Charter Communications Has What It Takes To Weather The Covid-19 Recession

Summary

• These consumers have opted for streaming services like Netflix, Amazon, and others. Services like YouTube TV and Hulu offer live TV options that seem to be similar to a cable.
• Many people have since contacted their ISPs to upgrade their internet speeds. While they may be canceling their Cable TV subscription in favor of the less expensive streaming services, they.
• Many people may want to observe how the company's mobile division fares from the pandemic into the recession before considering any changes.

Businesses across the world are yet to recover from the COVID-19 induced recession. This is despite the fact that so many economies have long opened up for business. Every industry was hit hard. This includes the cable industry experienced an increase in the number of households that cut the cord and a drop in new accounts.

Yet within the cable industry, Spectrum's parent company, Charter Communications, is standing firm. The company was also hit like others, no doubt. The pandemic took its toll on it like on others. So some areas of the company may not do well. But some other areas are now experiencing an upsurge in activities with the country adjusting to its new reality.

Despite business activities being affected by the pandemic, as one of the country’s largest cable TV and cable internet providers, it is expected to fare much better than the majority of its competitors.

So, which areas of the company are expected to fare well and which might not?

Spectrum Cable TV

It's already been mentioned that there has been a lot of cord-cutting by people looking to save on cable TV subscriptions. These consumers have opted for streaming services like Netflix, Amazon, and others. Services like YouTube TV and Hulu offer live TV options that seem to be similar to a cable experience. Still, the channels they offer are minimal compared what is available with one of the Spectrum TV Packages. Netflix hasn't yet caught on to this ability to help consumers enjoy network television.

The major challenge that consumers switching from cable TV to streaming platforms are experiencing is that they most often have to subscribe to several streaming services to get access to all the shows and movies they want to watch. The costs can sometimes add up to that cable TV. Still, several cable TV consumers are cutting the cord.

In this regard, Charter Communications is seeing a decrease in the number of new subscriptions, as well as current ones, even though the Spectrum channel lineup is very extensive. This will only worsen as people make frantic efforts to save their money. Cord-cutting is a big minus for cable TV, and Charter Communications is looking for a way out, but it is a big plus for cable internet. Consumers need the faster internet to binge-watch Netflix originals.

Spectrum Cable Internet

Right from the start of the pandemic, Spectrum cable internet has been experiencing an increase in internet speed. This in internet speeds is due, partly, to the fact that so many people started working from home, some were either laid off or furloughed, and there have also been some been those who canceled their cable TV subscriptions in favor of streaming services. Spectrum Internet packages' speed and pricing have since become attractive to many of those working from home.

Many people have since contacted their ISPs to upgrade their internet speeds. While they may be canceling their Cable TV subscription in favor of the less expensive streaming services, they require high-speed internet to enjoy their streaming experience. Even more, this is the case where there is more than one person streaming at the same time. They need high-speed internets to enjoy their favorite movies and shows.

The chances are that the upgrades internet will continue resulting in the company's cable internet sector's growth. The decrease in cable TV subscriptions may also continue and add to that growth. Yet, there are predictions by analysts that new internet subscriptions may not be feasible because the/ country is headed for a recession that experts say may be worse than that of the Great Recession of 2008/2009. The reasoning is that consumers who didn't have a Wifi in their homes before the recession are unlikely to get one during the recession.

The prediction for the company's cable internet sector is that there will be a decrease in the number of new subscribers but an increase in upgrades. While the recession may bring a different experience, both the decreased new subscriptions and increased spending will eventually cancel each other.

Business Services

With so many businesses closing across the country, the commercial market seems to have been a major sufferer of the pandemic's effects. This may become worse during the recession. The businesses that will be most likely to be hit by the downturn are small and medium scale companies, some of which survived the pandemic. About 14% of Charter's TV revenues come from business services, and small and medium-sized companies make up 60% of that number.

Speculations are that Charter will lose a significant portion of the revenues it derives from business services in the coming months, but no one can tell to what extent.

Mobile Services

No one can accurately tell the outcome of the recession's impact on Charter's mobile bottom line. While Charter Spectrum is a relatively new entrant into the mobile market, it has had a sizable amount of new mobile consumers because of its budget-friendly mobile services. The result is that it has also become relevant in the mobile market.

Yet, at the moment, not very many people are looking to switch mobile providers or upgrade their devices. Many people may want to observe how the company's mobile division fares from the pandemic into the recession before considering any changes.

Going against big players in that sector like AT&T and Verizon isn't going to be easy. Still, a possible outcome is that many consumers may decide to switch from the larger companies to low-cost mobile plans which Charter offers. This, anyway, is a speculation, and only time will tell.

Overall

Charter is going to experience ups and downs across different areas of its business, going from the pandemic into the recession. There will be areas of success and areas of failure, and they'll cancel themselves out. In a healthy market, this wouldn't be considered a win. Still, in the current reality, it will make Charter Communications emerge as one of the most successful cable providers. Several analysts have predicted that Charter will last beyond both the pandemic and recession and will probably experience an upsurge in earnings through 2021 and beyond.