Altice USA set lofty targets for its broadband business, with CEO Dexter Goei stating it was pushing to launch a 10 Gbps service within the next 18 months while also ramping expansion and upgrade activity across its Suddenlink and Optimum footprints.
Speaking during a MoffettNathanson investor conference, Goei said the company was “really looking forward” to offering “up to 10 gigs next year at some point.” He expressed optimism it could avoid that timeline slipping into 2022 despite a global semiconductor shortage.
“It’s all about the chipsets with the modems,” he explained. “But if you get your orders in early enough, I think we’ll be ready on that.”
Goei said the company is also focused on “driving incremental volume growth” through a combination of network edge outs and upgrades within its existing footprints. Historically, the CEO said Altice USA has been running at a pace of between 50,000 to 75,000 edge outs per year in its Suddenlink coverage area and 20,000 to 30,000 in its Optimum footprint. It is now looking to boost its total edge out figure to as much as 150,000 “over the next couple of years, so we’re overall trending toward edge outs and new homes in the 150,000-200,000 range for the foreseeable future,” he said.
Altice USA recently noted it offers 1 gig service to 92% of the homes it serves, but Goei said around 400,000 homes within its Suddenlink footprint can’t yet tap into those higher speeds. He added it is aiming to upgrade between 250,000 to 300,000 of those in the back half of 2021 and tackle the balance in early 2022. “Speed upgrades are critical,” he said. “People want the top speed.”
The CEO continued “the math will suggest” those three things – multi-gig capabilities, edge outs and upgrades – will propel Altice USA “to much higher levels of customer volume numbers as they cascade one after the other over the next couple of years.”
While some of its existing customers are proactively migrating from coax to fiber in areas where it is now available, Goei said Altice USA has yet to push such activity since that is an “expensive capex exercise.” However, “once we start getting a lot more volume drivers and getting a lot more efficient on the install process, we’re going to start aggressively migrating people.”
Goei also delved into the company’s wireless MVNO effort, noting it was initially crippled due to its attachment to Sprint’s “underperforming network” and a range of IT, device and channel strategy issues. He noted “we were seeing extremely high levels of churn because of network performance,” but added that’s rapidly been changing since it was onboarded to T-Mobile’s network in the wake of the carrier’s merger with Sprint.
“That is behind us, I mean not all of the churn is behind us, but we’ve been re-homed on the T-Mo network now since the fourth quarter. In the beginning of this year, our churn rates have come off 20, 30%, and every month and every week I look at the numbers and they’re coming down,” he said.
Altice USA continues to make adjustments to its wireless product, with Goei noting it recently tweaked pricing, but isn’t yet heavily promoting it.
“I want to get all the kinks out of our business, if there are any kinks left, before going out on a bigger marketing campaign,” he explained.
“Today, I think you should expect us to be focused on profitability, and not necessarily on volume, and making sure all the technical sides of the equation are working well. And then at some point in the near future we will go out and be more aggressive on the marketing side,” he said, adding it was targeting a push in Q4.