Liberty Broadband's Q4 2024: Contradictions Surrounding Competition, Subsidies, and GCI's Outlook

These are the key contradictions discussed in Liberty Broadband's latest 2024Q4 earnings call, specifically including: the competitive landscape in the Alaska market, Starlink's impact on competition, expectations for government subsidies, and the potential impact of subsidies on GCI results:



Liberty Broadband Acquisition:
- Liberty Broadband announced a definitive agreement for their acquisition by Charter, with holders of Liberty Broadband Series A, B, and C common stock receiving $0.236 of a share of Charter common stock for each share of Liberty Broadband held.
- The transaction is expected to close on June 30, 2027, unless otherwise agreed, and aims to provide certainty for shareholders, enhanced trading liquidity, and serves in the best interest of all shareholders.

GCI Revenue and Financial Performance:
- GCI achieved record revenue for the first time, crossing the $1 billion mark in 2024, with revenue increasing by 5% in the fourth quarter and 4% for the full year.
- The growth was driven by strength in data revenue, particularly business data revenue from a strong upgrade cycle in schools and healthcare corporations in rural Alaska.

GCI Spin-off and Capital Expenditures:
- GCI is expected to be spun off prior to the transaction close, with the distribution expected to be taxable to Liberty Broadband and its stockholders.
- GCI spent $193 million on capital expenditures in 2024, with plans to increase capital expenditures to approximately $250 million in 2025, focusing on additional investments in rural connectivity to fulfill build-out requirements of the Alaska plan.

Competitive Landscape and Government Subsidies:
- GCI competes primarily with AT&T and Verizon in the wireless market, with AT&T sharing the majority of the market, while ACS and small rural local phone companies are the primary wireline competitors.
- GCI expects to receive a substantial portion of the $1 billion in state grants, despite potential adjustments to terms and conditions under the new administration, with a focus on fiber network construction in rural areas.