Jessica Fischer

Thanks, Chris. Before discussing our third quarter results, I want to mention that today’s results do not include any impact related to hurricanes Helene and Milton, which hit the Southeast in late September and early October. Our fourth quarter results will include some lost customers and passings related to the storm from both suppressed gross additions and the damaged or destroyed plant that Chris mentioned.
We’re still assessing the impacted areas, and we expect to rebuild blast passings over time as our customers rebuild. We currently expect to incur approximately $100 million in incremental capital expenditures, the vast majority of which will be captured in our rebuild capital expenditures line. We have been providing bill credits to customers in impacted areas, and those onetime credits will offset some fourth quarter revenue.
We may also have some incremental operating expense, although we expect that to be relatively small. And we’ll isolate the storm impacts when we report our fourth quarter results.
Let’s please turn to our customer results on slide 8. Including residential and SMB, we lost 110,000 Internet customers in the third quarter, while in mobile we added 545,000 lines. Video customers declined by 294,000, and wireline voice customers declined by 288,000.
The end of the ACP program drove higher third quarter nonpay and voluntary churn among former ACP customers, for a total estimated third quarter impact of approximately 200,000 Internet losses. Incremental nonpay disconnects drove more than half of those losses and the rest of the impact was primarily driven by voluntary churn, with a small impact from lower connects. We continued to do a very good job in managing the end of the program, and we’ve retained the vast majority of our customers who were previously receiving an ACP benefit.
Beyond ACP, we competed well across our footprint, but note that our third quarter Internet net additions benefited from seasonal back-to-school connects and the work stoppage at one of our competitors, while fourth quarter customer results will include impacts from the storms and about 100,000 incremental nonpay disconnects and some wagon voluntary disconnects, both related to the end of ACP. After those effects in the fourth quarter, we expect the onetime impacts from ACP to be behind us.
Turning to rural. We ended the quarter with 696,000 subsidized rural passings. We grew those passings by 114,000 in the third quarter, and by 381,000 over the last 12 months. And we had 41,000 net customer additions in our subsidized rural footprint in the quarter.
We now expect to activate close to 400,000 new subsidized rural passings in 2024, about 35% more than in 2023, but lower than our original 2024 plan of 450,000, due to shifting construction labor to rebuild activity in storm-impacted markets. We expect our subsidized rural construction activity to recover by the end of the fourth quarter, and that reacceleration of activity to put us on a higher pace in 2025 as planned. Our RDOF build should still be completed by the end of 2026, two years ahead of schedule.
Moving to third quarter revenue on slide 9. Over the last year, residential customers declined by 1.8%, while residential revenue per customer relationship grew by 1.8% year-over-year, given promotional rate step-ups, rate adjustments, the growth of Spectrum Mobile, and $63 million of residential customer credits in the prior year period, related to the temporary loss of Disney programming in September 2023.
These factors were partly offset by a higher mix of nonvideo customers, growth of lower-priced video packages within our base, and $25 million of costs allocated to programmer streaming apps, which are netted within video revenue. As slide 9 shows, in total, residential revenue grew by 0.3% year-over-year.
Turning to commercial. Total commercial revenue grew by 2% year-over-year, with SMB revenue growth of 1% year-over-year, reflecting higher monthly SMB revenue per SMB customer, primarily due to rate adjustments. Enterprise revenue grew by 3.7% year-over-year, driven by enterprise PSU growth of 5.7% year-over-year. And when excluding all wholesale revenue, enterprise revenue grew by 5.9%.
Third quarter advertising revenue grew by 18% year-over-year given political revenue growth. Excluding political, advertising revenue decreased by 6.3% year-over-year due to higher levels of inventory in the market, partly offset by higher advanced advertising revenue. Other revenue grew by 11.6% year-over-year, primarily driven by higher mobile device sales.
And in total, consolidated third quarter revenue was up 1.6% year-over-year, which is 0.6% year-over-year when excluding advertising revenue and $68 million of customer credits in the prior year period related to the temporary loss of Disney programming in September 2023.
