Spectrum introduces new pricing and internet speeds, strives to improve service provision.

• Spectrum, the brand of Charter Communications, is introducing new pricing and customer service updates to demonstrate its dedication to dependability.
• As cable providers undergo significant changes in their broadband, TV, and mobile businesses, they are facing major shifts.
• The cable industry's bedrock, broadband, has seen a decline in customer growth, while the mobile business has experienced rapid expansion.

Chris Winfrey, CEO, stated that customers should associate reliability and credibility with their cable and broadband provider.

The cable giant will reveal a set of changes on Monday aimed at enhancing its goal, including introducing new packages and pricing, boosting internet speeds, providing compensation for service interruptions, and guaranteeing improved customer service.

Spectrum, a company that offers broadband, cable TV, and mobile services, is striving to become more approachable and eliminate the negative connotations associated with cable companies by introducing its new "first-of-its-kind customer commitment," called "Life Unlimited."

As Charter and its competitors face challenges such as declining broadband customer growth, decreasing cable TV subscriptions, and a rapidly expanding mobile market, the rollout is taking place.

"Winfrey stated in an interview with CNBC that being loved is difficult when you offer a critical household service that costs over $100 per month. She added that if there is an issue, someone must enter your home, just like an electrician or plumber."

To alter a negative consumer perception, the initial step is to offer "pricing and packaging that provides more worth than any other competitor in the marketplace," as stated.

Spectrum announced that it will offer 500Mbps internet for $30 a month when bundled with two mobile lines or cable TV, or 1GB service for $40 a month. Additionally, the company is increasing the baseline internet speed for current customers at no extra cost.

Spectrum's pricing will now be transparent, with taxes and fees included, no annual contracts, and pricing guaranteed for up to three years, Charter announced. Additionally, Charter has removed the 99 cents surcharge that was previously added to most Spectrum pricing.

Spectrum committed to providing customers with automatic credits for internet outages that are beyond their control or when the company fails to meet its customer service promises.

This week, Spectrum's Life Unlimited platform, which offers internet, mobile, and TV services, will be launched across its 41-state footprint.

"Winfrey stated that our goal was to make a strong declaration about our dedication and our potential, while also acknowledging that we are not flawless and are putting ourselves under intense pressure to continually improve as a service provider."

Pricing power

Since Winfrey became CEO of Charter in December 2022, the company has made significant changes.

At the time, Winfrey was CFO and spearheaded the mergers that made Tom Rutledge, who held the post for a decade, the second-largest cable company in the U.S. through the takeovers of Time Warner Cable and Bright House Networks in 2016.

Winfrey recounted the numerous developments and investments made by cable companies, including broadband, pay TV bundles, and landline and mobile phone businesses.

Despite the industry's contributions and our service and reliability investments, we haven't always received the recognition we deserved, and in some cases, we received credit because we could have done things better, according to Winfrey.

He took up the top position at a time when it was evident that the return of growth to the cable TV package was unlikely.

Winfrey was a little-known executive in the media industry, but he quickly gained attention with his bold approach.

In December 2022, Charter unveiled a bold capital investment plan to spend $5.5 billion over three years on its broadband infrastructure network. However, the unexpectedly high spending amidst growing competition from 5G wireless providers caused concern on Wall Street, leading to a drop in the stock price.

In recent years, Charter's stock price has experienced significant fluctuations. On Sept. 12, 2021, the stock price was $787.12. It closed at $340.17 on Friday.

Despite earnings reports indicating slow growth in broadband customer growth at providers such as Charter and Comcast, increased competition from wireless companies like T-Mobile and Verizon, as well as the slowdown in the housing market due to high interest rates, have contributed to the stagnation.

According to MoffettNathanson, the third quarter was the worst ever for broadband industry subscriber losses. Charter lost 149,000 subscribers and had a total of 30.4 million residential and small business broadband customers as of June 30, according to its second-quarter earnings report.

Although the losses were not as severe as predicted, Charter's standout growth area is its mobile business, which was launched in 2018. Spectrum Mobile currently has 8.8 million lines and has experienced rapid growth due to attractive promotional deals and increased mobile usage on dependable Wi-Fi networks, the company stated.

In late 2022, Charter unveiled its "Spectrum One" plan, which bundled broadband, Wi-Fi, and mobile services at competitive rates, with some promotions even offering free mobile lines.

""The 'Spectrum One' promotion for wireless is predicted to be a success, according to analyst Craig Moffett, despite initial skepticism about its aggressiveness," stated Moffett in a July research note."

Charter's mobile service is considered a "growth engine" by Moffett, not just due to customer acquisition but also due to the increase in average revenue per user, or ARPU, which is commonly used by cable companies.

Winfrey doesn't expect ARPU to be affected by the new promotions.

"Winfrey stated that when she thinks about Wall Street, she thinks about the customer. She emphasized that if businesses prioritize customer satisfaction, offer excellent customer service, save money, and provide value, their capital market and regulatory strategies will naturally fall into place."

Tough on TV

Despite a decline in pay TV subscriptions among all providers, including Charter, the company has been actively working to maintain its business, with Winfrey leading the charge.

In 2023, the biggest moment for Charter's customers occurred when -owned networks went dark. Winfrey also declared the pay TV ecosystem "broken" and advocated for a revamped deal with Disney.

This blackout fight between Disney and DirecTV was unique due to the era of streaming.

The sticking point for Charter wasn't just the fees; the company desired Disney's ad-supported streaming options to be included in its TV package.

Programming companies such as Disney often argue that the rates requested by pay TV providers are too high, as they also distribute a significant amount of their content through streaming platforms. Despite the decline in cable subscriptions, cable providers still consider it a profitable venture, while streaming services continue to strive for profitability.

"Disney eventually agreed to take a leading role in the industry, as Winfrey stated. ESPN is considered the key component of the cable TV package, she added."

Customers who purchase "Spectrum TV Select" packages will have access to ad-supported Disney+ and ESPN+, with ESPN's direct-to-consumer streaming option becoming available in fall 2025.

Jimmy Pitaro, ESPN Chairman, praised Charter for their specific ideas and clear vision during their negotiation with DirecTV.

Based on the subscription tier, customers can receive ad-supported versions of Disney+, ESPN+, Max, Discovery+, Paramount+, AMC+, BET+, and/or Televisa Univision's Vix.

Additionally, the deals have enabled Charter to offer and advertise streaming services to its broadband-only clients, as well as a revenue-sharing arrangement.

Early renewals are not common in the industry where carriage negotiations often occur at the last minute.

Last year, Charter launched its own streaming devices, called Xumo, in partnership with Comcast. These devices eliminate the need for a cable box and allow users to access both their cable TV and streaming apps in a single platform.

Winfrey stated that despite the obstacles, Charter aims to provide all ad-supported streaming apps owned by major programmers in the cable TV bundle by the first half of 2025.

Despite being part of the roster, NBCUniversal's Peacock is not included. A Charter representative stated that the company does not discuss renewals and declined to provide any further comment.

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.