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Charter's (CHTR) Slow Internet Customer Growth Impacts Prospects

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Charter Communications (CHTR - Free Report) shares have lost 48.8% in the year-to-date period compared with the Zacks Cable Television industry’s decline of 37.8%.

CHTR experienced slow top-line growth in the third quarter of 2022. It reported revenues of $13.55 billion, which increased 3.1% on a year-over-year basis.

Growth slowed down due to lower new activation of Internet users. CHTR had 30.33 million Internet customers in the third quarter of 2022, up 1.4% year over year.

Also, CHTR video customers declined by 3.8% from the year-ago period in the third quarter, with the market being mostly saturated. The space is dominated by big streaming service providers like Netflix (NFLX - Free Report) and Amazon Prime Video, which are heightening the competition for Charter Communications to grab a decent market share.

Netflix has been spending aggressively on building its original content portfolio, and the company is still enjoying its leading position in the streaming industry. It is the most prominent competitor of CHTR in the video-streaming space.

However, to boost its customer growth Charter Communications which currently carries Zacks Rank #3 (Hold), is strategically investing $5 billion in constructing a fiber-optic network buildout. This will help in providing broadband access to approximately 1 million customer locations across 24 states in the coming years. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Charter Communications Expanding Operations in Rural Areas to Boost Prospects

Charter Communications recently launched Spectrum Internet, Mobile, TV and Voice services for more than 1,300 homes and small businesses in parts of Columbia and Sauk Counties.

This new construction is part of Spectrum’s strategy to boost user growth from Spectrum’s array of services in rural areas. The company is investing nearly $5 billion, including more than $1 billion won in the Federal Communications Commission’s RDOF auction.

The recent expansion of its broadband, Internet and mobile services follows the company’s expansion of its broadband and Internet services offerings in Loudon County, TN, Wexford County, MI and Northwoods regions of Arbor Vitae, Woodruff, Three Lakes and the Town of Piehl, WI.

Additionally, Spectrum is delivering its TV services across Wisconsin with more than 200 HD channels and access to 85,000 on-demand movies and shows. Viewers can stream content across other platforms like Kindle Fire, Samsung Smart TVs and Apple’s (AAPL - Free Report) Apple TV+ and Spectrum Originals using the Spectrum TV App.

Apple TV+ recently broke records with 52 Emmy Award nominations across 13 titles and boosted its total number of Emmy Award nominations by more than 40% year over year in under three years since its global launch.

CHTR has collaborated with Comcast (CMCSA - Free Report) to develop and offer a new streaming platform on various branded 4K streaming devices and smart TVs.

The joint venture will provide CHTR with Comcast’s Flex and hardware, helping it attract new customers to counter competition.

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