Moving to operating expenses and adjusted EBITDA on slide 10. In the third quarter, total operating expenses grew by 0.2% year-over-year. Programming costs declined by 10% year-over-year due to a 9.5% decline in video customers year-over-year, a higher mix of lighter video packages, and costs allocated to programmer streaming apps, which are now netted within video revenue, partly offset by higher programming rates and a $61 million benefit in the prior year period related to the temporary loss of Disney programming in September 2023.
Other cost of revenue increased by 15.8%, primarily driven by higher mobile device sales and higher mobile service direct costs. Cost to service customers declined 0.5% year-over-year given productivity from our 10-year investments, including lower labor costs, partly offset by modest year-over-year growth in bad debt expense. Sales and marketing costs grew by 4.4% as we remained focused on driving customer acquisition and given our Life Unlimited brand relaunch in September.
Finally, other expense grew by 2.3%. Adjusted EBITDA grew by 3.6% year-over-year in the quarter. And when excluding advertising, EBITDA grew by 2.7% year-over-year.
Turning to net income. We generated $1.3 billion of net income attributable to Charter shareholders in the third quarter, in line with last year, as higher adjusted EBITDA was mostly offset by higher other expenses, primarily due to noncash changes in the value of financial instruments.
Turning to slide 11. Capital expenditures totaled $2.6 billion in the third quarter, down about $400 million from last year’s third quarter. Line extension spend totaled $1.1 billion, $16 million higher than last year driven by our subsidized Royal Construction initiative and continued network expansion across residential and commercial greenfield and market billing opportunities.
Third quarter capital expenditures excluding line extensions totaled $1.5 billion, which was lower than the prior year period by about $400 million. The decline was driven by core CapEx items, including CPE timing and lower than originally expected spend on network evolution, given what Chris discussed earlier with respect to our Step 2 software certification.
We now expect total 2024 capital expenditures to reach approximately $11.5 billion, down from approximately $12 billion previously. That update reflects full year 2024 line extension spend of approximately $4.3 billion, down from $4.5 billion, partly offset by slightly higher core CapEx, primarily due to the shift of some of our construction labor from rural efforts to hurricane rebuild activity.
The update also includes 2024 network evolution estimated spend of approximately $1.1 billion, down from the previous estimate of $1.6 billion. Much of that originally planned 2024 spend is being pushed into 2026 and 2027. As Chris mentioned, we will update our multiyear capital expenditures outlook when we complete our 2025 operating plan and report our fourth quarter results in January.
We now expect our total BEAD spend will be substantially less than our spend in RDOF, in each case, net of subsidies. That lower outlook reflects the most recent broadband map updates in terms of available unserved passings near our network, and a little less favorable rules framework in BEAD when compared to RDOF and state grants.
We have been in regular communication with the states in which we operate, and we are generally the largest rural builder in our states through RDOF, ARPA and other grants.
While we’re still finishing the 2025 operating plan, it’s clear 2025 capital expenditures will not exceed the range of capital spend that we outlined in January of this year, even inclusive of a small amount of initial BEAD pending. Looking beyond 2025, we expect total capital spending in dollar terms to be on a meaningful downward trajectory, even inclusive of BEAD spending.
So total capital intensity is now poised decline significantly after 2025, even including the unique onetime opportunity that subsidized rural spend and network evolution has presented us.
While we always prioritize our cash flow for organic opportunities first and then accretive M&A and buybacks. There are no organic capital expenditure opportunities on the horizon that give us concern with that capital intensity outlook.
Free cash flow in the third quarter totaled $1.6 billion, an increase of approximately $520 million compared to last year’s third quarter. The year-over-year increase was primarily driven by higher adjusted EBITDA and lower CapEx. We finished the quarter with $95.1 billion in debt principal. Our current run rate annualized cash interest is $5.0 billion.
We repurchased just under 850,000 Charter shares and Charter Holdings common units totaling $260 million at an average price of $311 per share, less than we had originally expected as we became restricted as a result of our negotiations with Liberty Broadband.
As of the end of the third quarter, our ratio of net debt to last 12-month adjusted EBITDA moved down to 4.22 times. We remain committed to our levered equity strategy and to share repurchases as a component of that strategy. Our leverage ratio may decline further given our pause in buybacks, but we look forward to resuming our program when we are able, and we have not changed our target leverage.
And with that, I will turn it over to the operator for Q&A.

