Spectrum suffers major loss as customers pull the plug on service

Spectrum, which is operated by Charter Communications (CHTR) , is struggling to shake a growing consumer trend that is harming its business, and it is shifting gears to fix the problem.

In Charter’s second-quarter earnings report for 2025, it revealed that Spectrum lost about 117,000 internet customers during the quarter, which is almost 6% higher than the number of internet customers it lost during the same time period last year.

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The steeper customer loss follows Spectrum’s decision to raise its monthly internet prices by $3 to $4, depending on the plan, in July last year, frustrating customers. It also warned customers last month that monthly rates for a few of its internet plans would increase by $2, a change that went into effect a few weeks ago.

Spectrum’s recent internet price increases mirror a growing trend in the telecom industry. According to a recent 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 in 2023.

Spectrum lost about 117,000 internet customers during the last quarter.

Image source: Mordant/Bloomberg via Getty Images

Charter CEO addresses the elephant in the room: end of key discount

During an earnings call on July 25, Charter CEO Chris Winfrey emphasized the company is operating in a “competitive” environment.

He also said that the number of Spectrum customers who have had their service cut off due to non-payment has increased year-over-year, partially due to the end of the Affordable Connectivity Program (ACP). This was a government program that provided eligible households a discount of up to $30 a month for internet service. It was discontinued in February last year.

“The reason that non-pay has stepped up year-over-year is because twofold,” said Winfrey. “One is you have former ACP customers who are economically challenged and have a higher non-pay rate systemically, without the benefit of the subsidy from a year-over-year standpoint. But in addition to that, from a year-over-year standpoint, you have newly acquired customers who would have qualified for the ACP. We don’t have ACP today, and therefore, they have a higher non-pay rate than they would otherwise.”

He also said that Spectrum doesn’t have a “pricing issue” due to the value it offers customers.

“So if you think about the short term and the top of the funnel for internet specifically, we don’t have a product or pricing issue,” said Winfrey. “We have the fastest speeds. We have the most reliable product, best WiFi, selling, particularly in bundle, $30 500 megabit per second internet, $40 gig. So it’s not a product or pricing issue at the top of the funnel. It’s the broader market that I talked about, some brand new competition.”

Spectrum faces growing competition, impacting customer numbers

Spectrum has recently faced heightened competition from Verizon, AT&T, and T-Mobile, which all offer fixed wireless internet. This service provides internet access to remote or underserved areas at a price that’s usually lower than traditional internet services, which is why so many price-conscious consumers are switching to it.

Comcast, one of Spectrum’s main competitors, even flagged during an earnings call in April that it is seeing “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.”

A recent survey from Cord Cutters News revealed that only 40.2% of consumers rely on cable TV companies for their internet service, a significant decline from 45% in late 2024. Also, roughly 11% rely on 5G home internet, an increase from 8.4% just a year ago.

Spectrum rolls out a new plan to win back customers

To help combat this growing trend, Spectrum will focus on sharpening its value pitch to customers, clarifying through its marketing, time of sale and retention efforts how much money they can save by bundling their phone and internet services.

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“When you think about what is on your bill with T-Mobile or Verizon 5G home internet, the reality is, it’s dramatically more expensive than what you would pay to Spectrum for an internet mobile product,” said Winfrey.

He also said that Spectrum will upgrade its video packages (especially after it also lost 80,000 cable customers during the second quarter) to have more $100 worth of programmer apps, such as Max, Disney+, Hulu, Peacock, etc., at no additional cost to customers, which it hopes will help it retain internet customers.

“That’s gonna be the stickiest product,” said Winfrey. “It’s gonna be the best for customers and for programmers, us, and it’s gonna be the best for our broadband churn as well.”