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Charter preps TiVo launch, trials customer service initiatives

Tue, 05/03/2011 - 8:20am
Mike Robuck

Charter Communications CEO and President Mike Lovett outlined several key initiatives this morning as the nation's fourth-largest cable operator reported a net loss of $110 million for the first quarter.

Charter said its net loss was impacted by a $67 million non-cash loss on extinguishment of debt in 2011 and a nonrecurring tax benefit of $69 million in the first quarter of 2010. Charter reported a profit of $24 million in the same quarter a year ago. Charter's first-quarter revenue grew by 2 percent to $1.77 billion year-over-year.

"We have a solid platform for growth, and our strategies are focused on a few key areas. One is we're leveraging our new speed advantage to create new relationships," Lovett said. "Two, continuing to deploy strategic bandwidth initiatives and developing next-generation services to enhance our video product, and three, investing in our commercial platform to capture additional market opportunity.

"The foundation of our success, and what we believe will truly differentiate us from our competitors, is delivering a quality customer experience."

On the customer service front, Lovett said Charter is piloting its "Customer Onboarding," which was designed to give subscribers a better experience "from order to install to bill and beyond."

"In this pilot area, we've seen reductions in trouble calls, truck rolls [and] billing repair calls post installation," Lovett said. "We continue to focus on first contact resolution and have made meaningful improvements on that front. And now we are preparing to roll out various identify process improvements across the footprint.

"These efforts, combined with greater service reliability, product enhancements and increases in value, have resulted in significantly higher satisfaction scores by our new customers."

Lovett said that while Charter was in the initial stages of its customer experience transformation, its customers and financial results would benefit over the long term. Lovett said Charter's goal was to be "the home entertainment and communications solution provider for our customers."

Charter is undergoing its customer service and service transformation after several top executives, including CTO Marwan Fawaz, left the company earlier this year, and with what Lovett described as a "cultural shift."

Charter has its DOCSIS 3.0 service rolled out to 70 percent of its footprint, and switched digital video has freed up bandwidth in 64 percent of the company's systems, allowing Charter to offer more HD and on-demand programming.

At the start of the year, Charter announced that it had signed on to use TiVo's Premiere DVR set-top boxes as it works to implement its next-generation TV strategy.

"Our work with TiVo is progressing, and we're preparing to deploy the service in select markets this year," Lovett said. "I really believe next-gen TV will be a game-changer for us, and we look forward to delving an enhanced experience to our customers."

Charter lost 25,100 basic video subscribers in the quarter but added 28,400 digital video customers. Charter's video segment posted a 1.9 decrease in revenue. Digital penetration reached 75 percent, with 54 percent of the company's digital customers taking HD and/or DVR services.

Charter's data subscribers grew by 87,900 subscribers in the quarter, while revenue rose 4.3 percent.

First-quarter 2011 net gains of phone customers were approximately 24,000, with phone penetration at 16 percent as of March 31. Phone revenue rose by 7 percent, while commercial services increased its revenue 16 percent.

Total average monthly revenue per basic video customer (ARPU) for the quarter increased 8.2 percent year-over-year to $131.01, driven by an increase in bundle and advanced video service penetration, along with growth in our commercial business.

Going forward, Lovett said Charter had "a significant opportunity to create new customer relationships in the 7 million currently unserved homes that our network passes."

Separate from its earnings call, Charter also announced this morning that it would offer $1 billion in unsecured notes due in 2012.

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