Subs Sinking Faster at Charter

Different Metrics

Of course, it may be immaterial whether Charter lost 41,300 subscribers or something more like 52,400. On the company's second-quarter conference call, CEO Carl Vogel emphasized that the company was focusing on achieving returns on invested capital, "not unit growth for the sake of unit growth," according to the CCBN and FDCH e-Media transcript.

But analysts pay close attention to basic subscriber numbers and other unit counts anyway, as a measure of cable systems' operational health and ability to fight off competition from direct broadcast satellite operators.

In an Aug. 1 note, for example, UBS analyst Aryeh Bourkoff wrote, "Although the 2Q03 basic subscriber loss of 41,300 was higher than our expectation of a 30,400 decline, the 2Q03 decline compared favorably to the loss of 50,600 basic subs in 1Q03."

Muddling the sub-count issue further, says the short-seller, is that when he signed up for data-only service at his vacation home, which happens to be in Charter's service territory, he found out he would be paying 50 cents a month more for broadband-only service than he would be paying if he got broadband plus a token level of video service. The Charter spokeswoman said pricing packages varied throughout Charter's operations, but the customer's story was plausible.

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