Operator

(Operator Instructions) Kutgun Maral, Evercore ISI.

Kutgun Maral

Just one on broadband. Net adds in the quarter were very encouraging with a return to a quite meaningful sub growth, excluding ACP. Is there any color you can provide on the competitive backdrop and perhaps any early reads on the underlying broadband trends in the fourth quarter, excluding the incremental ACP net losses you called out?

Christopher Winfrey

Sure. A very much anticipated question. So maybe I tried to talk about the market more generally, both inside of the third quarter. What we’re — what we think about the fourth quarter and where it does or doesn’t position us for next year. But I think as you mentioned, there’s a lot of puts and takes inside the third quarter. Underlying all that is that we are competing very well in a marketplace that still has lots of competition, lots of new competition with expanded footprint.
In the third quarter, we did have some benefits that are unique to the third quarter, seasonality, which is typical. We also had a — some, not large, but some impact from — positive impact from a competitor who had a work stoppage. I think that’s well understood. And then we had obviously the downside of significant ACP primarily through nonpay disconnects and voluntary churn, but we’re managing that well.
And in the fourth quarter, when you think about the seasonality and the work stoppage benefits, we won’t have those inside the fourth quarter. We still have approximately [100,000] nonpay to deal with from ACP that we expect to see early in the quarter, in the fourth quarter. And we also have some hurricane impacts. And so that will impact subscribers, credits, as well as, Jessica mentioned, some capital and rebuild.
And so then I think the bigger question is, as you look out, where does that leave us? We’re not about managing for short term for quarters, we’re really about — thinking about the long term for the business. In 2025, there won’t be ACP and we’ll still have the continued tailwind of newly built passings, both organic as well as rural footprint.
And then I think there’s just the big questions or variables that will exist. Is lower interest rate environment, does that impact mortgages in a way that drives higher move rates? Have we seen the peak cell phone Internet impact? And it appears that that’s the case. And can we drive even higher Internet sales as well as all of the additional bundling and higher product value packaging that I described through our new pricing and packaging, and really even more so than today, start to fully realize the benefits of mobile, not just through churn, but through additional Internet acquisition rates?
And then finally, really a bogey variable one that we wouldn’t bet on, but I think is out there in terms of option values — can video — a reconstituted video, can that really provide broadband acquisition and retention support? So that’s probably much longer to look towards the tail end of next year, and beyond. But I think we’re making the right investments and doing the right things to compete.
We are still very much in atypical low churn environment when you exclude ACP. And despite that, it’s still a competitive environment for new sales. So I think if you step back, it’s too early to declare victory or even plateau, but certainly a better unit growth setup for 2024 — for 2025 than what we saw for 2024, I think, for us and probably for the rest of the cable industry.

Operator

Benjamin Swinburne, Morgan Stanley.

Benjamin Swinburne

Chris, as we look beyond cell phone Internet to fiber, not that fiber is new, but as we think about the footprint expansion within Charter’s footprint, can you talk a little bit about where that sits today, your sort of gig markets, where you see that going over the next, I don’t know, three-plus years? And kind of how you think your market share shakes out as you analyze your historical performance in fiber markets and think about sort of what’s happening in the marketplace and all the things you’re doing at Charter to compete.
And I don’t know if you’ll be able to answer this, but could you talk about why the Liberty Broadband opportunity is interesting to Charter? And if you do come to an agreement, are you able to buy back stock pre-close? Is there a way to put a mechanism in place to get back in the market? Or does that have to close before you’re able to get back in?

