Charter 2001 Annual Report Download - page 9

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Letter to Shareholders
Dear Fellow Shareholders:
The year 2001 was a year of transformation. We
progressed from being a company focused on acquisition
to a company focused on operational execution, from a
cable television company to a broadband communications
company. With our acquisition and capital programs
largely completed, we are moving swiftly to unleash
the capabilities of one of the most profound tools of
communications ever introduced – the advanced digital
broadband network – for the benefit of our customers and
shareholders alike.
Make no mistake: The business of broadband is booming.
We are now realizing strong momentum across our entire
advanced broadband platform as we introduce multiple-
service bundles that provide our customers excellent
value and fortify our competitive position as one of the
largest broadband providers.
Our digital video platform continues to progress
both as a cash flow contributor and as a launch pad for
new advanced services. And we are now experiencing
excellent progress in our broadband cable modem busi-
ness, where rapid adoption rates, high customer demand
and satisfaction levels only hint at what’s to come.
With our Charter Pipeline®broadband Internet
service, we are developing a business that not only
contributes to the on-going success of our company,
but also enriches the quality of life our customers enjoy.
As a growing number of Charter customers are discov-
ering, Charter Pipeline makes its easy and convenient
for people to learn, play, work and stay in touch.
Charter Pipeline provides the electronic links that
connect residential customers to a high-speed data
network capable of delivering everything from crystal-
clear video clips to web pages that appear instantly upon
command. The difference between the Charter Pipeline
experience and the dial-up Internet of old is remarkable.
It’s like the difference between traveling by airplane and
traveling by automobile. Between color television and
black-and-white. Thanks to the excellent progress we
have made in building our cable modem business, Charter
connects an ever-increasing customer base to a high-
speed, always-on broadband network that paves the
way for a new generation of media services.
Because of the power and presence of our high-
speed, broadband distribution platform, these techno-
logical advances now are available to millions of Charter
Communications®households on an affordable, accessible
basis. Not only have we transformed the online experi-
ence, we are now beginning to liberate it from the
confines of the personal computer. Our forthcoming
initiatives are aimed at serving a new generation of
information and entertainment appliances – in the
family room, the kitchen, or wherever our customers
want to enjoy a connection to our broadband network.
Charter Pipeline is emerging as a vital contributor
to Charter’s growth. We ended 2001 with 607,700
cable modem customers, and our momentum increased
in early 2002 as we added a record 140,000 new cable
modem customers in the first quarter – more than
10,000 each week. Along with this rapid customer
growth, Charter has continually increased the operating
margin from the high-speed data service.
Charter Pipeline represents a fundamental contrib-
utor and a building block for our company and our future.
But it’s only one element in the business of broadband.
We’re also gaining significant economic momentum on
these fronts:
We are leading our industry in digital cable market share.
We ended 2001 with more than 2 million Charter Digital
Cable®customers, representing an industry-leading digital
penetration of nearly one digital customer for every three
basic video customers. We continue to add digital cable
customers at a rapid pace, and we remain resolved to
attaining ubiquitous digital penetration across our entire
customer base.
We are introducing more customers to the power of
Video On Demand. Part of our new slate of interactive
digital television services, Video On Demand (VOD) offers
hit movies, episodic television programs and specialty
programming directly from our broadband network, with