MVNO for mobile when Spectrum WiFi is not available.  When Spectrum WiFi is available, the Spectrum Mobile users can use that out-of-home WiFi to stream data into their phone.  The promise of Verizon's 5G plan is that it will cut the cable cord.  What I am saying is that Spectrum and Comcast appears to be going on the offensive already.  They are offering the corded cable to your house plus 200,000 WiFi locations that you can connect to outside of your house.  It appears that Spectrum is already offering a 5G like service for its MVNO due to all the public and private WiFi locations it has installed.

Random anecdote- I just received a mailer today at my home to sign up for Spectrum mobile - I'm a current 'internet only' Spectrum customer.  Timely to our discussions here.

Also, I was curious to look at the Spectrum wireless hotspot map because I have never used it. I'm trying to think why I would ever use it.  I currently receive 100+ Mbps to my Galaxy S9 via T-mobile wireless service.  The only hang-up would be data usage, which for me by definition - I'm out and about and don't want to fool with logging into some random wifi to save 50mb of data typically. Hotspots also have some limitations when you're out and about because you are moving and they are quite limited in range (300 feet or so), similar to your home router.  My understanding of Verizon's 5G product (according to what they've tested) is that it will reach 1,500 feet or so with some obstacles and 3,000 feet approximately with no obstructions.  Going in and out of hotspots in a car for example would be quite disruptive to streaming video.  So, if you think adding a bunch of fixed wireless is too many locations required, just imagine how many it would take to truly blanket 60 major cities in the U.S. at 300 feet per hotspot.  It seems like a simple race to fully cover all major cities in the US with fiber-like wireless (5G) and I don't think cable will be the victor.  The telecoms are simply going to do it no matter what, it seems, considering how much they talk about self-driving cars, etc.  They don't seem as concerned about the capex as everyone here is - I think they will finish and cover all relevant cities/areas with 5G - they can't help themselves.
Title: Re: CHTR - Charter Communications
Post by: dwy000 on September 18, 2018, 08:22:55 PM
Neither Verizon, nor Charter nor Comcast have given any details on the MVNO relationship.  There is a big question in my mind as to whether it would cover 5G or just the existing 4G/LTE assets.  If it covers 5G, the competitive.dynamic for cablecos is much better over.the medium term.  If not.....
Title: Re: CHTR - Charter Communications
Post by: BG2008 on September 19, 2018, 01:18:57 AM
Neither Verizon, nor Charter nor Comcast have given any details on the MVNO relationship.  There is a big question in my mind as to whether it would cover 5G or just the existing 4G/LTE assets.  If it covers 5G, the competitive.dynamic for cablecos is much better over.the medium term.  If not.....

I am making my investment under the assumption that the MVNO only covers the 4G LTE service.  I believe that is the existing relationship.
Title: Re: CHTR - Charter Communications
Post by: cameronfen on September 19, 2018, 05:16:38 AM
Sure I'm not arguing the Charter has a sweet deal right now being able to rent telecom assets at regulated prices while having sole ownership of its fiber assets, but a.) if charter has too much sucess with this approach (which is not a guarantee as how many people switch to mvnos actually even among us investors who know they have the same assets), it's a relatively easy case for telecoms to argue that they should have free access to fiber at regulated prices.  That being said the more important argument is that while Charter likely has an advantage now, the long term and structural advantage goes to whoever develops wireless broadband.

Where are you getting this information?  Charter does not rent telecom assets under regulated prices...  its MVNO deal was privately negotiated as part of a sale of spectrum in 2011.

Right that's correct I forgot about this case, However,  I think by law though telecoms have to rent the telecom assets to mvnos at a price that if can't be negotiated will be set by government, but this is slightly different.  My point here though is the government is basically forcing telecoms to rent to charter and other mvnos and that could be problematic when charter gets to successful in the mobile space. 
Title: Re: CHTR - Charter Communications
Post by: glorysk87 on September 19, 2018, 06:26:05 AM
I'm out and about and don't want to fool with logging into some random wifi to save 50mb of data typically.

I believe if you download the Spectrum iOS or Android app and install the Spectrum profile it will automatically detect and connect to hotspots when you're out and about, rather than you having to manually do it.
Title: Re: CHTR - Charter Communications
Post by: jmp8822 on September 19, 2018, 06:28:06 AM
I'm out and about and don't want to fool with logging into some random wifi to save 50mb of data typically.

I believe if you download the Spectrum iOS or Android app and install the Spectrum profile it will automatically detect and connect to hotspots when you're out and about, rather than you having to manually do it.

That makes much more sense thanks.
Title: Re: CHTR - Charter Communications
Post by: KJP on September 19, 2018, 08:02:41 AM
Sure I'm not arguing the Charter has a sweet deal right now being able to rent telecom assets at regulated prices while having sole ownership of its fiber assets, but a.) if charter has too much sucess with this approach (which is not a guarantee as how many people switch to mvnos actually even among us investors who know they have the same assets), it's a relatively easy case for telecoms to argue that they should have free access to fiber at regulated prices.  That being said the more important argument is that while Charter likely has an advantage now, the long term and structural advantage goes to whoever develops wireless broadband.

Where are you getting this information?  Charter does not rent telecom assets under regulated prices...  its MVNO deal was privately negotiated as part of a sale of spectrum in 2011.

Right that's correct I forgot about this case, However,  I think by law though telecoms have to rent the telecom assets to mvnos at a price that if can't be negotiated will be set by government, but this is slightly different.  My point here though is the government is basically forcing telecoms to rent to charter and other mvnos and that could be problematic when charter gets to successful in the mobile space.

