Altice USA’s CEO says the company is only beginning to unlock the full potential of its networks

“The macroeconomic environment, video cord cutting, and increased level of competition continued to weigh on our Q3 results,” said Mathew. “However, we remain focused on the elements within our control: driving fiber penetration, accelerating mobile line additions, achieving relatively stable ARPU despite pressure from video losses, and maintaining near record low levels of churn.”

Altice USA added 47,000 fiber net additions in Q3, ending the quarter with 482,000 fiber customers. Fiber migrations accounted for over 70% of fiber net adds.

“We achieved penetration of approximately 17% across our total fiber footprint, with some markets achieving closer to 30%,” said Mathew.

The company suffered a broadband subscriber net loss of 50,000 in the quarter, which was attributed to low levels of activity and competitive pressure across the footprint.

“Most of the year-over-year decline in our gross add performance was seen within our income-constrained customer segment,” said Mathew. “Contributing to this was the sunset of ACP and fewer additions in our back-to-school university footprint. The roll-off of the ACP program earlier this year had an impact in Q3 on both gross adds and disconnects.”

Mathew reported that Altice had approximately 10,000 ACP-related disconnects in the quarter—primarily nonpaid disconnects. He noted that, excluding ACP-based churn, the company’s disconnect trends have improved.

Unlocking the network’s full potential

Mathew said that Altice USA is still in the early stages of unlocking the full potential of its portfolio of network assets, including HFC and fiber networks.

“Our objective is to upgrade customers to fiber, which delivers many benefits, including elevating customer lifetime value, lowering churn rates, and driving higher ARPUs over time,” said Mathew. “It also enhances our network efficiency and reduces long-term operational expenses by streamlining infrastructure and support needs.”

Altice USA expects to have 500,000 fiber customers before the end of 2024 and sees a path to grow its fiber base to more than one million customers by the end of 2026.

Marc Sirota, Altice USA’s CFO, reported that growth is supported by the speeds delivered by the networks; both its HFC and fiber networks are delivering 1 gig or higher speeds over 95% of the footprint.

“Our fiber network is designed with robust capacity, easily supporting these faster speeds and increased data usage,” said Sirota. “45% of our new fiber customers take 1 gig or faster speeds, and 28% of our broadband-only fiber customers use over one terabyte of data per month.”

Sirota further reported that fiber bundled with mobile drives deeper customer engagement and retention.

“Over the past year, we’ve increased the percentage of our base that takes a converged product of broadband plus mobile from approximately 3% to 5%, with more runway to grow,” he said. “Converged customers also churn less.”

Sirota reported that Altice USA’s fiber base experiences 14% lower annualized churn than its HFC, and when paired with mobile, the percentage increased to 32%.

“Whether on HFC or fiber, convergence with mobile deepens customer relationships, increases loyalty, and reinforces the value of our network investments,” he added.

Sirota also discussed efforts to improve and enhance the networks.

“We’ve achieved approximately 99% node health across our entire footprint in Q3 through enhanced monitoring and proactive maintenance,” he said. “This program ensures consistent, reliable service by proactively identifying and addressing potential issues before they affect customers.”

Sirota also noted that, as of Q3, Altice USA has upgraded nearly all of its West footprint to DOCSIS 3.1.

“Over 3 million customers will experience better speed attainability and reliability this year, and these upgrades cost less than $350 per node,” he said. “This allows us to reduce the number of capital-intensive node splits required, and we are performing node splits in a more cost-efficient manner.”

Looking ahead

Mathew reported that Altice USA is implementing a multiyear network strategy that aims to compete most effectively at the town and local levels.

“In September, we rolled out our latest offers, which enable customers to mix and match the services they take through Optimum, with broadband as the hero product, mobile and our new TV packages as add-ons, and a three-year price lock for taking all three products.”

Altice USA sees improving broadband subscriber trends, better managing the total subscriber base, and increasing the number of products each customer takes as the main drivers of future success.

“In addition to the revenues generated by our core products, we have an opportunity to drive growth through value-added services,” said Mathew. “This includes our existing portfolio of value-added services, such as the total care support plan, which fully launched in April of this year at a price point of $15 per month. It also includes the introduction of new value-added products. For example, early next year, we will begin offering customers whole home WiFi to support their evolving connectivity needs and begin offering them the ability to purchase their favorite streaming services directly through Optimum to support their evolving entertainment needs.”

Mathew said the company is also introducing new products to better serve small and medium business customers. In Q4, the company plans to release its new connection backup service, expand its security offerings, and upgrade its Pro WiFi solution.

“These are products with strong ARPUs,” said Mathew, “which we can drive meaningfully into the base and at the point of sale.”