Amid ongoing fiber-to-the-premises network upgrades, Altice USA is on pace to launch FTTP-based triple-play packages (voice, video and data) within the next three months, company CEO Dexter Goei said on Tuesday at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco.
Altice USA is currently offering speeds up to 1 Gbit/s via its expanding FTTP network in its Optimum (former Cablevision Systems) footprint serving parts of New York, New Jersey and Connecticut. The operator ended 2019 with more than 600,000 service-ready FTTP homes, representing about 12% of the Optimum footprint.
The coming triple-play offering will be delivered on an FTTP-based version of Altice One, the company's all-services gateway. Altice USA has already deployed Altice One to about 543,000 customers on its HFC network, equating to about 17% of its total video customers. Goei expects penetration of Altice One to rise to 19% to 20% by the end of Q1 2020, noting that the product has resulted in 20% churn improvements over its legacy platform and a significant rise in data usage thanks to Altice One's integrated Wi-Fi technology.
Goei reiterated the strategic benefits of the FTTP upgrade in the Optimum footprint, holding that it will result in lower operating expenses and network maintenance, and put Altice USA on a path to deliver 10-Gig services without waiting on next-gen DOCSIS technologies.
Altice USA is also pushing DOCSIS 3.1 upgrades on portions of its HFC plant to deliver speeds up to 1 Gbit/s.
Altice USA is going with 1-Gig as it grapples with Verizon Fios in the Northeast. Those speed upgrades "eliminate the mindshare Fios had on 1-Gig," Goei said.
Goei also downplayed the threat of Verizon's new Mix & Match packages, which lead with broadband and allow subs to tack on either Fios TV or YouTube TV. Altice USA has effectively blunted Verizon's offensive with its own promotions, citing strong subscriber growth in the last three months, and will decide whether to extend those promos based on how the market continues to react, he said.
Goei said the company is pleased with the early results of Altice Mobile, which relies on a Sprint MVNO deal and an additional roaming agreement with AT&T. Altice USA launched the product last fall and ended 2019 with 69,000 mobile lines in service.
He said the still-pending T-Mobile/Sprint deal will be a net positive for Altice USA, particularly with respect to mobile 5G. "We have all of the tools for the long term to think about our position in this market," Goei said.
At the same time, he shrugged off the threat posed by 5G-based fixed wireless broadband even as Verizon prepares to introduce a second generation of its 5G Home service. He argued that 5G-based fixed wireless service is an expensive proposition and that the cable operator will easily be able to retain a lead on per-bit costs and overall performance.
"The return on capital doesn't make any sense," Goei said of 5G fixed wireless broadband competition. "The numbers don't work in my head in terms of how to get a return there."
On the M&A front, Altice USA will continue to keep an eye out for opportunities to acquire relatively small, tuck-in operations along the lines of its recent $150 million acquisition of Service Electric Cable TV of New Jersey.
"I'm not sure there are a ton of those" in the northeastern US, he said. Goei's more optimistic about possible opportunities surfacing in areas adjacent to Suddenlink's footprint, which covers more rural parts of the country. M&A prospects could open up in some of those markets if local, independent operators there grow tired of rising programming costs or decide they can no longer stomach the cost of another network upgrade, he said.
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- Altice USA hooks up with Apple
- Altice cooks up RDK-powered broadband gateways
- Altice Mobile debuts $20 per month 'price for life' to Optimum and Suddenlink subs
- Verizon intros 'Mix & Match' plans for Fios in strike at cable industry
— Jeff Baumgartner, Senior Editor, Light Reading