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June 25, 2021
Altice USA has confirmed reports that it plans to cut upstream speeds on its broadband tiers for new subscribers on its hybrid fiber-coax (HFC) network by as much as 86% next month, despite a surge in upstream traffic during the COVID-19 pandemic.
The new pricing scheme, first reported by Ars Technica, calls for upstream speeds to drop for new Altice USA broadband customers on all five tiers offered by the company, starting July 12. Notably, prices will remain the same as before on all five tiers despite the upstream speed cuts.
Specifically, new customers signing up for Altice USA’s lowest tier, Optimum 100, which now offers 100 Mbit/s downstream and 35 Mbit/s upstream speeds, will see upstream bandwidth fall to just 5 Mbit/s. The MSO's 200 Mbit/s downstream service will cut its 35 Mbit/s upstream speed to 10 Mbit/s. The 300 Mbit/s service will shave its 35 Mbit/s upstream speed to 20 Mbit/s. And the Optimum 400 plan will slice its 40 Mbit/s uplink speed in half to 20 Mbit/s.
Finally, Altice USA will cut the upstream speed of its highest HFC broadband tier, which offers 1 gig downstream speed, from 50 Mbit/s to 35 Mbit/s.
Existing Altice USA broadband subscribers will also experience the changes if they upgrade, downgrade or otherwise change their service. Downstream speeds on all five tiers will remain the same as before.
The upstream speed changes on the HFC network will not affect Altice USA's steadily growing base of FTTH subscribers, who now receive up to 1 gig symmetrical service. The company ended Q1 with 4.3 million broadband subscribers, with most of them still on its HFC lines.
An Altice USA spokesman said the company is not making the moves because its HFC network has been getting overburdened during the pandemic, which has caused upstream traffic to surge as much as 50% or more on broadband networks throughout the US. Rather, he said, the network is holding up quite nicely, thank you.
"Our network continues to perform very well despite the significant data usage increases during the pandemic, and the speed tiers we offer, ranging from 100Mbit/s to 1 Gig on HFC and fiber, provide customers with flexibility to choose the best package for their needs," the spokesman said in a written statement emailed to Light Reading. He also stated that the cableco's "new HFC upload speeds are in line with other ISPs and aligned with the industry."
In addition, the Altice USA spokesman noted that the operator "recently introduced our Smart WiFi 6 product, which provides reliability, expanded range, enhanced streaming, and it delivers fast WiFi up to 1G to connect multiple devices at once without slowing down."
But market observers see other motives behind Altice USA's upstream speed changes. They suspect that the MSO is cutting HFC upstream speeds to push subscribers to upgrade to higher, more expensive tiers.
"If we take Altice at their word that the network is performing well, then the only reason to do this is to push customers who absolutely need the higher upload speeds into more expensive bandwidth tiers," said Jeff Heynen, VP of Broadband Access and Home Networking at Dell’Oro Group, in an email response to questions from Light Reading. "This is exactly what other cable operators have done – limit upload speeds and then push customers who need 20Mbit/s+ uploads to their more expensive tiers. So yes, they are matching what other ISPs are doing, but those ISPs happen to be other cable operators following a similar pricing strategy."
Heynen noted that, with its new upstream speed strategy, Altice USA risks losing broadband subscribers to Verizon's FiOS service, which is its biggest competitor in the New York region where it's concentrated. But, he said, "I’ll bet Altice has done the math and found that even an above-average churn rate because of this decision will be more than offset by the increase in revenue they will see as subscribers switch to higher-speed tiers."
— Alan Breznick, Cable/Video Practice Leader, Light Reading
Cable/Video Practice Leader, Light Reading
Alan Breznick is a business editor and research analyst who has tracked the cable, broadband and video markets like an over-bred bloodhound for more than 20 years.
As a senior analyst at Light Reading's research arm, Heavy Reading, for six years, Alan authored numerous reports, columns, white papers and case studies, moderated dozens of webinars, and organized and hosted more than 15 -- count 'em --regional conferences on cable, broadband and IPTV technology topics. And all this while maintaining a summer job as an ostrich wrangler.
Before that, he was the founding editor of Light Reading Cable, transforming a monthly newsletter into a daily website. Prior to joining Light Reading, Alan was a broadband analyst for Kinetic Strategies and a contributing analyst for One Touch Intelligence.
He is based in the Toronto area, though is New York born and bred. Just ask, and he will take you on a power-walking tour of Manhattan, pointing out the tourist hotspots and the places that make up his personal timeline: The bench where he smoked his first pipe; the alley where he won his first fist fight. That kind of thing.
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