Christopher Winfrey

Sure. Let me start with the easy one, which is the last question you asked about Liberty Broadband. We’ve said what we can say for the time being through Liberty’s 8-K and what’s — what there is very much public. I think we’re going to have to stay quiet until there’s something more to talk about in the meantime, at which point, of course, we’ll talk through everything that you just asked, I know those are important questions. So unfortunately, just going to have to deflect those for the time being.
But if you step back to gig overlap, which includes all types of gig overlap in our footprint, it’s roughly 55% today. And where it goes, I think, depends on people’s access to capital, what happens in the M&A environment. But also, I think there are — as widely understood, is I think there’s probably some competing notions of that overlap footprint and where it may not be mutually exclusive. And as a result, I think people with a combination of scaled back investment plans, plus recognizing that they’re not going to be the ex-competitor that they thought they were going to be, may need or want to back off just because they’re not going to be able to make returns.
I’ve always thought that a wireline overbuild has very poor, if not negative, returns. And so when you start to have duplicative plans of multiple overbuilders, it really just makes it that much worse. It’s actually terrible. So I think there is a realization that that will take place. And so where it goes depends on somewhat the rational nature of our competitors and where they want to deploy capital.
In the meantime, what can we do around that is we can continue to make the type of investments that we’re making today, is make sure that we have a symmetrical multi-gig wireline network across our entire footprint, have a seamless connectivity product through convergence that none of our competitors can ubiquitously use to compete. And then add to that the ability to save customers significant amounts of money, obviously, with mobile, where we offer a tremendous advantage given our structure.
But also, in some of these rural footprints, as strange as that may sound, we offer customers the ability to save significant amounts of money with their wireline phone relative to what they pay. Now that’s not in vogue to talk about, but the reality is something I think we could use specifically in that market to drive even faster penetration in the rural footprint.
So overall, in our existing, inside of our new footprint, I think we have a great set of assets, a better and faster set of products, higher quality service because we’re 100% onshore here in the US with sales and service, primarily with our own employees who are committed to that high-quality service.
Then who knows, over time, the ability to add a unique video package that appeals to customers of all budget levels in terms of what they can afford and to deliver great value and utility inside the video package, I think, remains a big potential upside in terms of our ability to drive broadband and to compete against some of these competitors who don’t have the same network, seamless connectivity, packaging and product set and the ability to save customers money. I think we’ve got the best hand as it relates to our ability to compete in these marketplaces.
What we typically see with any new overbuild, and that’s not new, that’s — we have a lot of experience with this, it’s been going on for probably 15 years, as you see an initial uptake, it can put a few points of penetration impact at the outset when somebody comes in for the first 18, 24 months, and then the market kind of settles out.
And so when we look to historical wireline overbuilders, many of which never got to the stated penetrations that today people say are required for return, the — and that includes DSL conversion, I feel pretty good about where we can go over time, how we can compete. And the fact that at some point, the reality will be there that there’s not a great financial return for wireline overbuilds when it’s single, much less if it’s a multiple.

Operator

Jonathan Chaplin, New Street Research.

Jonathan Chaplin

Chris, I’d like to just touch on the brand repositioning. From our perspective, I think it’s a pretty profound change in the strategy, and would love to get some context for — I mean it’s probably too early, but are you starting to see any impact on gross adds or churn? Yeah. And when do you think — how long does it — do you think it sort of takes to really start to be felt in the business?
And then from the build credits that come with the commitments that you’re making, would we be expecting any impact on ARPU and costs from those? Or have you gotten your internal systems to the point where you’re happy to give the build credits because you know you’re not going to have to give any?

