Altice USA Expects to Bring 'Major' OTT-TV Player to Set-Top Platform
Altice USA hopes to announce a set-top box integration deal with a "major player" from the virtual MVPD sector in the next several months, CEO Dexter Goei said in a conference call with reporters tied to the company's Q4 2018 results.
Altice USA, which has previously expressed interest in integrating more OTT services with its Altice One platform, is in discussions and will be looking to add more of the "fully-distributed and attractive platforms, including vMVPDs," Goei said. Altice One is already integrated with popular OTT services such as Netflix and YouTube.
The operator hasn't announced any virtual MVPD partners, but there are lots to choose from -- Hulu, YouTube TV, Philo, fuboTV, DirecTV Now, Sling TV, and PlayStation Vue among them.
Goei said Altice USA would be looking at revenue-sharing models that work for both sides.
"Our perspective is you can't just reverse the trends out there," Goei said with respect to the ongoing cord-shaving/cord-cutting trend. "You can't put the toothpaste back in the tube. You've got to offer your customers the most choice and the best customer experience."
Altice USA, which has deployed Altice One to about 300,000 unique customers, did see an improvement with pay-TV as it lost 15,000 video subs in Q4 2018, compared to a loss of 25,000 subs in the year-ago quarter. Goei said the company added video subs in its Suddenlink footprint for the first time in four years, noting that he believes that most of those gains came from consumers defecting from satellite TV.
Goei added later that Altice One is also looking at offering a "variety of in-house OTT platform-types of packages," but is wary of offering "me-too" skinny bundles given the already large number of such packages that are on the market.
Goei said Altice USA is on track to launch a mobile service (via its MVNO deal with Sprint) in 2019. He said Altice USA has completed the development of its core network support for that "infrastructure-based" MVNO deal, including upgrades and expansions of its WiFi network and the deployment of about 19,000 AirStrand small cells with Sprint. Altice USA is also testing the billing system, working on handset integrations, and focusing on the "buy-flow" systems for its e-commerce site and other distribution channels.
Altice USA still isn't ready to detail how it will price and package that mobile service, and whether it might use it to drive broadband subs, like Comcast is doing with Xfinity Mobile, or form a new type of triple-play bundle, as Charter Communications is with Spectrum Mobile.
"There are not thousands of different parameters to play with; just really a handful," Goei said, adding that Altice USA is evaluating the pros and cons of the models it is studying.
On the broadband side, Altice USA added 22,000 subs in Q4 2018, in line with the 25,000 it added in the year-ago quarter.
Business services revenue grew 5.3%, and Altice USA did not announce anything today with respect to rumors that it would be pursuing a possible sale of its fiber-based Lightpath unit for larger commercial customers.
Goei said the average speed from its broadband base is up 42% year-on-year, to 181 Mbit/s, with average data usage climbing 25% to 250 gigabytes. About half of the company's broadband customers take speeds of 200 Mbit/s or more.
Altice USA continues to deploy symmetrical 1-Gig service on its growing FTTP footprint in parts of Long Island, New Jersey and Connecticut, with a path to 10-Gig, and plans to launch 1-Gig on its HFC plant in the next few months, Goei said.
Total Q4 revenues rose 4%, to $2.45 billion, aided by a mix of residential, business and ad revenue growth, meeting guidance, while revenue growth for the full-year rose 2.8%.
2018 capex was $1.15 billion, in-line with guidance of less than $1.3 billion.
- Altice USA Might Sell Lightpath Unit – Cowen & Co.
- Altice One Levels Up
- Altice USA's Mobile Service to Be 'BYOD-Heavy'
— Jeff Baumgartner, Senior Editor, Light Reading