Altice USA expects to exceed 1 million fiber subscribers by year-end 2026 and to achieve a similar milestone with mobile by 2027. Even so, the operator is still shedding broadband customers overall.
Altice USA said it will continue to ramp up its mobile and fiber initiatives, predicting that it will eclipse 1 million subscribers in both categories in the coming years.
Starting with mobile, Altice USA expects to push past 1 million mobile lines by the end of 2027 – more than doubling its current total of about 420,000. The company is identifying that goal some 18 months after effectively relaunching Optimum Mobile, a product that rides on T-Mobile's mobile network and is supplemented by Altice USA's Wi-Fi network.
Altice USA added 35,500 mobile lines in Q3 2024, well ahead of the 24,100 it added in the year-ago quarter. The operator is seeing sales momentum as it expands its sales channels, including retail, inbound and door-to-door, and as it continues to push Optimum Complete, a home broadband/mobile bundle that was introduced in May 2023.
"On mobile, I'm really bullish on our trajectory," Altice USA CEO Dennis Mathew said Monday on the company's earnings call.
Stemming churn
Like its cable operator peers, Altice USA is also looking for mobile to help trim down churn. When customers combine fiber broadband with mobile, annualized churn is improved by 32% compared to hybrid fiber/coax (HFC) customers that do not yet take mobile, CFO Marc Sirota said.
Turning to Altice USA's fiber-to-the-premises (FTTP) strategy, the operator expects to expand its fiber customer base to more than 1 million subs, or 30% penetration, by year-end 2026. Altice USA added 47,000 fiber subs (45,700 residential and 1,700 business) in Q3, ending the period with 481,600 (468,500 residential and 13,100 business). The operator expects to hit the 500,000 fiber customer milestone before the end of 2024.
Altice USA's fiber strategy is currently focused on migrating existing customers. Indeed, the operator estimates that about 70% of its fiber net adds came from fiber migrations in Q3.
Altice USA has built FTTP to about 2.9 million passings (out of a total of 9.8 million), primarily in its footprint in New York, New Jersey and Connecticut. The operator is leaning more heavily on DOCSIS 3.1 upgrades in its more rural, former Suddenlink footprint.
Broadband, video losses continue
Though Altice USA, which offers services under the Optimum brand, is seeing fiber subscriber gains, the operator continues to shed broadband customers. It lost 49,200 residential broadband subs in Q3 versus a year-ago loss of 31,000, ending the quarter with 4.03 million. About 10,000 losses in the period were tied to the sunset of the FCC's Affordable Connectivity Program (ACP), largely due to non-paid disconnects.
The operator aims to boost broadband average revenue per unit (ARPU) through a Total Care support plan and a whole-home Wi-Fi offering that's set to launch in 2025.
Unlike Comcast and Charter, Altice USA did not see improving broadband subscriber trends in Q3.
"Their third quarter organic loss of 54K subscribers suggests that they are nowhere near out of the woods." MoffettNathanson analyst Craig Moffett explained in a research note (registration required). "While Altice's larger peers are showing signs of a rebound Altice itself is still knee-deep in alligators."
But Moffett also points out that Altice USA is doing some things right, including a gradual fixing of its broadband pricing and improving customer service.
The subscriber story is similar with video. Altice USA lost 77,000 video subs, lowering its grand total to 1.94 million. The operator is looking to a set of new pay-TV packages, including a lower-cost entertainment-focused programming tier, to help it gain and retain video subs.
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