March 24, 2022
Altice USA's plan to accelerate mobile subscriber growth now has the green light after the operator struck an extended and long-expected strategic MVNO deal with T-Mobile.
Altice USA launched a national mobile service in the fall of 2019 through its original MVNO agreement with Sprint. In the wake of the T-Mobile-Sprint merger, Altice USA has been shifting its relatively small mobile business to the T-Mobile network and has been hinting that a new, extended MVNO deal with T-Mobile was in the works.
Figure 1: (Source: ZUMA Press, Inc./Alamy Stock Photo)
Altice USA and T-Mobile didn't go into great detail on the terms of the extended deal, offering a minimal declaration that the deal is "mutually beneficial to both companies." But they did note that the new deal paves the way for Altice USA's Optimum Mobile service to have full access to T-Mobile's 5G network, and that it will put Optimum Mobile in position to "provide more flexibility and value to our customers" when mobile is combined with its home broadband service.
Altice USA has been asked how the new MVNO agreement will put it in position to offer more flexible options and packages. Optimum Mobile currently offers three monthly data plans – 1 gigabyte, 3GB and unlimited data – with unlimited talk and text via the T-Mobile network. The starter 1GB package begins at $14 per month per line for Optimum or Suddenlink customers, or $19 per month for everyone else. Altice USA is offering its 1GB plan for free for 12 months to new mobile customers (save for a $20 activation fee), according to the Optimum Mobile webpage.
Update: Altice USA confirmed that the 12-month 1GB package promotion, which is limited to five lines per customer, was recently launched.
It's expected that the extended agreement will enable Altice USA to be more aggressive with multi-line, family plans such as the ones Comcast and Charter Communications now offer under their respective new MVNO agreements with Verizon.
It's also not clear if T-Mobile stands to gain a mobile backhaul benefit from the new deal as Altice USA embarks on an aggressive, multi-year fiber upgrade plan that will span some 6.5 million homes passed in the coming years. That revised plan will concentrate fiber-to-the-premises upgrades in Altice USA's Optimum footprint in parts of New York, New Jersey and Connecticut, and include some buildouts in its more rural Suddenlink service areas.
Mobile acceleration plan
Altice USA has been hinting for months that a new MVNO agreement with T-Mobile was in the works. Meanwhile, the company has also been preparing to push forward with a new converged bundle that combines mobile with home broadband. The hope there is to accelerate subscriber growth for a mobile product that added just 5,000 lines in the fourth quarter of 2021, ending the year with about 186,000 lines in service.
"Wireless is very important to our strategy," Altice USA CEO Dexter Goei said last month on the company's Q4 2021 earnings call.
Altice USA's current break-even target for mobile is the end of 2022, with profitability to follow in 2023. Comcast's Xfinity Mobile business reached profitability on a standalone basis for the first time in Q1 2021. Charter CEO Tom Rutledge made a similar declaration for Spectrum Mobile earlier this month.
US cable snaring mobile share
Led by Comcast and Charter, the US cable industry has enjoyed some success with mobile services that focus on the bundling of mobile with high-margin home broadband services. According to MoffettNathanson, US cable represented 29.2% of domestic wireless industry phone net adds in Q4 2021. Comcast, Charter and Altice USA combined to add a record 697,000 mobile lines in the period, ending 2021 with a combined 7.73 million lines.
Figure 2: Used with permission. Click here for a larger version of this image.
US cable holds steady with 29% of mobile adds in Q4 Altice USA joins the fiber frenzy New ruling reopens door for Cox's mobile launch T-Mobile moves to renegotiate MVNO deals Altice USA chief sets sights on renewed growth WOW enters the wireless game with Reach Mobile Altice USA revamps network upgrade, growth strategy — Jeff Baumgartner, Senior Editor, Light Reading
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