I'm not aware of any obligation in the United States to provide network access to an MNVO, nor any regulation of the wholesale rates negotiated between mobile network operators and MVNOs.  (The FCC does require interconnection among wireless  networks, i.e., "roaming," at commercially reasonable rates.)  Indeed, some of the commentary around a potential Sprint-T-Mobile merger is that wholesale rates should be regulated in the future because those two are big suppliers to MVNOs.  For example, here's one argument that Sprint and T-Mobile should not be permitted to merge without a new wholesale pricing regulatory regime being put in place:  https://globenewswire.com/news-release/2018/05/21/1509213/0/en/Founder-and-Former-CEO-of-Boost-Mobile-USA-Raises-Concerns-that-Prepaid-Customers-are-Being-Forgotten-in-Sprint-T-Mobile-Merger-Plan.html

If you are aware of any source discussing the regulation of wholesale rates charged by MNOs to MVNOs, I'd be very interested to see it.

Title: Re: CHTR - Charter Communications
Post by: Liberty on September 19, 2018, 08:26:22 AM
Charter and Comcast have access to MVNO from Verizon because of a 2011 deal:

https://www.fiercewireless.com/wireless/charter-ceo-now-we-own-twc-we-can-use-verizon-mvno-deal-to-offer-nationwide-wireless

Quote
The Verizon agreement in question refers to a 2011 deal in which Verizon purchased AWS-1 spectrum from Bright House Networks, Comcast, Cox and TWC (a group dubbed SpectrumCo) and in return gave those companies access to its wireless network for use in a potential MVNO offering.
Title: Re: CHTR - Charter Communications
Post by: dwy000 on September 19, 2018, 08:28:59 AM
Sure I'm not arguing the Charter has a sweet deal right now being able to rent telecom assets at regulated prices while having sole ownership of its fiber assets, but a.) if charter has too much sucess with this approach (which is not a guarantee as how many people switch to mvnos actually even among us investors who know they have the same assets), it's a relatively easy case for telecoms to argue that they should have free access to fiber at regulated prices.  That being said the more important argument is that while Charter likely has an advantage now, the long term and structural advantage goes to whoever develops wireless broadband.

Where are you getting this information?  Charter does not rent telecom assets under regulated prices...  its MVNO deal was privately negotiated as part of a sale of spectrum in 2011.

Right that's correct I forgot about this case, However,  I think by law though telecoms have to rent the telecom assets to mvnos at a price that if can't be negotiated will be set by government, but this is slightly different.  My point here though is the government is basically forcing telecoms to rent to charter and other mvnos and that could be problematic when charter gets to successful in the mobile space.

I'm not aware of any obligation in the United States to provide network access to an MNVO, nor any regulation of the wholesale rates negotiated between mobile network operators and MVNOs.  (The FCC does require interconnection among wireless  networks, i.e., "roaming," at commercially reasonable rates.)  Indeed, some of the commentary around a potential Sprint-T-Mobile merger is that wholesale rates should be regulated in the future because those two are big suppliers to MVNOs.  For example, here's one argument that Sprint and T-Mobile should not be permitted to merge without a new wholesale pricing regulatory regime being put in place:  https://globenewswire.com/news-release/2018/05/21/1509213/0/en/Founder-and-Former-CEO-of-Boost-Mobile-USA-Raises-Concerns-that-Prepaid-Customers-are-Being-Forgotten-in-Sprint-T-Mobile-Merger-Plan.html

If you are aware of any source discussing the regulation of wholesale rates charged by MNOs to MVNOs, I'd be very interested to see it.

The requirement is under Title II of the Communications Act which requires incubmbent carriers to provide wholesale access at cost based rates to new entrants.  Historically this applied to voice and there were questions as to whether that covered data.  In 2015 when the FCC applied Net Neutrality they did so with a broad brush by having internet/data governed by Title II (which incorporates a huge amount of potential gov't control well beyond Net Neutrality - gov't can regulate access, price, investment, etc).  While the FCC now is seeking to reverse the Net Neutrality requirements there's a question of whether that is going to be specific to Net Neutrality or if they are entirely exempting internet/data from Title II regulation.

As John Malone has said repeatedly, you want to own your network or you are at the mercy of the people who do.  There have been very, very few MVNO's in the US that have been successful over the long term.
Title: Re: CHTR - Charter Communications
Post by: KJP on September 19, 2018, 08:37:55 AM
Charter and Comcast have access to MVNO from Verizon because of a 2011 deal:

https://www.fiercewireless.com/wireless/charter-ceo-now-we-own-twc-we-can-use-verizon-mvno-deal-to-offer-nationwide-wireless

Quote
The Verizon agreement in question refers to a 2011 deal in which Verizon purchased AWS-1 spectrum from Bright House Networks, Comcast, Cox and TWC (a group dubbed SpectrumCo) and in return gave those companies access to its wireless network for use in a potential MVNO offering.

