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Buying Wireless Spectrum 'Not in the Cards' for Altice USA, CEO Says

Jeff Baumgartner
5/2/2019
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Altice USA remains focused on the summer launch of its mobile product -- in partnership in Sprint -- and has no plans to bid for licensed spectrum that will become available in the shared CBRS band.

Bidding on licensed spectrum "is clearly not in the cards today," Altice USA CEO Dexter Goei said today in a call with analysts timed with the company's Q1 results. "We'll continue to look at spectrum alternatives, but where we're truly focused on right now is launching our mobile products this summer."

Altice USA has conducted trials in CBRS spectrum, a shared slice of mid-band capacity that will support both licensed and unlicensed use-cases alongside incumbent users such as the US Navy.

Altice USA said it's on-track to launch its wireless service this summer, but has not announced how that product will be priced and packaged. In the meantime, Altice USA has completed the core network for that effort, including the deployment of about 19,000 AirStrand small cells via the Sprint partnership. Altice USA has also signed a "major mobile handset partnership," but did not identify the partner.

Video and broadband improvements in Q1
Altice USA cut Q1 video losses to 10,000, compared to a loss of 30,000 video subs in the year-ago quarter. That result was the best ever in the video category for the operator, which also saw video subscriber gains in its Suddenlink cable footprint for a second consecutive quarter.

Altice USA attributed video subscriber improvements in part to Altice One, its all-services platform, which recently unleashed a "3.0" software upgrade. The company had about 400,000 unique Altice One subs at the end of Q1, or about 12% of its video sub base.

Altice USA also added 37,000 broadband subs, ahead of 26,000 additions a year earlier. Goei said Altice USA's DOCSIS 3.1 upgrades in its Optimum footprint (formerly Cablevision Systems) is on track, with plans to launch 1-Gig service on HFC there later this year.

The company is also accelerating the rollout of its fiber-to-the-premises network across Long Island, New Jersey and Connecticut. While that FTTP deployment enables symmetrical 1 Gbit/s speeds today, the rollout will position Altice USA to launch symmetrical 10-Gig service to residential and small- and mid-sized business customers next year, he said.

In Q1, the average monthly household data usage for Altice USA reached more than 280 Gigabytes, up 20% versus the year-ago quarter.

Business service revenues rose 5.3%, while ad revenues jumped 6.8%.

Lightpath update
Regarding the exploration of what to do with Lightpath, Altice USA's fiber-based business services unit, Goei said that process is ongoing, noting that it could lead to a partial sale or full sale of that business.

"I don't anticipate having any real view on that for many more months to come, as these processes take time," he said. "But that is an ongoing project that we're doing internally."

Goei was also asked about recent reports that Charter Communications and Altice USA might pursue a merger, calling them "extremely speculative."

"We're open to maximizing shareholder value," he said, adding that the preference is to grow the company organically. "If someone is interested in talking to us, my line is always open. But that is not something we're focused on today."

Altice USA said Q1 revenues rose 2.9%, to $2.40 billion, driven by residential revenue growth of 2.4%, while its net loss narrowed to $25 million (4 cents) per share, versus a loss of $129 million (17 cents per share) a year ago.

Altice expects 2019 revenue growth of 2.5% to 3% and annual capital expenditures in the range of $1.3 billion to $1.4 billion.

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— Jeff Baumgartner, Senior Editor, Light Reading

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