Altice USA lost 28,000 video subscribers in Q3

Altice One interface
Altice One (Altice USA)

Altice USA lost approximately 28,000 video subscribers across its Cablevision and Suddenlink footprints during the third quarter, a slight improvement over the 32,000 it lost one year ago.

Including broadband and telephone services, Altice USA posted net losses of 5,000 customer relationships. At Cablevision, the company said the losses reflected normal seasonality but were slightly higher than one year ago due to the timing of the recent rate event. At Suddenlink, overall customer relationships grew by 2,000.

The company’s residential revenue grew 2.4%, business services revenue grew 6% and advertising revenue grew 37.8%. Overall, the company’s revenues rose 4.1% to $2.42 billion and adjusted EBITDA grew 5.8% to $1.07 billion.

Altice USA CEO Dexter Goei said the quarter was his company’s best yet.

“We are delivering on our differentiated investment thesis anchored in infrastructure-based investment to future-proof our business, to enhance the customer experience and services offered, and to reduce costs over the long-term,” said Goei in a statement. “This is demonstrated by having just completed the initial launch of the Altice One entertainment platform, launching fiber (FTTH) broadband services and progressing very quickly with preparations for the launch of Altice Mobile in 2019.”

RELATED: Altice USA cuts Q2 video subscriber losses down to 24K

New Street Research analyst Jonathan Chaplin said revenue and EBITDA growth beat expectations and that guidance suggested EBITDA for 2018 could be higher than expected.

“While we wouldn’t take anything away from a solid set of results, they weren’t perfect. Subscriber growth is still lacking, with Optimum showing a modest decline in customers while Suddenlink saw a slight improvement. The revenue beat at Optimum was all from advertising and business; residential missed our estimate mostly on lower ARPU (though subs missed too). The beat on EBITDA was likely due to the higher advertising revenue. The benefits of the Altice One Box still aren’t helping subs,” Chaplin wrote in a research note.

Cowen Equity Research analyst Gregory Williams said Altice One will pay off eventually.

“The Altice One rollout should further stem the tide of OTT pressure as mgmt. contemplates adding vMVPD’s to the platform, rightfully focused on the broadband-first 'connectivity' strategy,” Williams wrote in a research note.

Altice USA said that Altice One has now reached more than 200,000 unique customers and that current run rates show it adding 100,000 per quarter.