I know.  I was responding to the suggestion that, in general, the US requires mandatory network access to MVNOs at regulated rates.
Title: Re: CHTR - Charter Communications
Post by: dwy000 on September 19, 2018, 08:40:47 AM
Quote from Malone back in 2017:

"We fundamentally believe we can make money for the shareholders through a wireless offering with the unique relationship that we have with the Verizon MVNO," Comcast Chairman and CEO Brian Roberts said in his most recent quarterly earnings call. "We can't go into detail about that relationship for obvious reasons, but we have the ability to do things that we think put us in a position to make that statement come true and create real value for our shareholders along the way."
Malone, however, said he believes that it's more likely that consolidation will take place among wireless and cable providers, rather than cable companies launching their own wireless networks.
"At some point, the [wireless] network that's supplying that to you is unhappy with you becoming a full competitor on their capital assets. And you start to get squeezed. You also don't have the ability to innovate services, because you're essentially a reseller of their service," he said.
Malone pointed to further and more aggressive relationships between cable and wireless companies as a solution to that problem.
"It's fine for Charter and Comcast to go down the MVNO road for a while, particular in the [business-to-business] world, because they have a great relationship with Verizon, which is the best technology network," he said. "So you can start that way, but my belief is they will have to have a much deeper relationship with Verizon in the long run to make that work."
Title: Re: CHTR - Charter Communications
Post by: walkie518 on September 19, 2018, 08:58:29 AM
Quote from Malone back in 2017:

"We fundamentally believe we can make money for the shareholders through a wireless offering with the unique relationship that we have with the Verizon MVNO," Comcast Chairman and CEO Brian Roberts said in his most recent quarterly earnings call. "We can't go into detail about that relationship for obvious reasons, but we have the ability to do things that we think put us in a position to make that statement come true and create real value for our shareholders along the way."
Malone, however, said he believes that it's more likely that consolidation will take place among wireless and cable providers, rather than cable companies launching their own wireless networks.
"At some point, the [wireless] network that's supplying that to you is unhappy with you becoming a full competitor on their capital assets. And you start to get squeezed. You also don't have the ability to innovate services, because you're essentially a reseller of their service," he said.
Malone pointed to further and more aggressive relationships between cable and wireless companies as a solution to that problem.
"It's fine for Charter and Comcast to go down the MVNO road for a while, particular in the [business-to-business] world, because they have a great relationship with Verizon, which is the best technology network," he said. "So you can start that way, but my belief is they will have to have a much deeper relationship with Verizon in the long run to make that work."
Not sure why Masa didn't jump for Charter at Malone's price?  The cost to Sprint/Tmobile will be immense ...
Title: Re: CHTR - Charter Communications
Post by: cameronfen on September 19, 2018, 09:21:51 AM
Quote from Malone back in 2017:

"We fundamentally believe we can make money for the shareholders through a wireless offering with the unique relationship that we have with the Verizon MVNO," Comcast Chairman and CEO Brian Roberts said in his most recent quarterly earnings call. "We can't go into detail about that relationship for obvious reasons, but we have the ability to do things that we think put us in a position to make that statement come true and create real value for our shareholders along the way."
Malone, however, said he believes that it's more likely that consolidation will take place among wireless and cable providers, rather than cable companies launching their own wireless networks.
"At some point, the [wireless] network that's supplying that to you is unhappy with you becoming a full competitor on their capital assets. And you start to get squeezed. You also don't have the ability to innovate services, because you're essentially a reseller of their service," he said.
Malone pointed to further and more aggressive relationships between cable and wireless companies as a solution to that problem.
"It's fine for Charter and Comcast to go down the MVNO road for a while, particular in the [business-to-business] world, because they have a great relationship with Verizon, which is the best technology network," he said. "So you can start that way, but my belief is they will have to have a much deeper relationship with Verizon in the long run to make that work."

I think a big reason most mvnos dont do well is they usually dont bring anything to the table.  They just give you the Verizon network for example with less advertising and brand strength as Verizon and nothing else, so you have to compete on price.  Obviously this is a huge disadvantage for Charter and other cable companies but at least they have an inborn advantage over traditional telecoms with their hotspots they can exploit, so it might go better for them. 
Title: Re: CHTR - Charter Communications
Post by: KJP on September 19, 2018, 10:58:40 AM
Sure I'm not arguing the Charter has a sweet deal right now being able to rent telecom assets at regulated prices while having sole ownership of its fiber assets, but a.) if charter has too much sucess with this approach (which is not a guarantee as how many people switch to mvnos actually even among us investors who know they have the same assets), it's a relatively easy case for telecoms to argue that they should have free access to fiber at regulated prices.  That being said the more important argument is that while Charter likely has an advantage now, the long term and structural advantage goes to whoever develops wireless broadband.

Where are you getting this information?  Charter does not rent telecom assets under regulated prices...  its MVNO deal was privately negotiated as part of a sale of spectrum in 2011.

Right that's correct I forgot about this case, However,  I think by law though telecoms have to rent the telecom assets to mvnos at a price that if can't be negotiated will be set by government, but this is slightly different.  My point here though is the government is basically forcing telecoms to rent to charter and other mvnos and that could be problematic when charter gets to successful in the mobile space.

I'm not aware of any obligation in the United States to provide network access to an MNVO, nor any regulation of the wholesale rates negotiated between mobile network operators and MVNOs.  (The FCC does require interconnection among wireless  networks, i.e., "roaming," at commercially reasonable rates.)  Indeed, some of the commentary around a potential Sprint-T-Mobile merger is that wholesale rates should be regulated in the future because those two are big suppliers to MVNOs.  For example, here's one argument that Sprint and T-Mobile should not be permitted to merge without a new wholesale pricing regulatory regime being put in place:  https://globenewswire.com/news-release/2018/05/21/1509213/0/en/Founder-and-Former-CEO-of-Boost-Mobile-USA-Raises-Concerns-that-Prepaid-Customers-are-Being-Forgotten-in-Sprint-T-Mobile-Merger-Plan.html

If you are aware of any source discussing the regulation of wholesale rates charged by MNOs to MVNOs, I'd be very interested to see it.

