Charter plots 3-year upgrade to deploy DOCSIS 4.0 by 2025

With a new CEO at the helm, Charter Communications unveiled an ambitious plan to overhaul its network over the next three years, aiming to offer download speeds of 5 Gbps across the vast majority of footprint and top tier speeds of 10 Gbps by 2025. Notably, it is hoping to do so at a $100 cost per passing.

Rich DiGeronimo, Charter’s president of Product and Technology, explained during an investor day event that the upgrades will be completed in three phases and eventually touch its entire footprint of 55 million passings.

The first phase will see Charter implement high-split architecture to increase its usable spectrum to 1.2 GHz across 15% of its footprint. This change, which began in four mid-sized markets this year and will continue through 2023, will enable speeds of 2 Gbps downstream and 1 Gbps upstream. Phase 2 will begin in early 2024 and will see Charter continue its high-split upgrades but modify its approach to roll out distributed access architecture (DAA) using Remote PHY. This phase will cover another 50% of its footprint and will allow the operator to boost downstream speeds to 5 Gbps.

Charter will move into Phase 3 in late 2024, deploying extended spectrum DOCSIS 4.0 (ESD) in the remaining 35% of its footprint to enable download speeds of up to 10 Gbps. Between all the cable upgrades, DiGeronimo said Charter expects to be able to offer 5/1 Gbps speeds to 85% of its footprint by the end of 2025. He added the operator also plans to offer a fiber-on-demand product which will be capable of delivering symmetrical speeds of 25 Gbps or more to customers who want it.

While fiber competitors are deploying new infrastructure at a cost of between $500 and $1500 per passing, DiGeronimo said Charter will be able to get into multi-gig territory for around $100 per home, though unlike fiber its offering will be asymmetrical. That puts the total cost of its upgrade plan at $5.5 billion.

According to DiGeronimo, the $100 figure factors in module swaps, the use of in-house labor for the upgrades and the assumption that Charter can purchase all the 1.8 GHz kit it will need for the DOCSIS 4.0 rollout for the same cost as the 1.2 GHz components it buys.

DiGeronimo acknowledged the latter is an “aggressive target” but added “this is a large scale deployment that’s going to be done over three years, so this is going to be very lucrative for those vendors that choose to partner with us.”

Charter’s plans is notably different from that of fellow cable giant Comcast, which is planning to deploy full duplex (FDX) DOCSIS 4.0 starting in the second half of 2023 and deliver symmetrical multi-gig services to 56 million locations by the end of 2025 at a less than $200 cost per passing.

Expansion and competition

In addition to upgrading the network, Charter is also looking to expand it through a combination of grant-fueled builds, line extensions and edge outs. It is already working to reach 1 million new locations with money from the Rural Digital Opportunity Fund (RDOF) and has won state-level grants for another 160,000 passings. CFO Jessica Fischer said it has pending grant applications for another 300,000 passings. And that’s doesn't account for the project awards it could win through the $42.5 billion Broadband Equity, Access and Deployment (BEAD) Program.

Beyond rural-focused work, CEO Chris Winfrey said there is also plenty of opportunity for Charter to ramp greenfield builds and fill in its existing footprint.

Winfrey noted Charter is also looking to bolster its Spectrum packaging with improved wireless and Wi-Fi services. The operator has previously said it might roll out its own cell sites using CBRS spectrum, but executives added on the call it is also exploring potential partnerships with Comcast and other operators which would allow its mobile customers to connect to their Wi-Fi networks.

Putting it all together, Winfrey argued Charter's suite of enhanced services - delivered through its $50 per month fixed-mobile Spectrum One bundle - will be hard to compete with.

“Our largest competitors, they have wireless marketed nationwide but the reality is they don’t have a wireline footprint or a sufficient wireline footprint to be able to marry it up and provide that converged product,” Winfrey said. “Take AT&T. Big national wireless operator, but their wireline coverage is what, maybe 40%, of which a third maybe is upgraded. So, they don’t have a path to a ubiquitously converged product today, [and] as far as I can see they don’t have a path to that in the future.”

“Even if they could, remember 70% roughly of their revenue is tied to mobile at very high prices. So, it’s very difficult for them to follow where we go,” he concluded, adding many other fiber players don’t have a wireless service at all.