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December 5, 2023
Altice USA is heading on the offensive as the company looks to shore up a broadband business that's been saddled with subscriber losses and to invigorate a mobile business that's starting to get out of the slow lane.
Those are just a couple of areas that Altice USA is trying to improve upon amid a broader turnaround strategy unleashed by Dennis Mathew, a former Comcast exec who took over for Dexter Goei as CEO about 14 months ago.
"We're in the early innings of this turnaround," Mathew said Monday at the UBS Global Media and Communications Conference. "We've made it clear we want to be the connectivity provider of choice in every community that we serve. But those can't just be words. Those have to be actions."
Part of that process includes an extensive house-cleaning and a shift in company culture.
Mathew estimates that about 60 new vice presidents (and above) have been brought on under his watch. In addition to bulking up Altice USA's local presence, the company recently added new heads of commercial and consumer services as well as a new chief growth and innovation officer.
Mathew estimates that Altice USA is about 70% to 75% of the way through its ongoing leadership transition.
Part of the company's plan is to further stabilize its average revenues per user (ARPU). Mathew lamented that the company didn't have much of a base management strategy in place when he joined, noting that the company was instead focused on promotions and rate events. Altice USA, he said, is implementing a more robust strategy that includes elements such as speed upgrades, more transparency on price and a proactive stance with mobile services.
Altice USA is seeing activity pick up on mobile as it invests further in the retail channel and takes advantage of its relatively new Optimum Complete home broadband/mobile bundle. Altice USA ended Q3 2023 with just 288,200 mobile lines, but additions in the quarter of 24,100 lines accelerated from year-ago adds of 4,100.
"We're converting the culture and converting the leadership and the focus to selling mobile," Mathew said.
Still bullish on fiber
On the broadband side, Altice USA will continue to focus on fiber network upgrades in its footprint in parts of New York, Connecticut and New Jersey. Mathew said fiber is delivering double-digital benefits on net promoter scores, ten-point benefits on churn and 20% on ARPU.
"We're really bullish on what fiber is able to deliver," Mathew said.
Altice USA is using fiber upgrades selectively in its rural areas in the western US, where it's more focused on DOCSIS 3.1 upgrades of the hybrid fiber/coax (HFC) network.
Via both fiber and HFC, Altice USA offers speeds of at least 1 Gbit/s across 95% of its footprint, a number that the company wants to get to 100% in 2024.
Altice USA is also looking to compete better against fiber and fixed wireless access (FWA) at the local level as the company takes advantage of new regional leadership teams.
"The reality is that, historically, we've not done a good job when a fiber overbuilder showed up in our footprint or a competitor. We were always kind of on our back heels in a defensive posture, reacting," Mathew said. "We're going to go on the offense and tell our story and make sure we have the right offers and the right go-to-market strategy to compete most effectively in these areas."
No cable operator is saying pay-TV is going to return to subscriber growth. But Altice USA has joined others with the introduction of new app-focused streaming platforms. The company now offers an Android TV-powered, streaming-based product that runs its pay-TV app alongside third-party streaming services. Altice USA has also adapted its video streaming app for retail platforms such as Apple TV.
Mathew said Altice USA will offer a self-install option for new video subs in 2024 that aims to boost net promoter scores and lower operating costs.
But he also acknowledged that the pay-TV business model itself is in disrepair.
"Today, I have to tell you [that] traditional video defies the laws of basic economics," Mathew said. "Demand is at an all-time low and price and cost of content is at an all-time high."
He said it's critical for distributors and programs to figure the right path forward by putting consumers at the center with personalized and flexible packages that include direct-to-consumer streaming services.
"We need to right-size video within our existing portfolio," Mathew said.
Altice USA is also looking to improve its financial positioning. The company is starting to explore the use of securitized debt, a path that Frontier Communications is using today to help fund its fiber network upgrade/buildout, according to Mathew.
"That is an option. We're looking at all options," he said.
Senior Editor, Light Reading
Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.
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