The requirement is under Title II of the Communications Act which requires incubmbent carriers to provide wholesale access at cost based rates to new entrants.  Historically this applied to voice and there were questions as to whether that covered data.  In 2015 when the FCC applied Net Neutrality they did so with a broad brush by having internet/data governed by Title II (which incorporates a huge amount of potential gov't control well beyond Net Neutrality - gov't can regulate access, price, investment, etc).  While the FCC now is seeking to reverse the Net Neutrality requirements there's a question of whether that is going to be specific to Net Neutrality or if they are entirely exempting internet/data from Title II regulation.

As John Malone has said repeatedly, you want to own your network or you are at the mercy of the people who do.  There have been very, very few MVNO's in the US that have been successful over the long term.

As recently as last month in Flat Wireless v. Cellco Partnership, FCC 18-117 (August 2, 2018), the FCC reiterated its position that the "cost-based" rate regime that applies to certain Title II services does not apply to wireless voice and data roaming.  See paragraphs 15-16 of the Flat Wireless order available here:  https://docs.fcc.gov/public/attachments/FCC-18-117A1.pdf  Instead, where the obligation applies, the standard is "commercial reasonableness."  So, while the FCC could impose cost-based rate regulation of wireless voice and data under Title II, it has not yet done so.

I have not been able to find any source discussing whether pure MVNOs, i.e., entities that do not themselves operate any facilities-based service, are even entitled to the "commercial reasonableness" standard that applies to MNOs under the FCC's Data Roaming Order.  So, I'm back where I started:  In situations where there is no contract between the parties, does a pure MVNO have any legal basis for forcing an MNO to provide it access? 



Title: Re: CHTR - Charter Communications
Post by: dwy000 on September 19, 2018, 11:29:56 AM
Sure I'm not arguing the Charter has a sweet deal right now being able to rent telecom assets at regulated prices while having sole ownership of its fiber assets, but a.) if charter has too much sucess with this approach (which is not a guarantee as how many people switch to mvnos actually even among us investors who know they have the same assets), it's a relatively easy case for telecoms to argue that they should have free access to fiber at regulated prices.  That being said the more important argument is that while Charter likely has an advantage now, the long term and structural advantage goes to whoever develops wireless broadband.

Where are you getting this information?  Charter does not rent telecom assets under regulated prices...  its MVNO deal was privately negotiated as part of a sale of spectrum in 2011.

Right that's correct I forgot about this case, However,  I think by law though telecoms have to rent the telecom assets to mvnos at a price that if can't be negotiated will be set by government, but this is slightly different.  My point here though is the government is basically forcing telecoms to rent to charter and other mvnos and that could be problematic when charter gets to successful in the mobile space.

I'm not aware of any obligation in the United States to provide network access to an MNVO, nor any regulation of the wholesale rates negotiated between mobile network operators and MVNOs.  (The FCC does require interconnection among wireless  networks, i.e., "roaming," at commercially reasonable rates.)  Indeed, some of the commentary around a potential Sprint-T-Mobile merger is that wholesale rates should be regulated in the future because those two are big suppliers to MVNOs.  For example, here's one argument that Sprint and T-Mobile should not be permitted to merge without a new wholesale pricing regulatory regime being put in place:  https://globenewswire.com/news-release/2018/05/21/1509213/0/en/Founder-and-Former-CEO-of-Boost-Mobile-USA-Raises-Concerns-that-Prepaid-Customers-are-Being-Forgotten-in-Sprint-T-Mobile-Merger-Plan.html

If you are aware of any source discussing the regulation of wholesale rates charged by MNOs to MVNOs, I'd be very interested to see it.

The requirement is under Title II of the Communications Act which requires incubmbent carriers to provide wholesale access at cost based rates to new entrants.  Historically this applied to voice and there were questions as to whether that covered data.  In 2015 when the FCC applied Net Neutrality they did so with a broad brush by having internet/data governed by Title II (which incorporates a huge amount of potential gov't control well beyond Net Neutrality - gov't can regulate access, price, investment, etc).  While the FCC now is seeking to reverse the Net Neutrality requirements there's a question of whether that is going to be specific to Net Neutrality or if they are entirely exempting internet/data from Title II regulation.

As John Malone has said repeatedly, you want to own your network or you are at the mercy of the people who do.  There have been very, very few MVNO's in the US that have been successful over the long term.

As recently as last month in Flat Wireless v. Cellco Partnership, FCC 18-117 (August 2, 2018), the FCC reiterated its position that the "cost-based" rate regime that applies to certain Title II services does not apply to wireless voice and data roaming.  See paragraphs 15-16 of the Flat Wireless order available here:  https://docs.fcc.gov/public/attachments/FCC-18-117A1.pdf  Instead, where the obligation applies, the standard is "commercial reasonableness."  So, while the FCC could impose cost-based rate regulation of wireless voice and data under Title II, it has not yet done so.

I have not been able to find any source discussing whether pure MVNOs, i.e., entities that do not themselves operate any facilities-based service, are even entitled to the "commercial reasonableness" standard that applies to MNOs under the FCC's Data Roaming Order.  So, I'm back where I started:  In situations where there is no contract between the parties, does a pure MVNO have any legal basis for forcing an MNO to provide it access?
The response is quite nuanced.  It's also entirely a discussion of price and not access.  Access is required by Title II and Flat is just arguing price.  The FCC has stated that they have preferred to stay out of price discussion and basically act as arbiter if a carrier is gouging.  But it is not a question of whether Flat has access rights.  They do.  They just don't like the price.
Title: Re: CHTR - Charter Communications
Post by: KJP on September 19, 2018, 11:40:59 AM
Sure I'm not arguing the Charter has a sweet deal right now being able to rent telecom assets at regulated prices while having sole ownership of its fiber assets, but a.) if charter has too much sucess with this approach (which is not a guarantee as how many people switch to mvnos actually even among us investors who know they have the same assets), it's a relatively easy case for telecoms to argue that they should have free access to fiber at regulated prices.  That being said the more important argument is that while Charter likely has an advantage now, the long term and structural advantage goes to whoever develops wireless broadband.

