Spectrum, which is operated by Charter Communications (CHTR) , is suffering from an alarming shift in customer behavior, despite its recent effort to reverse the trend.
In the company’s first-quarter earnings report for 2025, it revealed that Spectrum faced a 1.8% year-over-year increase in internet revenue during the quarter, mainly due to “promotional rate step-ups” and “rate adjustments.”
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However, the increase in internet revenue was offset by Spectrum losing 60,000 internet customers during the quarter, which is more than analysts were expecting.
Related: Spectrum customers are unexpectedly ditching a major service
Spectrum pinpoints sources of the problem
During an earnings call on April 25, the company revealed that about 9,000 of the internet customers it lost were due to the January wildfires in California.
Charter Communications CEO Chris Winfrey said during the call that Spectrum also saw a slight increase in internet service disconnects due to nonpayment. He said that this was due to “the lack of ACP.”
The Affordable Connectivity Program (ACP) was a government program that provided eligible households a discount of up to $30 a month for internet service. It was discontinued in February 2024.
Spectrum will focus on offering the best value to customers.
Angus Mordant/Bloomberg via Getty Images
Winfrey noted that “customers are rightfully tightening their wallet” amid recession concerns. He also flagged that the housing market has a significant impact on broadband industry growth.
“The housing climate is a little bit unknown right now, and that’ll have an impact,” said Winfrey. “But even that, you know, tends to be temporary in nature.”
Currently, home prices in the U.S. remain high, and the housing turnover rate remains the lowest it’s been in 30 years, with the average 30-year mortgage rate remaining above 6%.
In order to attract and retain customers amid macroeconomic uncertainty, Spectrum will be focused on presenting value and advertising bundled services to customers going forward.
“We can present value to customers and stickiness through having the best products at the best prices,” said Winfrey. “You know, advertising and telling customers you can save them hundreds or even thousands of dollars on converged broadband and mobile services is a great way.”
Spectrum customers are sick of price hikes
Spectrum’s loss in internet customers comes after it raised its monthly internet prices by $3 to $4, depending on the plan, in July last year.
To lessen the blow of the price hike, Spectrum later rolled out “a new and simplified pricing strategy” in September. This strategy offers customers internet for a starting price of $30 a month when bundled with mobile or video services. Pricing plans for internet services are also guaranteed for up to three years.
Related: Comcast raises red flag about unexpected customer behavior
Despite unveiling this offer, Spectrum customers have recently taken to social media to flag that their internet bills keep increasing. Some have even threatened to cancel their service due to the hike in rates.
In general, many consumers across the nation are seeing higher costs for internet service as they face inflation and higher costs of living, which is pushing them to make harsh decisions.
According to a new survey from CNET, 63% of U.S. adults saw the monthly price of their home internet service increase last year. On average, they paid $195 more for internet service in 2024 than they did in 2023.
Despite paying higher prices for internet, 51% of the respondents in the survey said they still experienced unreliable connectivity. These price hikes even pushed one in five U.S. adults to either downgrade their service, switch internet providers, or cancel their service altogether.
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In order to escape high internet prices, many consumers are switching to fixed wireless internet. This service provides high-speed internet connection using radio signals instead of cables.
It can provide internet access to remote or underserved areas where internet through cable is not available. Fixed wireless internet is also usually cheaper than traditional internet services.
Companies such as Verizon, AT&T, and T-Mobile all offer fixed wireless internet, which poses a major threat to Spectrum.
Comcast, one of Spectrum’s main competitors, even flagged during an earnings call last week that it is facing “intense” competition from fixed wireless internet providers.
“I would tell you that the newer competitor in the last few years has obviously been fixed wireless,” said Comcast Chief Financial Officer Jason Armstrong during the call. “They’re adding 1,000,000 subscribers per quarter, so that’s sort of the competitive intensity that we’re seeing that’s sort of incremental. We are competing aggressively with it.”
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