Profile: Charter Communications Inc (CHTR.OQ)
20 Dec 2013
Charter Communications, Inc. (Charter) provides cable services in the United States, offering a range of entertainment, information and communications solutions to residential and commercial customers. Its infrastructure consists of a hybrid fiber coaxial cable plant passing approximately 12 million homes, with 98% of homes passed at 550 megahertz or greater and 98% of plant miles two-way active. A national Internet protocol (IP) infrastructure interconnects Charter markets. During the year ended December 31, 2011, it generated 50% revenue from its residential video service. During 2011, it also generated revenue from Internet, telephone service and advertising. As of December 31, 2011, it served approximately 5.2 million residential and commercial customers. It sells its video, Internet and telephone services on a subscription basis, often in a bundle of two or more services, providing savings and convenience to its customers. Bundled services are available to approximately 97% of its homes passed, and approximately 62% of its customers subscribe to a bundle of services. As of December 31, 2011, it served approximately 4.1 million residential video customers, and approximately 79% of its video customers subscribed to digital video service. Digital video enables its customers to access advanced video services, such as high definition (HD) television, Charter OnDemand (OnDemand) video programming, an interactive program guide and digital video recorder (DVR) service. As of December 31, 2011, it also served approximately 3.5 million residential Internet customers. In May 2013, Liberty Media Corp acquired a 27.38% stake in Charter Communications Inc. In July 2013, Charter Communications Inc and Cablevision Systems Corp announced the completion of acquisition of Cablevision's Bresnan Broadband Holdings, LLC (Optimum West).
The Company’s Internet service is available in a range of download speeds up to 100 megabits per second and upload speeds of up to five megabits per second. It also offers home networking service, or in-home wireless fidelity (Wi-Fi), enabling its customers to connect up to five computers wirelessly in the home. As of December 31, 2011, it provided telephone service to approximately 1.8 million residential customers. Its telephone services include unlimited local and long distance calling to the United States, Canada and Puerto Rico, plus other features, including voicemail, call waiting and caller ID. Through Charter Business, it provides scalable, tailored broadband communications solutions to business and carrier organizations, such as Internet access, data networking, fiber connectivity to cellular towers and office buildings, video entertainment services and business telephone services. As of December 31, 2011, it served approximately 476,200 commercial primary service units, small- and medium-sized commercial customers. Its advertising sales division, Charter Media, provides local, regional and national businesses to advertise in individual markets on cable television networks.
Charter owns 100% of Charter Communications Holding Company, LLC (Charter Holdco). Charter Holdco, through its subsidiaries, owns cable systems. Charter controls the affairs of Charter Holdco and its limited liability company subsidiaries. In addition, Charter provides management services to Charter Holdco and its subsidiaries under a management services agreement. As indicated in the organizational chart above, its interim holding company debt issuers indirectly own the subsidiaries, which own or operate all of its cable systems.
During 2011, residential video services represented approximately 50% of the Company’s total revenues. Its video service offerings include Basic and Digital Video, Premium Channels, OnDemand, Subscription OnDemand, Pay-Per-View, High Definition Television, Digital Video Recorder and Online. Its video customers receive a package of basic programming which consists of local broadcast television, local community programming, including governmental and public access, and limited satellite-delivered or non-broadcast channels, such as weather, shopping and religious programming. Its digital video services include a digital set-top box, an interactive electronic programming guide with parental controls, an expanded menu of pay-per-view channels, including OnDemand, music channels and the option to also receive a cable card. In addition to video programming, digital video service enables customers to receive its advanced video services such, as DVRs and HD television.
These channels provide original programming, commercial-free movies, sports, and other special event entertainment programming. It offers subscriptions to premium channels on an individual basis. It offers premium channels combined with its advanced video services. Customers who purchase premium channels also have access to that programming OnDemand and over the Internet. Charter offers premium sports content and access to a range of cable programmers, such as HBO, Cinemax, EPIX and Turner on an authenticated basis over the Internet on charter.net.
