- Charter’s CEO thinks AI could reduce its annual $8B service cost in 12-18 months
- He made no mention of company layoffs in the Q3 call
- Unlike Comcast, Charter might raise broadband prices in 2026
It’s safe to say most operators are now using some sort of AI for internal use cases. As for Charter, CEO Chris Winfrey predicts AI integrations could bring down its $8 billion annual service cost in the next year or so.
Speaking on Friday’s third quarter earnings call, he touted how Charter’s already employing AI in all things customer service, from real-time call transcription to “conversational prompting” for AI agents. He also envisions AI as a useful tool for the company’s back-office employees and software developers.
“The benefits are still probably 12 to 18 months away, but we believe the impact can be real and material,” Winfrey said.
What he didn’t talk about was the impact to Charter’s headcount. The operator in 2024 laid off more than 1,000 call center workers and reportedly plans to cut another 1,200 corporate and back-office jobs.
Exactly how much of those layoffs are due to AI is unclear. According to New Street Research, the job cuts could potentially bring Charter close to $100 million in annual savings, assuming affected employees had an average salary of $80,000 per year.
Nevertheless, Winfrey assured shareholders what Charter is doing with AI is designed to give employees higher-quality work.
“The goal is first to have a better customer experience at every implementation and then to significantly lower operating cost with even higher tenured service employees because the quality of the job is enhanced,” he said.
All about ARPU
Talk of AI’s potential cost savings came as Charter recorded 109,000 broadband subscriber losses, higher than New Street’s 83,000 estimate.
The count was higher than Comcast’s, as the latter reported a decline of 104,000 broadband customers — a slight improvement after Comcast implemented a new price structure earlier this year.
Both Charter and Comcast “are operating in an environment where broadband subscriber growth remains a distant dream,” said NSR analyst Vikash Harlalka in a research note.
Given Comcast on its Q3 call said it doesn’t plan to increase broadband prices next year, investors are wondering if Charter will take a similar route, Harlalka wrote.
The answer is probably not. Winfrey pointed out Charter’s average revenue per user (ARPU) and pricing is lower than its peers and competitors. NSR data indeed shows Charter ARPU is slightly lower than that of Comcast and AT&T Fiber but higher than Frontier.
“Given this macro environment, we're not in a position to not pass through cost increases as they occur,” Winfrey added.