Christopher Winfrey

Sure. A lot in that. Okay. I appreciate that you appreciate that the brand repositioning and the commitments that we’re making are significant. I think it’s really exciting for us and where we can go.
It really comes about because we had made the significant investment in our own employees, investing in frontline tenure, which is progression and the ability for our employees to not just think about it as a job, but to have it as a career. And that gives us a higher quality craft than what you could have with contractors or offshore personnel.
But at the same time, we really had not gotten the credit, I think, in the marketplace from customer satisfaction or NPS the way that we thought that — reflected the investment that we’ve made. And so some of that comes down to doing a better job as a management team and avoiding some of the paper cuts that exist in customer service. The quality of service is there, the investment is there. This isn’t a money issue, this is a — really trying to just — around the edges, how can you do better? That’s one.
Two is making sure that we had implemented some of the softer touch for customer service and to just give customers more recognition for their tenure with us and to remind them that we’re local inside of their communities, and that these are committed employees to the company.
And three is to really stand behind our service and back it up with guarantees. Guarantees for service, and guarantees about what happens if we’re honest when we fail to meet that service level that we’ve committed to customers, and to stand behind that. And so most of that, which goes to your build credit question, isn’t going to be giving out build credits, it’s going to be reminding customers that that’s the type of quality of service that they can expect from Charter, from [Spectrum]. And to the extent that we miss, we’re going to proactively apply credit and own it, and apologize for when we don’t get it right and to do a better job.
I don’t think the bill credits – there will be some incremental impact, I don’t think it’s going to be particularly material as it relates to ARPU. But what it does is it puts a pretty significant flashlight on us internally to make sure that what are those paper cuts, where are those service misses, and it provides a real incentive internally for us to go manage that down by providing even better and higher quality of service.
So a lot of this is just making sure that we get recognized for the investments that we’ve already made, but a lot of it also is forcing ourselves to be better and to do better. And then you match that service commitment at the same time with some of the ethos that was in what I described, which is around billing transparency and having high-quality services and products, which we do have, but even simple things about rounding the pricing, instead of $0.99, to rounding it to even dollars. And to having lower promotional pricing when bundled and lower persistent pricing when bundled in a way that not only saves customers money now, and we always did over time, but even more money over time to the extent they take more product from us, is customer-friendly and competitive in the marketplace.
So I’m really excited about it. There is — it is way, way too early, your question about any early impact of that. I think it’s less about what you say and it’s more about what you do and that takes time to be recognized in the marketplace. And so I think this is something that, maybe if we’re lucky, back end of next year from just the customer commitments and service aspect, we could see the benefit of that.
This is a multiyear process. It’s not something that we’re looking to immediately. But I think the good news, as you’ve highlighted, is we’re very, very focused on our reputation in the marketplace, which impacts both customer acquisition as well as retention, and the customer life, which has a better financial outcome for our shareholders as well as just being a great operator in the local communities we serve.

Jessica Fischer

Maybe the one early item that I think is really clear that’s worth pointing out though is that the bundled strategy in what was rolled out in the new pricing and packaging is being really successful in doing the things that we hoped that it would do, which collectively should drive higher customer ARPU in terms of getting customers to take higher tiered packages, getting customers to take more products inside of those packages, and also sort of expanding the number of mobile lines that we’re seeing sort of taken per customer.
So the one piece, I think, that’s been easy to see upfront is that, that strategy around pushing value back into the bundle and utilizing that to drive higher customer ARPUs, I do think will be quite effective.

Christopher Winfrey

Yeah. It’s the old strategy that you can lower your product pricing and have higher customer ARPU, both at the time of sale as well as over time, and have longer customer lives and have lower operating costs and therefore, have better returns by doing the right thing.

Operator

Craig Moffett, MoffettNathanson.

Craig Moffett

I’m going to try to squeeze in two if I can. First, this is an interesting question that we’ve been pondering a bit that you’ve been building out FTTH networks yourselves in your edge out and expansion areas. How much of your plant today is FTTH rather than HFC? And what kind of differences do you notice competitively in places, I know a lot of those are noncompetitive markets, but what kind of differences do you see competitively when you do have fiber to compete with rather than relying on your HFC network?
And then if I could squeeze in one extra. Chris, you talked about lower participation in the BEAD program. Does that open the door perhaps to say if you can’t expand your footprint through subsidized building, there may be opportunities for small-scale M&A, sort of rural cable operators, for example, that might be attractive and could be acquired for less than the cost of building yourself in a lot of cases?