Where are you getting this information?  Charter does not rent telecom assets under regulated prices...  its MVNO deal was privately negotiated as part of a sale of spectrum in 2011.

Right that's correct I forgot about this case, However,  I think by law though telecoms have to rent the telecom assets to mvnos at a price that if can't be negotiated will be set by government, but this is slightly different.  My point here though is the government is basically forcing telecoms to rent to charter and other mvnos and that could be problematic when charter gets to successful in the mobile space.

I'm not aware of any obligation in the United States to provide network access to an MNVO, nor any regulation of the wholesale rates negotiated between mobile network operators and MVNOs.  (The FCC does require interconnection among wireless  networks, i.e., "roaming," at commercially reasonable rates.)  Indeed, some of the commentary around a potential Sprint-T-Mobile merger is that wholesale rates should be regulated in the future because those two are big suppliers to MVNOs.  For example, here's one argument that Sprint and T-Mobile should not be permitted to merge without a new wholesale pricing regulatory regime being put in place:  https://globenewswire.com/news-release/2018/05/21/1509213/0/en/Founder-and-Former-CEO-of-Boost-Mobile-USA-Raises-Concerns-that-Prepaid-Customers-are-Being-Forgotten-in-Sprint-T-Mobile-Merger-Plan.html

If you are aware of any source discussing the regulation of wholesale rates charged by MNOs to MVNOs, I'd be very interested to see it.

The requirement is under Title II of the Communications Act which requires incubmbent carriers to provide wholesale access at cost based rates to new entrants.  Historically this applied to voice and there were questions as to whether that covered data.  In 2015 when the FCC applied Net Neutrality they did so with a broad brush by having internet/data governed by Title II (which incorporates a huge amount of potential gov't control well beyond Net Neutrality - gov't can regulate access, price, investment, etc).  While the FCC now is seeking to reverse the Net Neutrality requirements there's a question of whether that is going to be specific to Net Neutrality or if they are entirely exempting internet/data from Title II regulation.

As John Malone has said repeatedly, you want to own your network or you are at the mercy of the people who do.  There have been very, very few MVNO's in the US that have been successful over the long term.

As recently as last month in Flat Wireless v. Cellco Partnership, FCC 18-117 (August 2, 2018), the FCC reiterated its position that the "cost-based" rate regime that applies to certain Title II services does not apply to wireless voice and data roaming.  See paragraphs 15-16 of the Flat Wireless order available here:  https://docs.fcc.gov/public/attachments/FCC-18-117A1.pdf  Instead, where the obligation applies, the standard is "commercial reasonableness."  So, while the FCC could impose cost-based rate regulation of wireless voice and data under Title II, it has not yet done so.

I have not been able to find any source discussing whether pure MVNOs, i.e., entities that do not themselves operate any facilities-based service, are even entitled to the "commercial reasonableness" standard that applies to MNOs under the FCC's Data Roaming Order.  So, I'm back where I started:  In situations where there is no contract between the parties, does a pure MVNO have any legal basis for forcing an MNO to provide it access?
The response is quite nuanced.  It's also entirely a discussion of price and not access.  Access is required by Title II and Flat is just arguing price.  The FCC has stated that they have preferred to stay out of price discussion and basically act as arbiter if a carrier is gouging.  But it is not a question of whether Flat has access rights.  They do.  They just don't like the price.

I agree that Flat is about price, because Flat is a facilities-based provider so clearly has a right of access at some price.  Under the FCC's data roaming rule, however, " [a] facilities-based provider of commercial mobile data services is required to offer roaming arrangements to other such providers on commercially reasonable terms and conditions[]"  40 CFR 20.12(e)(1) (emphasis added).  "Other such providers" appears to refer to other "facilities-based providers," not pure MVNOs.  That's why I've been asking solely about the obligation to provide access to MVNOs, i.e., non-facilities-based providers, and have found no source addressing the issue.

EDIT:  I just reviewed the Data Roaming Rule itself.  I think it answers my question by limiting the access obligation to true roaming, not resale.  See paragraph 38 & n.116.  Based on that, why do MVNOs have a right of access?
Title: Re: CHTR - Charter Communications
Post by: dwy000 on September 19, 2018, 12:02:58 PM
Sure I'm not arguing the Charter has a sweet deal right now being able to rent telecom assets at regulated prices while having sole ownership of its fiber assets, but a.) if charter has too much sucess with this approach (which is not a guarantee as how many people switch to mvnos actually even among us investors who know they have the same assets), it's a relatively easy case for telecoms to argue that they should have free access to fiber at regulated prices.  That being said the more important argument is that while Charter likely has an advantage now, the long term and structural advantage goes to whoever develops wireless broadband.

Where are you getting this information?  Charter does not rent telecom assets under regulated prices...  its MVNO deal was privately negotiated as part of a sale of spectrum in 2011.

Right that's correct I forgot about this case, However,  I think by law though telecoms have to rent the telecom assets to mvnos at a price that if can't be negotiated will be set by government, but this is slightly different.  My point here though is the government is basically forcing telecoms to rent to charter and other mvnos and that could be problematic when charter gets to successful in the mobile space.

