YOU ARE AT:BusinessAltice spins off U.S. business as Sprint relationship develops

Altice spins off U.S. business as Sprint relationship develops

French cable provider Altice is reorganizing its corporate structure, including separating its operation in the United States into a standalone business called Altice USA. The move is subject to approval from regulators and shareholders.

In a Jan. 8 presentation to investors, Altice described the thinking behind the move: the European and American markets have different dynamics, regulatory schemes and require varying strategies; dedicated management will drive a focus on execution; and simplified operation and financial structures will add efficiency among other factors.

The company expects the separation to be finalized by Q2 this year.

On news of the reorganization, Altice USA stock jumped nearly 20%. Rich Smith of The Motley Fool, noting that Patrick Drahi will still lead both companies, wrote, “The biggest thing that is changing, is that as part of its spin-off announcement, Altice also announced that it will be paying Altice USA shareholders a special one-time dividend worth $1.5 billion ahead of the spin-off, and initiating a $2 billion share buyback plan as well. The prospect of receiving a near-immediate windfall of $3.5 billion worth of capital returns to shareholders — an amount equal to nearly 20% of the company’s current market cap — is probably what’s driving the buying frenzy on Tuesday.”

In the U.S., Altice is following a three pronged strategy:

  • “Complete implementation of opex efficiencies;
  • “Focus on KPIs to improve revenue growth;
  • “Full scale deployment of Altice One and fiber (FTTH) built out.”

That last point about the continued build out of fiber optic network infrastructure is what’s driving a relationship between Altice USA and Sprint. Back in November, Sprint officials announced the carrier would work with Altice USA to leverage the cable provider’s fiber optic network to densify its own network with the deployment of thousands of the all-wireless Magic Box small cells.

In exchange for network access, Altice will enter the wireless service provider market through a mobile virtual network operator arrangement that will see the cable company offer voice and data services using Sprint’s spectrum holdings.

Another tie-up between the two companies involves Michel Combes, former CEO of  Altice, getting tapped to become the new chief financial officer of Sprint effective Jan. 6, replacing Tarek Robbiati who is set to depart on Jan. 31. Sprint also said Combes will join the U.S. carrier’s board of directors at “a later date.”

 

 

 

ABOUT AUTHOR

Sean Kinney, Editor in Chief
Sean Kinney, Editor in Chief
Sean focuses on multiple subject areas including 5G, Open RAN, hybrid cloud, edge computing, and Industry 4.0. He also hosts Arden Media's podcast Will 5G Change the World? Prior to his work at RCR, Sean studied journalism and literature at the University of Mississippi then spent six years based in Key West, Florida, working as a reporter for the Miami Herald Media Company. He currently lives in Fayetteville, Arkansas.

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