Christopher Winfrey

Sure. On the fiber-to-the-home expansion, I don’t have that number in front of me. I know when we started our rural build, we had roughly 750,000 passings — or 750,000 miles plant. I think we’re well over 900,000 today. If you think about how that’s evolved over time, at the time we were 750,000 miles plant, we were about 50-50 in terms of construction that was between HFC and FTTH and we’re now at — close to 90% of the new build that we do is fiber-to-the-home.
We do that simply because, on the increment, it’s fine to do. The reality is what we see from a competitive standpoint as well as from a service standpoint, we see absolutely no difference. In fact, in our fiber-to-the-home footprint, oddly enough, we have a slightly higher trouble call rate than we do inside of our HFC plant on a 10-year adjusted basis for customers and plant construction.
So I think that will normalize over time. Some of that’s more software-driven related to OLTs and whatnot. But my big point there is there is 0 difference to us in terms of the service quality or what we see really in competitiveness between the FTTH plant where we operate with HFC.
The HFC over time is going to have certain advantages relative to fiber. And I would start by saying that, remember that, of our HFC plant, I don’t know the exact stat, but whether it’s 99.5% or 99.8% of our HFC plant really is fiber. And it’s really at the end that it’s coax on the run, which often is the case with fiber-to-the-home, in home wiring as well.
So we’re essentially the same network, except at the end, we have the advantage of having the ability to have more telemetry because of power and the ability to hang small cells from a wireless strategy perspective in a very capillary way.
So we’re spending time on really thinking through over time, is the HFC network actually superior as a result of some of the capabilities that it will — not they’re making that claim today, but I think there are some real advantages to the plant. And today, there’s really no difference for us from what we see between one and the other. Do you want to jump in on —

Jessica Fischer

Yeah. On the lower BEAD participation and what we would do then in small-scale M&A, Craig, we always say we like cable businesses, we believe we operate them well. When there are small-scale opportunities that fit well with our footprint, we will often go after those. They’re typically so small that you sort of don’t see them and how they fold in.
But I think that we look at those opportunities the way that we look at any other opportunity and expanding our footprint in that way does make sense when it’s at the right price. I don’t necessarily foresee that if there’s a trade-off as between BEAD and doing small-scale M&A, I think we pursue both of those opportunities where they make sense and will drive returns for the company.

Christopher Winfrey

I agree.

Operator

John Hodulik, UBS.

John Hodulik

Great. And two related questions. One, actually, Jessica, you may have — you touched on. I was just wondering, are there any margin implications for the new pricing and packaging? It sounds like you’re going to — you expect to have better sell-in, which should lead to better margins. But any — when should we expect to see the sort of benefits of that, both in terms of margins and maybe changes in subscriber trends on the data side and video side?
And then, obviously, you’ve seen some nice EBITDA acceleration through the year, probably will again in the fourth quarter with political advertising. Can you point out any puts or takes as we try to get a sense for what EBITDA trends look like in 2025? Obviously, you don’t want to give guidance now. But is there anything you can point to that suggests the momentum you’ve seen through the year will continue in ’25? Thanks.

