Altice USA joins the fiber frenzy
Altice USA is accelerating the size, scope and pace of fiber-to-the-premises (FTTP) buildouts and upgrades, announcing Wednesday that it will bring fiber and multi-gigabit speeds to more than two-thirds of its footprint, including 2.5 million homes in some of its rural Suddenlink areas, by the end of 2025.
All told, Altice USA's new multi-year FTTP plan will span 6.5 million homes passed in the coming years. While more than half of that total will be concentrated in its Optimum footprint in parts of New York, New Jersey and Connecticut, the updated strategy adds a strong FTTP commitment in the Suddenlink footprint, including some markets where it competes with companies such as Frontier Communications and Vexus Fiber.
Altice USA, which tangles with Verizon Fios in parts of its Optimum footprint on the east coast, plans to launch multi-gig service by mid-2022. Verizon recently launched a 2-Gig Fios tier in New York, with plans to extend that speedy service to other Fios markets later in the year.
Here's how Altice USA's updated fiber buildout plan stacks up:
|Year||Optimum new FTTP passings||Suddenlink new FTTP passings||Total FTTP footprint (including passings from prior years)|
|2022||+1.1 million||+200,000||2.5 million|
|2023||+1 million||+600,000||4.1 million|
|Source: Altice USA|
Altice USA has already identified an initial group of FTTP target markets in its Suddenlink footprint in Texas, with the first being Abilene, Amarillo, Bryan-College Station, Lubbock, San Angelo and Tyler. That buildout is expected to be completed in phases over the next 12 to 24 months and enter the picture as Altice USA moves ahead with a plan to replace the Suddenlink brand with Optimum.
Speaking on the company's Q4 2021 call, Altice USA CEO Dexter Goei said the operator will also explore opportunities to secure subsidies to help fund fiber builds in underserved and unserved areas. The company is close to announcing its first subsidy win that will cover about 30,000 homes passed, and is in position to apply for additional subsidies covering close to 500,000 homes, and potentially up to 1 million, he added.
"Fiber is the future, and given the progress we have made at Optimum with our fiber build, we're excited to build on that success and break ground later this year at Suddenlink to bring our state-of-the-art network to more customers and communities," Goei said. "We strongly believe this is the right approach to improve the customer experience and enhance the value of the business."
Altice USA's more aggressive FTTP strategy is starting out with fiber networks that passed about 1.2 million homes at the end of 2021. Altice USA added about 300,000 FTTP to the total during the year. The company is on track to end 2022 with 3.5 million total fiber homes passed that are "ready for sale," Goei said.
Analysts pressed the company on its ability to execute the plan in the near term, given ongoing supply chain and labor constraints.
Goei insisted that Altice USA already has the raw materials and inventory in hand to fulfill its plans for the next nine to 12 months. Labor is less predictable, but he said 20% of the company's field operations workforce is already fiber-related. On top of that, the company has already readied multiple contractors for builds in its Optimum footprint, and has contractors already lined up to execute on Suddenlink's FTTP buildout plans for 2022, he said.
No to DOCSIS 4.0
Goei noted that Altice USA took a cursory glance at DOCSIS 4.0, the emerging multi-gig platform for hybrid fiber/coax (HFC) networks, but believes FTTP is the optimal choice with respect to performance, OEM (original equipment manufacturer) support, anticipated operational expenditures and R&D costs.
"We continue to be driven by the herd mentality that fiber is the technology of choice for anyone investing significant amounts of capital into the ground to upgrade a network or to deploy a new network," he said. "We just don't believe that the isolated US market can continue to drive a very US-centric technology. Even the DOCSIS networks in a European context or around the world are all driving themselves to fiber as well."
Mobile also getting a boost
Altice USA is also accelerating investments in and promotions of its Optimum Mobile product as it presses forward with a new converged bundle that combines mobile with home broadband. That move effectively takes a page from the mobile playbooks of Comcast and Charter Communications.
Altice USA hopes those moves will accelerate subscriber growth for a mobile product that added just 5,000 lines in Q4 2021 and ended the year with about 186,000 lines in service.
Goei noted that Altice USA is close to announcing a new MVNO deal with T-Mobile, but didn't reveal any specifics or whether it will include some help with the kind of family plans that Comcast and Charter have assembled in the wake of their revised MVNO agreements with Verizon.
"Wireless is very important to our strategy," he said, noting that the company expects to achieve mobile results that are as good or better than its peers at Comcast and Charter.
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— Jeff Baumgartner, Senior Editor, Light Reading