Using a mix of DOCSIS 3.1 and fiber-to-the-premises (FTTP) upgrades, Altice USA ended the second quarter of 2020 with 1-Gig service available to more than 75% of its footprint, up from just 33% a year ago.
That footprint includes Altice USA's Optimum service area in New York, Connecticut and New Jersey that's being served by a blend of DOCSIS 3.1 and upgraded FTTP networks, and DOCSIS 3.1 in the bulk of its more rural Suddenlink service areas.
In tandem, sell-in of 1 Gbit/s broadband service to new broadband customers in those areas continues to climb – from 13% in Q1 2020 to 24% in Q2 2020.
Update: Altice USA appears to be getting a bit of a boost here by how it's marketing 1-Gig to newcomers. In both the Suddenlink and Optimum footprints, Altice USA is currently marketing 1-Gig service for $75 per month "for life," with no annual contract. Of note, the DOCSIS-powered version of the 1-Gig product is for downstream (paired with a 50 Mbit/s upstream), while the FTTP-based version of that tier is a symmetrical service (940 Mbit/s down by 940 Mbit/s up), according to the small print.
"We remain very excited about the 1-gig opportunity," Altice USA CEO Dexter Goei said on today's earnings call.
Although the COVID-19 pandemic slowed its FTTP deployment in Q1, Altice's FTTP network covered about 900,000 homes by the end of the second quarter. Altice USA also added a triple-play bundle (voice, video and data) to its FTTP offering earlier this month.
Due in part to stay-at-home orders during the pandemic, the average data usage per customer in Q2 climbed 59% year-over-year, to more than 440 GB, and up to 550 GB among the company's broadband-only customers. Streaming video traffic, up 46% year-over-year, remains the biggest driver of data usage growth, Goei said.
Altice USA has also seen average speeds rise as 1-Gig coverage expands – reaching an average of 242 Mbit/s in Q2 2020 versus 204 Mbit/s in the year-ago quarter. However, two-thirds of Altice USA's broadband base still takes speeds of 200 Mbit/s or less, giving the company a "meaningful opportunity" to upgrade them to faster speed tiers, Goei said.
Altice USA has also been expanding its footprint through a mix of M&A (including the recent acquisition of Service Electric Cable TV of New Jersey and its 30,000 subs) and an acceleration of network "edge-outs." The company estimated that it has expanded its network reach to an additional 130,000 homes over the last 12 months (through June 2020), adding that it is also exploring other footprint expansion prospects like the Rural Digital Opportunities Fund (RDOF).
Like other US MSOs, Altice USA saw strong growth in residential broadband, netting a record 70,000 new subs in Q2, compared to just 13,000 a year ago. Adjusting for programs such as the FCC's Keeping Americans Connected Pledge and non-pays linked to a pandemic-related order in New Jersey, residential net adds would have been about 53,000 in the period, but still would have represented a quarterly record in the category.
The pay-TV division continued to struggle, as Altice USA lost 35,000 subs in the period, widened from a loss of 21,000 a year ago. Those losses would've dropped to 43,000 subs without the FCC pledge and New Jersey non-pays factored in.
Business services revenues rose 2.2%, aided by growth in both enterprise/carrier and the small and midsized business segments. Notably, Altice USA is in the process of selling almost half of its fiber-based, enterprise-focused Lightpath business to Morgan Stanley Infrastructure Partners.
Altice Mobile, a product launched last September based on an MVNO deal with Sprint (now part of T-Mobile), added 34,000 lines in Q2 (slowed from 41,000 adds in Q1), boosting the grand total to 140,000.
Altice Mobile, which had cut back sales and marketing spending during the pandemic, has also reinstituted a $20 per month/line temporary price, citing improved economics for digital onboarding of new customers.
- Altice USA adds 70K broadband subs, loses 35K pay-TV subs in Q2
- Altice USA to sell a big piece of Lightpath
- Altice USA CEO defends FTTP game plan
- Altice USA lays off 'small percentage' of workforce
- Altice Mobile debuts $20 per month 'price for life' to Optimum and Suddenlink subs
- Altice USA closes Service Electric Cable TV deal
— Jeff Baumgartner, Senior Editor, Light Reading