Jessica Fischer

Yeah. So starting on the margin implications for the new pricing and packaging. What we think about when we look at the success of the program is what Chris was describing in terms of how do you drive the most product value to the consumer that generates the most revenue, and then really, I guess, I think of it as sort of the most cash flow per customer, which isn’t margin as a percentage. It’s margin as an absolute dollar value.
And in that case, I think that we’re quite confident that the new pricing and packaging will be really successful in driving additional cash flow per customer because of the value that we’ve pushed into the bundles and what that means for the total margin that we can generate on the services offered to those customers.
Does that mean that margin as a percentage will go up? That one is less clear. I actually think that the video product is a bit more attractive in the new pricing and packaging as we pull it together. And so because of that, your mix around how much video versus how much mobile and how much Internet might change. Mix tends to drive margin percentage across the company. And in this case, it might get you to the wrong answer because I think that we can drive the most collective margin by driving the most products to the customer.
On the EBITDA front, thinking about the fourth quarter and next year, we still anticipate strong EBITDA growth in Q4, though it might not accelerate the way that we had hoped given that some of our expense reduction impacts, I think, came in a little earlier than we expected, and we will have the storm impacts that hit inside of Q4. Still strong, but maybe not accelerating.
And then going into next year, we’re, of course, going to target EBITDA growth. But there are some meaningful headwinds, which I think include our Internet customer losses in 2024 and a nonpolitical year for advertising. Even with that, our expense reduction efforts, which I’ve mentioned before, include things that are both short term and have already rolled in, as well as some medium and longer-term items that are still building. I think that they’ll put us in a good place. But there are meaningful headwinds as we go into next year.

Christopher Winfrey

John, on the first question, Jessica is right about we focus on cash flow margin. But even with the percent over time — so I’m not talking at acquisition, but over time, I think it’s important to note that our triple play bundles of different combinations, they have the highest of dollars of EBITDA — not only the highest ARPU, but the highest dollars of EBITDA contribution. They also have the lowest churn and the longest customer life and they have the best ROI.
And that still is the case today. which comes back to our launch of the new Spectrum pricing and packaging, is you just have to make sure that there’s real value in the products that you’re putting on the bill. And if there is, and it’s a high-quality product, there’s value and you have utility all packaged together, you can be in an environment where you have higher dollars of ARPU. You have higher dollars of margin. You have lower churn and lower operating cost per PSU.
And even as a result of having a mix with products with different direct costs in there, you can end up long term with higher EBITDA margin even as a percent also because your operating cost is much lower. Your churn is lower. And as a result, your subscriber acquisition cost is lower because you’re not having to replace customers that you lost with new ones to fill the hole. And instead you’re using your subscriber acquisition cost to acquire net new customers, which has the impact of increasing your dollar margin as well as your percent margin over the long term.
And that’s the unique competitive advantage, I think, that we have, is we have all those products, seamless connectivity and seamless entertainment in 100% of our footprint. And that’s what we’re trying to do, is make better use of those capabilities.

Operator

Steven Cahall, Wells Fargo.

Steven Cahall

So Chris, you have a unique video offering at this point. And I know you’ve worked hard to add the streaming services to customers. When we think about where you can go from here, I’m not sure there’s been an uptick year-on-year in double and triple play customers yet. It sounds like you’re thinking maybe later next year is when you might see the fruition of a lot of those efforts come together in those multiproduct customers. So I was just wondering how you could add a little more color to retention and acquisition and what the timing and the impact of that looks like at the customer level over the medium term.
And then just a small one. I know it’s tough to unpack ARPU. But if we just think about roll to pay, you were very aggressive on Spectrum One about 18 months ago. Can you help us at all think about how much roll to pay is contributing to either revenue or ARPU at this point?

