Charter Starting Rebranding, Spectrum Guide Rollout to TWC, BHN

The rebranding of Time Warner Cable and Bright House Networks into Charter Communications will begin this fall, as the company over the next year reconciles various packages and pricing, and over the next two-plus years standardizes its business processes, said Charter CEO Tom Rutledge Tuesday. He spoke in the company's Q2 earnings call -- its first since Charter closed in May on its approximately $90 billion takeovers of TWC and BHN (see 1605120040). Charter's cloud-based user interface Spectrum Guide will be available in most of legacy Charter's footprint by year's end, and will begin to be available in major TWC markets by mid-2017 and throughout the BHN and TWC footprints by sometime in 2018 as those markets also go all digital in the same time frame, Rutledge said. Today, roughly 60 percent of TWC's footprint is digital, while BHN is at 50 percent, he said.

Rutledge said many of its 7 million broadband-only customers are direct broadcast satellite subscribers -- and a potential video subscriber opportunity. He said the strategy the company followed for legacy Charter -- going all digital and creating a two-way interactive platform -- could make TWC and BHN more competitive "but it requires the proper investment in a video product." Charter stock closed Tuesday at $255.76, up 8 percent.

Skinnier bundles aren't necessarily the solution, Rutledge said. While the cost of traditional video packages can be onerous for consumers, "it is hard to sell smaller packages that resonate in the market and satisfy customers," he said. "The problem is skinnying down to the right place with the right package." Rutledge said Charter "will continue to explore relationships with content companies" to create skinny bundle offerings but there also are ways to attract customers to fully featured services.

Charter is facing affiliation litigation from Fox News Network and Univision (see 1607200065), and Rutledge downplayed the significance. "The nature of programming relationships hasn't fundamentally changed -- it's still a contentious contractual environment," he said. "The litigation is part of the negotiation process."

Asked about its plans for the Verizon mobile virtual network operator Charter picked up when it bought TWC, Rutledge said it's looking at its wireless options but hasn't exercised that MVNO right. "We are looking at what those rights are and how we will utilize them for the best benefit for the company," he said.

Rutledge said the company will spend the next several years hiring 20,000 people while it takes various operations such as call centers and field technicians in-house as it pledged it would when seeking regulatory approval of the TWC/BHN deals (see 1510140009). The company said it's building its first Spanish-language call center in Texas.

For the quarter, Charter had revenue of $9.99 billion, up from what would have been $9.37 billion the same quarter a year ago on a pro forma basis, it said in a news release. It had voice and broadband residential customer growth and a slight decline in residential video subscribers, with the declines at legacy Charter and legacy BHN down while legacy TWC's residential video net losses increased.