I'm not aware of any obligation in the United States to provide network access to an MNVO, nor any regulation of the wholesale rates negotiated between mobile network operators and MVNOs.  (The FCC does require interconnection among wireless  networks, i.e., "roaming," at commercially reasonable rates.)  Indeed, some of the commentary around a potential Sprint-T-Mobile merger is that wholesale rates should be regulated in the future because those two are big suppliers to MVNOs.  For example, here's one argument that Sprint and T-Mobile should not be permitted to merge without a new wholesale pricing regulatory regime being put in place:  https://globenewswire.com/news-release/2018/05/21/1509213/0/en/Founder-and-Former-CEO-of-Boost-Mobile-USA-Raises-Concerns-that-Prepaid-Customers-are-Being-Forgotten-in-Sprint-T-Mobile-Merger-Plan.html

If you are aware of any source discussing the regulation of wholesale rates charged by MNOs to MVNOs, I'd be very interested to see it.

The requirement is under Title II of the Communications Act which requires incubmbent carriers to provide wholesale access at cost based rates to new entrants.  Historically this applied to voice and there were questions as to whether that covered data.  In 2015 when the FCC applied Net Neutrality they did so with a broad brush by having internet/data governed by Title II (which incorporates a huge amount of potential gov't control well beyond Net Neutrality - gov't can regulate access, price, investment, etc).  While the FCC now is seeking to reverse the Net Neutrality requirements there's a question of whether that is going to be specific to Net Neutrality or if they are entirely exempting internet/data from Title II regulation.

As John Malone has said repeatedly, you want to own your network or you are at the mercy of the people who do.  There have been very, very few MVNO's in the US that have been successful over the long term.

As recently as last month in Flat Wireless v. Cellco Partnership, FCC 18-117 (August 2, 2018), the FCC reiterated its position that the "cost-based" rate regime that applies to certain Title II services does not apply to wireless voice and data roaming.  See paragraphs 15-16 of the Flat Wireless order available here:  https://docs.fcc.gov/public/attachments/FCC-18-117A1.pdf  Instead, where the obligation applies, the standard is "commercial reasonableness."  So, while the FCC could impose cost-based rate regulation of wireless voice and data under Title II, it has not yet done so.

I have not been able to find any source discussing whether pure MVNOs, i.e., entities that do not themselves operate any facilities-based service, are even entitled to the "commercial reasonableness" standard that applies to MNOs under the FCC's Data Roaming Order.  So, I'm back where I started:  In situations where there is no contract between the parties, does a pure MVNO have any legal basis for forcing an MNO to provide it access?
The response is quite nuanced.  It's also entirely a discussion of price and not access.  Access is required by Title II and Flat is just arguing price.  The FCC has stated that they have preferred to stay out of price discussion and basically act as arbiter if a carrier is gouging.  But it is not a question of whether Flat has access rights.  They do.  They just don't like the price.

I agree that Flat is about price, because Flat is a facilities-based provider so clearly has a right of access at some price.  Under the FCC's data roaming rule, however, " [a] facilities-based provider of commercial mobile data services is required to offer roaming arrangements to other such providers on commercially reasonable terms and conditions[]"  40 CFR 20.12(e)(1) (emphasis added).  "Other such providers" appears to refer to other "facilities-based providers," not pure MVNOs.  That's why I've been asking solely about the obligation to provide access to MVNOs, i.e., non-facilities-based providers, and have found no source addressing the issue.

My guess is that Comcast and Charter would argue that their fiber based and broad Wi-Fi platform would constitute a facilities based provider.  Especially since this refers to data and not voice. 

The more interesting question is whether Verizon is entitled to access Charter and Comcast's last mile/last foot fiber network.  By including internet access under Title II back in 2015 it gives FCC ability to require and enforce access and price.  They specifically said they had no intention to but we all know government promises.  Interestingly, the amount of network investment by overbuilders like Google Fiber ground to a quick halt after that.  Who's going to invest billions in a network that they may have to share with competitors (exactly like Verizon has to with their wireless network).
Title: Re: CHTR - Charter Communications
Post by: KJP on September 19, 2018, 12:20:26 PM
Sure I'm not arguing the Charter has a sweet deal right now being able to rent telecom assets at regulated prices while having sole ownership of its fiber assets, but a.) if charter has too much sucess with this approach (which is not a guarantee as how many people switch to mvnos actually even among us investors who know they have the same assets), it's a relatively easy case for telecoms to argue that they should have free access to fiber at regulated prices.  That being said the more important argument is that while Charter likely has an advantage now, the long term and structural advantage goes to whoever develops wireless broadband.

Where are you getting this information?  Charter does not rent telecom assets under regulated prices...  its MVNO deal was privately negotiated as part of a sale of spectrum in 2011.

Right that's correct I forgot about this case, However,  I think by law though telecoms have to rent the telecom assets to mvnos at a price that if can't be negotiated will be set by government, but this is slightly different.  My point here though is the government is basically forcing telecoms to rent to charter and other mvnos and that could be problematic when charter gets to successful in the mobile space.

I'm not aware of any obligation in the United States to provide network access to an MNVO, nor any regulation of the wholesale rates negotiated between mobile network operators and MVNOs.  (The FCC does require interconnection among wireless  networks, i.e., "roaming," at commercially reasonable rates.)  Indeed, some of the commentary around a potential Sprint-T-Mobile merger is that wholesale rates should be regulated in the future because those two are big suppliers to MVNOs.  For example, here's one argument that Sprint and T-Mobile should not be permitted to merge without a new wholesale pricing regulatory regime being put in place:  https://globenewswire.com/news-release/2018/05/21/1509213/0/en/Founder-and-Former-CEO-of-Boost-Mobile-USA-Raises-Concerns-that-Prepaid-Customers-are-Being-Forgotten-in-Sprint-T-Mobile-Merger-Plan.html

If you are aware of any source discussing the regulation of wholesale rates charged by MNOs to MVNOs, I'd be very interested to see it.

