Charter Has Weathered Subsidy Losses Well Thus Far but Still Has a Ways to Go

We generally like Charter’s efforts to drive customer penetration by limiting price increases, improving customer service, and expanding its offerings to appeal to a variety of preferences. However, we aren’t enamored with the extremely heavy discount on broadband and wireless services it offers. We believe this type of promotion tends to attract disloyal customers while also diminishing the value of these services in consumers’ minds. Charter's heavy exposure to the Affordable Connectivity Program, a federal broadband subsidy, may also impair growth in 2024. Still, we believe the firm is positioned to remain a dominant broadband provider and produce stable cash flow.