As Altice USA’s new CEO takes over, the company faces pressure from other fiber network operators and new Fixed Wireless Access services, the possibility of a sale of some assets and a continuing focus on selling high-speed fiber broadband services.
New CEO Dennis Mathew, who is taking the reins as Executive Chairman Dexter Goei moves back to Europe, comes to the company from cable provider Comcast, where he spent nearly 20 years and led its MidAtlantic region. “I see immense potential to further connect with and serve customers while elevating the company as the broadband provider of choice,” he told investors on Altice’s most recent quarterly call, later adding, “I’m a big believer in fiber as the best broadband technology that exists today” and saying that is a “key tenet of the Altice strategy.”
In line with that strategy, Altice recorded its highest-ever level of incremental fiber passings (321,000), Goei and Mathew said, and now reaches 1.9 million locations with the expectation of being over 2 million by the end of the year. The company has a base of 135,000 fiber customers. Execs said that the company expects to grow its customer numbers at a faster pace due to the fiber network’s expanded reach.
Altice’s third quarter revenues were down 7% year-over-year to about $2.39 billion, which Goei said was due to both pressure in its residential and news and advertising businesses (the latter down around 16%) as well as the loss of air strand revenue due to the termination of a legacy contract with the former Sprint, now part of T-Mobile US. If the Sprint revenues were excluded, total revenues would have been down 4.3%, company leadership noted.
In its residential services segment, Altice saw a net loss of 50,000 customer relationships, with broadband net losses of 43,000. The company said that was driven by higher competition in its footprint, including from both fiber competitors and FWA broadband. “It’s clear that fixed wireless broadband is taking some of the growth in switchers out of the market in the past few quarters, given the growth from these operators as well as some localized pressure from fiber overbuilders,” said Goei. Still, the company added 31,000 fiber customers and it has introduced symmetrical 2-Gig and 5-Gig speed tiers to offer faster service than competitors; Altice is offering multi-gig speeds in some parts of the Northeast and plans to offer them throughout its fiber footprint by the first quarter of 2023.
Altice’s one-Gig customer penetration hit 19% in the third quarter, but about 42% of its customer case has speeds of 200 Mbps or lower, which the company sees as a significant opportunity to up-sell its higher-speed tiers. The company’s Optimum Mobile service had about 236,000 lines as of the end of the quarter, adding 5,000 net new subscribers and reaching 5.5% penetration of Altice’s residential broadband customer base.
Several analysts asked about the possible sale of some of Altice’s Suddenlink assets, but it is unclear whether the company might sell all of those markets or piecemeal them based on interest in specific ones—or whether it will sell at all. “I think it’s fair to say that we’re getting to a place where the decision’s pretty imminent as to whether or not we’re going to do something or not on that,” said Goei. He declined further comment.