The requirement is under Title II of the Communications Act which requires incubmbent carriers to provide wholesale access at cost based rates to new entrants.  Historically this applied to voice and there were questions as to whether that covered data.  In 2015 when the FCC applied Net Neutrality they did so with a broad brush by having internet/data governed by Title II (which incorporates a huge amount of potential gov't control well beyond Net Neutrality - gov't can regulate access, price, investment, etc).  While the FCC now is seeking to reverse the Net Neutrality requirements there's a question of whether that is going to be specific to Net Neutrality or if they are entirely exempting internet/data from Title II regulation.

As John Malone has said repeatedly, you want to own your network or you are at the mercy of the people who do.  There have been very, very few MVNO's in the US that have been successful over the long term.

As recently as last month in Flat Wireless v. Cellco Partnership, FCC 18-117 (August 2, 2018), the FCC reiterated its position that the "cost-based" rate regime that applies to certain Title II services does not apply to wireless voice and data roaming.  See paragraphs 15-16 of the Flat Wireless order available here:  https://docs.fcc.gov/public/attachments/FCC-18-117A1.pdf  Instead, where the obligation applies, the standard is "commercial reasonableness."  So, while the FCC could impose cost-based rate regulation of wireless voice and data under Title II, it has not yet done so.

I have not been able to find any source discussing whether pure MVNOs, i.e., entities that do not themselves operate any facilities-based service, are even entitled to the "commercial reasonableness" standard that applies to MNOs under the FCC's Data Roaming Order.  So, I'm back where I started:  In situations where there is no contract between the parties, does a pure MVNO have any legal basis for forcing an MNO to provide it access?
The response is quite nuanced.  It's also entirely a discussion of price and not access.  Access is required by Title II and Flat is just arguing price.  The FCC has stated that they have preferred to stay out of price discussion and basically act as arbiter if a carrier is gouging.  But it is not a question of whether Flat has access rights.  They do.  They just don't like the price.

I agree that Flat is about price, because Flat is a facilities-based provider so clearly has a right of access at some price.  Under the FCC's data roaming rule, however, " [a] facilities-based provider of commercial mobile data services is required to offer roaming arrangements to other such providers on commercially reasonable terms and conditions[]"  40 CFR 20.12(e)(1) (emphasis added).  "Other such providers" appears to refer to other "facilities-based providers," not pure MVNOs.  That's why I've been asking solely about the obligation to provide access to MVNOs, i.e., non-facilities-based providers, and have found no source addressing the issue.

My guess is that Comcast and Charter would argue that their fiber based and broad Wi-Fi platform would constitute a facilities based provider.  Especially since this refers to data and not voice. 

The more interesting question is whether Verizon is entitled to access Charter and Comcast's last mile/last foot fiber network.  By including internet access under Title II back in 2015 it gives FCC ability to require and enforce access and price.  They specifically said they had no intention to but we all know government promises.  Interestingly, the amount of network investment by overbuilders like Google Fiber ground to a quick halt after that.  Who's going to invest billions in a network that they may have to share with competitors (exactly like Verizon has to with their wireless network).

Under current law, I don't think Comcast and Charter would have a right of access to Verizon's wireless network because the Data Roaming Rule states: "It is reasonable for a provider to condition the effectiveness of a data roaming arrangement on the requesting provider’s provision of mobile data service to its own subscribers using a generation of wireless technology comparable to the technology on which the requesting provider seeks to roam."  [Paragraph 44 of the Second Report and Order issuing the Data Roaming Rule]

As for what the law will be in the future .... good question.  I don't think any "connectivity" company can like the buzz surrounding an argument that an access obligation should be imposed on Amazon.
Title: Re: CHTR - Charter Communications
Post by: cameronfen on September 19, 2018, 07:04:25 PM
Sure I'm not arguing the Charter has a sweet deal right now being able to rent telecom assets at regulated prices while having sole ownership of its fiber assets, but a.) if charter has too much sucess with this approach (which is not a guarantee as how many people switch to mvnos actually even among us investors who know they have the same assets), it's a relatively easy case for telecoms to argue that they should have free access to fiber at regulated prices.  That being said the more important argument is that while Charter likely has an advantage now, the long term and structural advantage goes to whoever develops wireless broadband.

Where are you getting this information?  Charter does not rent telecom assets under regulated prices...  its MVNO deal was privately negotiated as part of a sale of spectrum in 2011.

Right that's correct I forgot about this case, However,  I think by law though telecoms have to rent the telecom assets to mvnos at a price that if can't be negotiated will be set by government, but this is slightly different.  My point here though is the government is basically forcing telecoms to rent to charter and other mvnos and that could be problematic when charter gets to successful in the mobile space.

I'm not aware of any obligation in the United States to provide network access to an MNVO, nor any regulation of the wholesale rates negotiated between mobile network operators and MVNOs.  (The FCC does require interconnection among wireless  networks, i.e., "roaming," at commercially reasonable rates.)  Indeed, some of the commentary around a potential Sprint-T-Mobile merger is that wholesale rates should be regulated in the future because those two are big suppliers to MVNOs.  For example, here's one argument that Sprint and T-Mobile should not be permitted to merge without a new wholesale pricing regulatory regime being put in place:  https://globenewswire.com/news-release/2018/05/21/1509213/0/en/Founder-and-Former-CEO-of-Boost-Mobile-USA-Raises-Concerns-that-Prepaid-Customers-are-Being-Forgotten-in-Sprint-T-Mobile-Merger-Plan.html

If you are aware of any source discussing the regulation of wholesale rates charged by MNOs to MVNOs, I'd be very interested to see it.