Christopher Winfrey

Why don’t I take the first one, and Jessica, if you have thoughts on the second? I agree, we have a unique video offering and, at the same time, it’s easy to get impatient as to how quickly we can get all that fully rolled out in a way that’s easy for customers to understand, appreciate, sign up to, and utilize. And yet, when you think about that first half of 2025 that I talked about to fully operationalize it, it’s really — that would only be 18 months from the time we first started to enter into these programming agreements. And so it’s a relatively short period of time where we’re going to be fully operationalized.
So our goal is, our priorities here was first to really focus on getting all these programming agreements done in a, I think, what turned out to be a 12- or 13-month period. So pretty quick to really run through all of those program agreements, some of which were early renewals because programmers were getting behind us.
The second piece is to just physically get launched the programmer apps to form part of our seamless entertainment so that customers can subscribe to those. It’s not the same because they have a broader direct-to-consumer businesses and we need to work with them on authentication as well as program or specific credentials, which means that, in its current state, it’s a high-value proposition. But it’s not always easy to find and it’s not always easy to subscribe and to manage your existing subscriptions potentially with those programmer apps.
And so that’s the environment that we sit today, which is good takeup, but not exactly the most customer-friendly proposition just yet, which is what we’re working through.
The second priority — or the third priority, first is programming relationships, two was launch the direct-to-consumer app, third is to implement the ability for customers to upgrade to the ad-free version of these apps, only a couple of which has already been launched, so we’re well in the progress with that as well.
And then the final piece is really to put it all inside of what I would call a video portal, which allows to manage all of your video subscription with us, including all of the programmer apps, when it’s included as part of your offer, when it’s upgraded to the ad-free version where we have economics as well. And the ability to sell these programmer apps to our broadband customers or to our skinny package video customers, all in the same in place where you can manage your subscriptions.
And that’s a compelling marketplace for video that we’re developing today. And it requires for some pretty significant cooperation as well, as you can imagine, with the programmers. And we think we’ll have all that placed in the first half of 2025 and be able to present that to customers as part of our pricing and packaging.
I think there was some misconception in the marketplace that thought that we were going to do some big, huge marketing campaign and that would have a financial impact next year. That’s really not the case. The investment we’re making is the utility of finding all of this in a place that can manage your subscriptions, and they’ve been able to activate all of that within Xumo in particular, or other platforms.
And the marketing and sales that we’re doing really is tied to our new pricing and packaging as part of these bundles that we’re putting out. So longer term, I expect all of that to have a pretty significant impact on acquisition of retention, certainly for video, but hopefully also with Internet when bundled together.
Already without getting to that place that we expect to be next year we already see a significant uplift in the video sell-in just from the way that we’re bundling and going to market with this new Spectrum pricing and packaging even without the benefit of that the video marketplace environment that I described. We’re already seeing a pretty significant uplift.
And the reason that we’re comfortable with that is because we know the value is there because of what’s in place already today with some of the programmer apps and what’s coming, what will be launched, and the ability to actually find and manage it in a better way.
So we’re pretty — look, we’re — on one hand, we’re excited about the space because it adds value. On the other hand, I want to be careful we’re not forecasting video growth. We’re simply saying that it’s a way to add utility into our seamless connectivity relationships in a way that hasn’t existed. And from our past experience, we know the value that can come about to the overall bundle by doing that right.

Jessica Fischer

I’ll take the other one on the mobile, called the roll to pay rates. We still see our free lines converting to being paying customers at very strong rates. In terms of the impact that that has on ARPUs across the system, so once you get to — I’m going to say normalized, but once you get to a similar number of overall free lines inside of the system in a year-over-year, then you no longer end up with the same boosts or impact of the year-over-year — the same year-over-year impact on our ARPU.
So if I think about Internet ARPU there, as an example, Internet ARPU grew 2.8% on a GAAP basis. It would have been 3.1%, excluding the GAAP allocations, which is a closer tie between the two of those than what we’ve seen previously. And I think going forward, you’ll find those coming together.
On the other side, mobile ARPU actually was up and is looking really good. But the increase that you see in mobile ARPU related to the uptake of our Unlimited Plus plans, which really has been driven by anytime upgrade, and I think could be driven further given some of the incentives that we have around it in the new pricing and packaging plans.
So we’re seeing, I guess, good growth in ARPU, but not as much at this point related to the roll-off of free lines in the system, not because the free lines aren’t performing well, but just because the free lines now as a portion of the total base are more normalized.

Stefan Anninger

Thanks, Steven. And that concludes our call today. Operator, we’ll pass it back to you.

Christopher Winfrey

Thank you very much.

Jessica Fischer

Thanks.

Operator

This concludes our call. You may now disconnect.