Charter Communications updated investors today during its 1Q22 earnings call and offered some insight on the impact of the Rural Digital Opportunity Fund (RDOF) program on the operator.
Charter was the largest RDOF auction winner, measured by number of locations. The cable MSO won $1.22 billion to bring service to over one million locations in 24 states. Charter sees RDOF activity as one of the main drivers of its broadband strategy.
“Our rural construction initiative is also progressing as planned and we’ve started to work in all 24 of the states where we won Rural Digital Opportunity Fund bids,” said Charter CEO Tom Rutledge on today’s earnings call. “Through RDOF we’ll add over a hundred thousand miles of new network infrastructure to our approximately eight hundred thousand existing miles over the next five or so years.”
Rutledge noted that the strategy goes beyond just RDOF funded areas. “Our construction is not limited to RDOF commitments. We continue to build in other rural areas and are pursuing opportunities to receive other broadband stimulus funds,” he said.
It’s early in the game for Charter’s RDOF initiative, but the company is beginning to see financial implications. RDOF activity is generating expenses but is not material to rural subscriber growth yet.
As Telecompetitor has been reporting, Charter is active in RDOF construction projects already.
The company spent $1.9 billion in CAPEX during 1Q22, with $232 million of that CAPEX attributed to rural network construction.
“Most of that [rural] spend relates to design, walk-out, and make ready and as expected has not yet resulted in significant passings growth,” said Charter CFO Jessica Fischer on the call. “The vast majority of that spend is accounted for in line extension.”
Charter RDOF Revenue
Charter has begun capturing actual RDOF revenue as well, which should continue at $9 million per month for the next ten years.
“We did start booking RDOF revenue in Q1, so they’re two months in for the total of $19 million,” said Fischer. “The run rate on the RDOF booking will be at that, so it gets booked in over the ten year period…just over $9 million a month, from now until ten years from now.”
Charter is also exploring other rural broadband funding programs, executives noted on the call, including the upcoming $42.5 billion BEAD program, administered by NTIA as a part of the $65 billion allocated towards broadband from the Infrastructure Investment and Jobs Act legislation.
2 thoughts on “Charter Updates RDOF Progress, Shares Financial Impact”
Why can’t Charter Spectrum be more specific with their RDOF commitment. On there website it says my address will likely be included but it may take several years.
We had a truck out this past September, in our area, surveying for Charter. Advised they were starting within six weeks to a couple of months. Have not heard a peep since. No advertising plans. No foundation being laid to run it here. Did the project just stop? There is just no real time update or projected timing.