With the integration of its two new US cable properties proceeding as planned so far, Altice is touting higher-than-expected results from the former Cablevision and Suddenlink systems as it seeks to squeeze even greater operating efficiencies out of them.

Altice , which became the fourth-largest MSO in the US with 4.6 million subscribers following its acquisitions of Cablevision Systems and Suddenlink Communications over the past year, reported slightly smaller subscriber losses in the old Cablevision Optimum markets than a year ago and some subscriber gains in the former Suddenlink territories in the third quarter. Overall, Altice USA netted 2,000 unique residential customers as broadband subscriber gains more than offset video subscriber losses despite seasonal challenges in Optimum's New York market.

The improved third-quarter results came on the heels of Altice USA's stronger operating results in the second quarter, when it completed its $17.7 billion purchase of Cablevision after buying a controlling stake in Suddenlink for $9.1 billion last December. In the spring, Optimum and Suddenlink both posted better subscriber metrics than they did a year earlier. (See Altice Boasts US Cable Progress.)

Just as importantly for Altice, the two US cable units generated higher revenue increases in the third quarter as compared to a year earlier, with Suddenlink producing 6.7% growth and Optimum 2.7% growth. In addition, both US units posted higher margins than a year ago, with Suddenlink especially standing out with a 46.4% margin, which ranks among the highest in the US cable business.

"We really think we are striking the right balance here," said Altice USA Chairman & CEO Dexter Goei, speaking on the company's earnings call Thursday afternoon. "We're very focused on continuing to invest in our networks."

As part of that focus, Altice has already started upgrading the cable plant in both the Optimum and Suddenlink markets, adding more fiber to their hybrid fiber-coax (HFC) networks. Due to those upgrades, it has boosted maximum broadband download speeds to 300 Mbit/s for residential customers and 350 Mbit/s for commercial customers in the Optimum areas and continued expanding Suddenlink's Project Gigaspeed in the Suddenlink areas. Goei said 100% of the Optimum network has now been upgraded for the higher speeds while 46% of the Suddenlink network has been upgraded for 1-Gig service.

With those network upgrades in hand, Altice has been aggressively pitching higher-speed broadband plans to customers, with some favorable initial results. The company said 40% of new Optimum broadband customers now opt for packages with maximum speeds of 100Mbit/s or more, up from just 12% when Altice took over in the spring. In the Suddenlnk areas, 56% of new broadband subscribers now take plans with maximum speeds of at least 100 Mbit/s, up from 34% when Altice took over at the end of last year.

But Altice officials conceded that they have not really turned around the core video end of the business yet. Even though both US cable units posted better video subscriber figures for the third quarter than they did a year ago, they both still lost pay-TV customers over the summer months, with Optimum shedding 28,000 subs and Suddenlink shedding 12,000.

To boost its pay-TV competitive positioning, Altice plans to roll out a "new home hub" in both the Optimum and Suddenlink territories next year. Goei said the company will likely start deploying the new set-top box, which boasts a much improved user interface, in customer homes sometime next spring after testing it in employee homes during the first quarter.

"We're so focused on delivering the Home Hub as quickly and efficiently as possible," Goei said. "We have as much priority on the video side as on the data side."

— Alan Breznick, Cable/Video Practice Leader, Light Reading