OnDemand service allows customers to select from hundreds of movies and other programming at any time. OnDemand includes HD and three dimensional (3D) content. OnDemand programming options may be accessed for a fee or, in some cases, for no additional charge. It also offers subscription OnDemand for a monthly fee or included in a digital tier premium channel subscription. Pay-per-view channels allow customers to pay on a per event basis to view a single showing of a recently released movie, a one-time special sporting event, music concert, or similar event on a commercial-free basis.
DVR service enables customers to digitally record programming and to pause and rewind live programming. Multi-room DVR service permits customers to access and watch any of their video recordings on any other connected television in the customer's home. Charter customers also have the ability to program their DVR's remotely through a Website. Online video offers its customers the ability to watch traditional TV content over the Internet from any Internet connection in the United States once they are authenticated as a Charter customer. During 2011, Charter added content from HBO Go, Max Go, BTN2Go (Big Ten Network) and from Turner networks to its Online offerings. It also offers a free search and discovery tool, which organizes video content available online through Charter.net, such as HBO Go and EPIX with online content from sites, such as Netflix, Amazon and Hulu into a single online directory.
During 2011, residential Internet services represented approximately 24% of the Company's total revenues. During 2011, it completed the roll out of data over cable service interface specification 3.0 (DOCSIS 3.0) to 93% of its homes passed, allowing it to offer several tiers of Internet services with speeds up to 100 megabytes per second download to its residential customers. Its Internet services also include its Internet portal, Charter.net, which provides multiple e-mail addresses, as well as range of content and media from local, national and international providers including entertainment, games, news and sports. It also offers home networking gateways to its Internet customers permitting its customers to wirelessly connect up to five devices within a home. During 2011, Charter launched its Cloud Drive product, which provides for on-line storage and back up of customer files and permits customers to access such files remotely at anytime.
During 2011, residential telephone services represented approximately 12% of the Company’s total revenues. It provides voice communications services using voice over Internet protocol (VoIP) technology to transmit digital voice signals over its systems. Charter Telephone includes unlimited nationwide and in-state calling, voicemail, call waiting, caller ID, call forwarding and other features. Charter Telephone also provides international calling either by the minute or in a package of 250 minutes per month. During 2011, commercial services represented approximately 8% of its total revenues. Commercial services offered through Charter Business, include scalable broadband communications solutions for businesses and carrier organizations of all sizes, such as Internet access, data networking, fiber connectivity to cellular towers and office buildings, video entertainment services and business telephone services. Charter offers small businesses services similar to its residential offerings, including a range of video programming tiers and music services, coax Internet speeds up to 100 megabits per second downstream and up to five megabits per second upstream in its DOCSIS 3.0 markets, a set of business cloud services, including Web hosting, e-mail and security, and multi-line telephone services, including Web-based service management.
Charter’s medium sized business products includes fiber Internet with symmetrical speeds of up to one gigabits per second and voice trunking services, such as primary rate interface (PRI) and Session Initiation Protocol (SIP) Trunks, which provide voice services delivered through fiber optic connection. Charter also offers Metro Ethernet service, which connects two or more locations for commercial customers with geographically dispersed locations with speeds up to 10 gigabits per second. Metro Ethernet service can also extend the reach of the customer's local area network (LAN) within and between metropolitan areas. Charter offers businesses with multiple sites specialized solutions, such as custom fiber networks, Metro and long haul Ethernet, PRI and SIP Trunk services. Charter offers last-mile to wireless and wireline telephone providers, Internet service providers and competitive carriers on a wholesale basis.
Sale of Advertising
During 2011, sales of advertising represented approximately 4% of the Company’s total revenues. It receives revenues from the sale of local advertising on satellite-delivered networks, such as MTV, CNN and ESPN. In any particular market, it inserts local advertising on up to 40 channels. It also provides cross-channel advertising to programmers. In addition, it sells advertising on its Internet portal, Charter.net. In some markets, it sells advertising on behalf of other operators. Charter has deployed Enhanced TV Binary Interchange Format (EBIF) technology to set top boxes in select service areas within the Charter footprint.
The Company competes with AT&T Inc., Verizon Communications, Inc. and Century Link.
Charter Communications Inc
10th Floor, 400 Atlantic Street
STAMFORD CT 06901
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