Altice USA posted year-over-year declines in both revenue and profit in Q1 2022, driven primarily by a slide in residential revenue stemming from substantial broadband and video subscriber losses. Despite this, CEO Dexter Goei remained optimistic about its prospects, stating on an earnings call it expects the benefits of its fiber growth initiative to kick in later this year.
Revenue fell 2.3% to $2.4 billion, with residential revenue specifically down 3.6% to $1.9 billion. Net income fell to $196.6 million from $274.1 million the year prior. The operator lost 13,000 residential broadband customers, compared to a gain of 12,000 in Q1 2021, and shed 74,000 video subscribers. The results marked Altice’s third consecutive quarter of broadband net losses.
On the call, though, Goei said Altice is confident it will return to broadband growth in the back half of 2022, as it ramps its fiber expansion and rolls out new multi-gig services and bundles.
The operator previously outlined plans to blanket two-thirds of its footprint with fiber by 2025. It added 146,000 new fiber passings in Q1, expanding its reach to 1.32 million, and added 11,000 fiber subscribers to hit a total of 81,000.
Goei said it expects to be “fully fiberized in Connecticut by the end of this year” to head off a competitive threat from Frontier Communications there. While it recently ran up against a “big permitting issue in the State of New York” that stalled its fiber progress there, Goei said it now believes that problem “has been solved.” All told, the CEO said it remains on track to reach 1 million new passings this year.
Altice USA is currently averaging between 5,000 and 6,000 fiber net adds per month. Goei noted it’s aiming to “double that as quickly as possible.”
“We expect incremental growth on fiber passings to meaningfully step up in Q2 and Q3, following our increased investment and given the spring and summer months are more conducive to construction and deployment with the better weather,” he stated. “We are now starting to ramp up on existing customer migrations, which when combined with the rapidly expanding FTTH footprint, will lead to an improved churn and faster customer growth.”
But analysts at New Street Research highlighted concerns around Altice USA’s pricing strategy.
“One thing gives us pause: Altice already has the lowest pricing in the market,” they wrote. “If they are having a hard time attracting enough subscribers at aggressive promotional prices to grow, we wonder how much more difficult it will be when prices reset by $20 once the promotional period ends.”