Altice USA is poised to start delivering gigabit-speed fiber to the home broadband services to New York-areas Optimum customers as soon as the third quarter, company CEO Dexter Goei told media and telecom investment analysts.
"We've already started to do the physical upgrade of the network out here in in the State of New York," Goei said during parent company Altice NV’s first-quarter earnings call Thursday. "We've already got 75,000 homes passed, which are designed and architected, so those are the first ones we're hitting. We've actually got about 5,000 homes, which would be ready to market if we were ready to market them."
Altice USA is taking a maverick approach to its “Optimum” footprint, which it acquired last year when its European parent closed on its $17.7 billion purchase of Cablevision. Altice is bypassing a DOCSIS 3.1 buildout in favor of FTTH, aiming to provide the entire Optimum footprint, and part of that belonging to Suddenlink Communications, with FTTH-based 10-gig symmetrical speeds by 2020.
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Notably, Altice’s capital expenditures were down significantly in the U.S., with capital expenditure declining 24% year over year at Optimum and 35% at Suddenlink.
"We're going to maintain the same capex budget envelope that we're spending today,” Goei said. "We don't think we need to increase that. You have to remember that we are doing last-mile upgrade as opposed to end-to-end fiber-to-the-home build-out.”
Speaking on a wide variety of topics, Goei also said Altice is considering entry into the U.S. wireless market and would not be necessarily opposed to doing it the same way Comcast and Charter Communications are—via mobile virtual network operator (MVNO) deal.
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“We’ve also been very public about saying that we are going to take our time to see what type of wireless offering we want to do and what type of form it will take,” Goei said. “We said on our last earnings call that we would have discussions around MVNO. Longer term, are we interested in more fixed infrastructure? I think it’s unclear. We are very much in line with our cable brethren here in terms of taking our time to evaluate what our options are on wireless.”
Meanwhile, with Altice reporting first-quarter losses of 35,000 pay-TV customers across its Optimum and Suddenlink footprints, Goei said he was hopeful that U.S. rollout of Altice’s hybrid video set-top, modem and Wi-Fi router, dubbed simply as “The Box,” will spark the company’s video business.
The company will begin rollout of the device within the Optimum footprint next month, with Suddenlink customers gaining access later this summer. Both Comcast and Charter have seen improvements in their video metrics with the introductions of fancy new video systems (although Charter’s gains are masked by churn in its acquired Time Warner Cable footprint.)
Will Altice experience a similar turnaround? Goei told analysts to wait until the fall.
"Let's see what the numbers look like then," he said.