Spectrum, which is owned by Charter Communications (CHTR) , revealed that it is making some serious adjustments to its business after its customers continue to cut the cord on internet services following a series of price hikes.
In Charter’s second-quarter earnings report for 2024, it revealed that Spectrum lost about 149,000 internet customers during the quarter, and it put a major dent in its earnings.
Related: Spectrum customers show company the consequences of hiked prices
During a recent earnings call, which discussed the report, the company mostly blamed the significant loss on the end of the Affordable Connectivity Program (ACP), which was discontinued in February. ACP was a government program that Spectrum offered which provided eligible households a discount of up to $30 a month for internet.
“We estimate that the end of the program’s impact on our second-quarter internet gross additions and churn drove over 100,000 of our $149,000 internet losses in the quarter,” said Charter Communications Chief Financial Officer Jessica Fischer during the call. “And from a financial perspective, there was an approximately $30 million headwind to second-quarter revenue from onetime non-recurring ACP related items in the quarter.”
Spectrum customers blast company for price hikes
Over the past few months, many customers have even complained about Spectrum hiking its prices for internet services. The most recent price increase was in July, when Spectrum hiked its internet prices by $3 to $4, depending on the plan.
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Spectrum rolls out major changes to attract and retain customers
After facing backlash and a mass loss of customers, the company revealed that it is rolling out “a new and simplified pricing strategy” and “price guarantees,” which is all part of its new “Customer Commitment,” according to a new press release.
Spectrum is now offering internet for a starting price of $30 a month, with speeds that begin at 500 Mbps, when bundled with mobile or video services. Pricing plans for internet services will also be guaranteed for up to three years.
The company is also automatically increasing internet speeds for Spectrum Internet and Spectrum Internet Ultra customers to 400 and 600 Mbps, respectively, for free.
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It is also promising to be more committed to resolving service disruptions quickly. Spectrum claims that if a service outage lasts for more than two hours, customers will be offered a credit for the full day. Also, if a customer is not satisfied with the service they are receiving within the first 30 days, they will receive a refund.
“If we are charging for a service, it should work all the time; if it doesn’t, our customers should trust that we’ll make it right,” said Charter Executive Vice President of Customer Operations Cliff Hagan in the press release. “By focusing on reliability, transparency, and outstanding service, we want to exceed expectations, build lasting loyalty, and address our customers’ needs with renewed energy and focus on keeping them seamlessly connected.
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