The requirement is under Title II of the Communications Act which requires incubmbent carriers to provide wholesale access at cost based rates to new entrants.  Historically this applied to voice and there were questions as to whether that covered data.  In 2015 when the FCC applied Net Neutrality they did so with a broad brush by having internet/data governed by Title II (which incorporates a huge amount of potential gov't control well beyond Net Neutrality - gov't can regulate access, price, investment, etc).  While the FCC now is seeking to reverse the Net Neutrality requirements there's a question of whether that is going to be specific to Net Neutrality or if they are entirely exempting internet/data from Title II regulation.

As John Malone has said repeatedly, you want to own your network or you are at the mercy of the people who do.  There have been very, very few MVNO's in the US that have been successful over the long term.

As recently as last month in Flat Wireless v. Cellco Partnership, FCC 18-117 (August 2, 2018), the FCC reiterated its position that the "cost-based" rate regime that applies to certain Title II services does not apply to wireless voice and data roaming.  See paragraphs 15-16 of the Flat Wireless order available here:  https://docs.fcc.gov/public/attachments/FCC-18-117A1.pdf  Instead, where the obligation applies, the standard is "commercial reasonableness."  So, while the FCC could impose cost-based rate regulation of wireless voice and data under Title II, it has not yet done so.

I have not been able to find any source discussing whether pure MVNOs, i.e., entities that do not themselves operate any facilities-based service, are even entitled to the "commercial reasonableness" standard that applies to MNOs under the FCC's Data Roaming Order.  So, I'm back where I started:  In situations where there is no contract between the parties, does a pure MVNO have any legal basis for forcing an MNO to provide it access?
The response is quite nuanced.  It's also entirely a discussion of price and not access.  Access is required by Title II and Flat is just arguing price.  The FCC has stated that they have preferred to stay out of price discussion and basically act as arbiter if a carrier is gouging.  But it is not a question of whether Flat has access rights.  They do.  They just don't like the price.

I agree that Flat is about price, because Flat is a facilities-based provider so clearly has a right of access at some price.  Under the FCC's data roaming rule, however, " [a] facilities-based provider of commercial mobile data services is required to offer roaming arrangements to other such providers on commercially reasonable terms and conditions[]"  40 CFR 20.12(e)(1) (emphasis added).  "Other such providers" appears to refer to other "facilities-based providers," not pure MVNOs.  That's why I've been asking solely about the obligation to provide access to MVNOs, i.e., non-facilities-based providers, and have found no source addressing the issue.

My guess is that Comcast and Charter would argue that their fiber based and broad Wi-Fi platform would constitute a facilities based provider.  Especially since this refers to data and not voice. 

The more interesting question is whether Verizon is entitled to access Charter and Comcast's last mile/last foot fiber network.  By including internet access under Title II back in 2015 it gives FCC ability to require and enforce access and price.  They specifically said they had no intention to but we all know government promises.  Interestingly, the amount of network investment by overbuilders like Google Fiber ground to a quick halt after that.  Who's going to invest billions in a network that they may have to share with competitors (exactly like Verizon has to with their wireless network).

Under current law, I don't think Comcast and Charter would have a right of access to Verizon's wireless network because the Data Roaming Rule states: "It is reasonable for a provider to condition the effectiveness of a data roaming arrangement on the requesting provider’s provision of mobile data service to its own subscribers using a generation of wireless technology comparable to the technology on which the requesting provider seeks to roam."  [Paragraph 44 of the Second Report and Order issuing the Data Roaming Rule]

As for what the law will be in the future .... good question.  I don't think any "connectivity" company can like the buzz surrounding an argument that an access obligation should be imposed on Amazon.

The discussion is much deeper in research than I have done, but even if there is not a law written out it has been implicit that if telecoms dont let mvnos use the network the government will force telecoms to rent out the network.  If you have two firms, the total economic profit of the two competing firms is less than the economic profit of the monopolist as competition gives some surplus to consumers.  The consequence is a telecom makes more profit being a monopolist and not renting out, rather than charging rent that an mvno would pay and face the competition.  So whether it is a de jure regulation or not, it is certainly a de facto one because if telecoms do not comply the government will force them to rent. 
Title: Re: CHTR - Charter Communications
Post by: Spekulatius on September 20, 2018, 04:21:49 AM
There is no Monopoly in wireless. Typically MVNO exist, because it is cost effective for a wireless network provider to rent out his network and increase the utilization. That is also where constraints come in - the customers of MVNO can get throttled if network constraints become an issue. MVNO cust9mers typically get throttled befor the native network customers get throttled. That’s something I learned in Howardsforums.
Title: Re: CHTR - Charter Communications
Post by: walkie518 on September 20, 2018, 07:02:57 AM
There is no Monopoly in wireless. Typically MVNO exist, because it is cost effective for a wireless network provider to rent out his network and increase the utilization. That is also where constraints come in - the customers of MVNO can get throttled if network constraints become an issue. MVNO cust9mers typically get throttled befor the native network customers get throttled. That’s something I learned in Howardsforums.
On throttling, this makes sense.

I had a call with a smb spectrum sales person recently.  He noted that businesses will get access to wireless product in Q1.  He also noted that residential customers have unlimited everything while being wireless.  However, it's unclear what happens when you start roaming. 

Charter is likely aiming to trap a spread over whatever they have to pay Verizon for usage?  Anyone have experience with the new product?