Combes Lands Altice CEO Job as Cablevision Deal Looms

Cable group Altice has announced a management reshuffle that will see former Alcatel-Lucent boss Michel Combes replace Dexter Goei as CEO.

The company said the changes were being made in advance of its $10 billion takeover of US cable operator Cablevision Systems Corp. (NYSE: CVC), which is expected to close this week, and would reflect its enlarged global presence following that move.

Combes became chief operating officer of Altice last September after quitting the leadership role at Alcatel-Lucent (NYSE: ALU), which rival equipment vendor Nokia Corp. (NYSE: NOK) had agreed to buy in a €15.6 billion ($17.7 billion) deal. (See Ex-AlcaLu Boss Tasked With Bolstering Altice.)

He was tasked with improving efficiency at Altice, which has been on something of an acquisition spree during the past few years, buying networks in France and Portugal, besides the US.

Critics say Altice has been ruthless in cutting costs to boost profit margins at the companies it has acquired, but debts at the business have rocketed and the performance of Numericable-SFR , Altice's French operation, has recently suffered. (See No-Growth Altice Results Send Shares Falling.)

Earlier this year, the company revealed that net debts had soared to about €35.6 billion ($40.4 billion) at the end of 2015 -- or about 5.3 times Altice's annual EBITDA -- from about €24 billion ($27 billion) a year earlier.

In his new role, Combes will have responsibility for all of Altice's operating affiliates, CEOs and corporate functions, taking charge of the company's executive committee. Besides continuing to improve operational excellence, Combes is also expected to focus on "service innovation."

Goei will become chairman and CEO of the US business, which will comprise Cablevision as well as Suddenlink Communications , another cable operator it has already acquired for $9.1 billion.

He is also stepping into the role of Altice president -- until now held by founder and owner Patrick Drahi -- and will take charge of Altice's global M&A-related activities.

Although Drahi is stepping down as president, he will continue to pull the strings at Altice, setting the company's "strategic, operational and technological agenda," according to a statement.

"I am extremely excited about our US business which is accounting for approximately 40% of our group and offers huge development opportunities," said Drahi. "Dexter exemplifies the entrepreneurial and commercial spirit of Altice and will provide the same vital leadership to our US business he displayed when building the Altice Group in the last eight years."

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Altice is set to become a member of what Light Reading has called "the new cable trinity" in the US following its takeovers of Cablevision and Suddenlink, which will leave it with 3.7 million video customers, 4 million Internet subscribers and 2.7 million voice customers. (See Coming Soon: The New Cable Trinity.)

That will still leave it a long way behind market leaders Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Charter Communications Inc. , but Altice has promised to make investments to increase broadband connection speeds and is also trying out new IP-based video technologies that could fuel interest in its services.

In Europe, Altice faces a particular challenge in the French telecom market, which accounted for 60% of its sales in the January-to-March quarter, following the failure of several recent consolidation attempts by network operators.

Currently home to four players rolling out both fixed and mobile networks, France has emerged as one of Europe's most fiercely competitive markets since the entry into the mobile sector of Iliad (Euronext: ILD), a low-cost broadband retailer, in early 2012.

Iliad's aggressive tactics have been held responsible for subscriber losses and dwindling profits by rival networks.

Shares in Altice were trading up 1.7% in Amsterdam today following news of the management reshuffle. The stock is currently up 7.5% on a year-to-date basis but has fallen by 50% since August last year.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

mendyk 6/21/2016 | 11:27:38 AM
Get ready for the headline puns If nothing else, this is great news for makers of golden parachutes -- and LR headline writers.
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