Altice USA Downplays Verizon's 5G Broadband Threat
If Altice USA is worried about Verizon's new 5G Home service as a credible threat to its in-home broadband service, it's certainly not showing it.
"It's clear that what Verizon is currently launching is not a standard product today, and it is not necessarily a commercially viable product going forward … and really is in a testing phase today," Altice USA CEO Dexter Goei said on the company's Q3 call. "[W]e don't see a substitution of our fixed-line product coming from 5G."
Still, Altice USA has yet to face much direct heat from Verizon Communications Inc. (NYSE: VZ)'s new fixed wireless product, which promises speeds of about 300 Mbit/s starting at $50 per month. Verizon launched its home-brewed 5G Home service in portions of Houston, Indianapolis, Los Angeles and Sacramento in October. (See Verizon's Home-Grown 5G Arrives Today and Verizon Restructures in Bid for 5G Growth.)
Altice USA added 14,000 residential broadband subs in Q3, in line with analyst expectations. However, it added just 2,000 broadband subs in its legacy Optimum (former Cablevision Systems) footprint, where it competes head-on with Verizon.
Goei noted that some 80% of Altice USA's gross broadband adds now take speeds of 200 Mbit/s or higher.
With respect to the network, Altice USA has soft-launched its FTTP network in "select areas" of Long Island, delivering a symmetrical 1Gbit/s service, and putting Altice on a path to 10 Gbit/s, the exec said. Altice USA is also starting to employ DOCSIS 3.1 as a gap-filler for 1-Gig service on its HFC plant. (See Altice USA Begins Fiber Buildout.)
Goei likened D3.1 as a "stop-gap investment" to "plug the hole in our product roadmap for the next couple of years, as we roll out fiber-to-the-home across the entire footprint of Optimum."
On the video front, Altice USA lost 28,000 subs (improved from a loss of 33,000 in the year-ago period), but made progress with Altice One, its all-services gateway platform. Goei said the MSO has deployed Altice One to about 200,000 customers, and has ramped up to about 100,000 additions per quarter. A software update to that platform will enable a new "out-of-home DVR" offering in the coming weeks, Goei said. (See Altice USA Embraces Home-Alone Strategy.)
Altice USA is still on track to launch a mobile offering in the first half of 2019 using its MVNO deal with Sprint Corp. (NYSE: S), and Goei reiterated that the MSO is currently running tests in the emerging, shared CBRS spectrum band. (See Altice USA Gears Up for Trio of CBRS Trials.)
Altice USA posted Q3 revenues of $2.42 billion, up 4.1% year-over-year.
— Jeff Baumgartner, Senior Editor, Light Reading