Altice USA is finding its stride with its new business services unit as fourth-quarter revenues rose 5.5% to $331 million, with the small to medium business (SMB) segment becoming a dominant driver.
The SMB segment, which represents about two-thirds of Altice’s total business revenues, grew 7.5% during the fourth quarter.
“Business services is growing in mid-single digits,” said Dexter Goei, chairman and CEO of Altice USA, during the company's earnings call, according to a Seeking Alpha earnings transcript. “Although if you look at the SMB market, it is growing faster than this.”
Enterprise and Carrier revenue also had a good quarter, jumping 3.5% year-over-year. Within the overall business segment, Optimum had 263,000 and Suddenlink had 109,000 SMB customers as of the end of 2017.
Goei said that by purchasing Cablevision, which came with its Lightpath division, Altice has a more established network in its regions over other cable MSOs that came into the business game later.
“Proportionally, we have a larger Enterprise & Carrier business than many of our peers, mainly due to the Lightpath business we inherited from Cablevision,” Goei said. As a reminder, Lightpath provides enterprise-grade fiber connectivity bandwidth and managed services to enterprise customers, which we market as Altice business.
Indeed, a big element that Altice brings to the business service table is fiber. Altice USA’s network currently consists of 19,500 miles across 21 states including a mix of hard-to-reach rural areas, and the dense New York City area. Additionally, the cable MSO has over 14,000 on-net fiber locations and over 191,000 near-net buildings nationwide.
But fiber is only one part of the business service equation that Altice can play up for SMBs and larger enterprise customers. Being a cable provider, Altice can also leverage its sizable HFC plant to deliver 1 Gbps speeds to businesses—a strength that makes it a greater competitive threat to telcos in areas where they don’t offer fiber-based solutions.
Goei said that as of the end of 2017, Altice equipped a larger portion of its business and residential customer base with 400 Mbps and 1 Gbps speed services.
“Up to 400 Mbps broadband speeds were available for 86% of Altice USA residential/business customers by the end of 2017, including 95% of the Optimum footprint, with 72% of the Suddenlink footprint now able to receive up to 1 Gigabit speeds,” Goei said.
Altice’s business services unit has been going through an internal brand and organizational transformation. In July, Altice USA consolidated its acquired business services divisions from Cablevision and Suddenlink into one unit called Altice Business.
The new group includes the assets of the erstwhile Cablevision’s Lightpath and Optimum Business units, as well as Suddenlink Business. It serves over 375,000 business across 21 states. As part of this restructuring, Altice Business also offers a series of managed Wi-Fi and cloud backup services across the company’s 21-state footprint.