Altice USA reports narrow 1.2% revenue growth as Starz dispute took toll in Q1

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A nasty dispute with Starz and competition from Verizon took a toll on Altice USA's Optimum growth in the first quarter. (Newsday)

Altice USA reported narrow revenue growth of 1.2% to $2.33 billion in the first quarter, with a testy program licensing dispute, as well as several debilitating storms, taking a toll on residential sales during the period. 

Revenue in the cable company’s Optimum footprint increased by only 0.6%.

Pay TV customer losses totaled 30,000, an improvement over the 35,000 lost in the first quarter of 2017, thanks to an improvement in the Suddenlink footprint. And residential broadband subscribers kicked up by 26,000, compared to 40,000 in the year-ago comparable period.

However, residential average revenue per user increased only 0.5% year over year to $139.60.

Altice USA’s business services unit grew revenue by 4.3%, boosted by its enterprise and carrier segment. Other first-quarter highlights included advertising revenue growth of 5.1%, supported by investment in multiscreen and national targeted audience capabilities. 

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Notably, Altice announced that the deployment of its Altice One residential broadband and video platform has reached 100,000 users across the Optimum footprint. As the Long Island-based cable operator continues to deploy the platform, it will increase ARPU, Altice says, with Altice One users paying, on average, $10 more a month for their bundle. 

For their part, the numbers didn’t defy the expectations of analysts. Earlier this week MoffettNathanson analyst Craig Moffett noted, “A rough-and-tumble programming dispute with Starz—the early part of the quarter saw heavy rotation of marketing messages from Verizon telling customers to switch—will likely have pressured subscriber metrics at legacy Cablevision. Later, Stars was added back … with a predictable programming cost step-up. And the return of Viacom (at Suddenlink) will, in a carryover from Q4, pressure margins at legacy Suddenlink.”

Altice, which entered into an MVNO agreement with Sprint last year, said it’s busy readying for an upcoming mobile launch by upgrading its core network and connecting to Sprint’s microsites. 

“We’re ahead on our densification effort,” Altice USA CEO Dexter Goei said. “We’re ahead of where we thought we’d be relative to when we signed the agreement.” 

He added that the agreement will not be impacted by the pending merger of Sprint and T-Mobile.