Altice USA said it is rebranding its wireless service across all its business units under the Optimum Mobile name, a move the company said is the first step in the transition to one consumer brand across all its connectivity products. 

The switch to Optimum Mobile will officially occur on July 25. Altice had branded the wireless service, offered via a mobile virtual network operator (MVNO) agreement with T-Mobile, across the country under the Altice Mobile brand. Its cable and broadband services are branded as Optimum in its metropolitan New York area markets and under the Suddenlink Communications name in its West and Mid-Atlantic states. Altice USA operates in 21 states across the country.

“Today’s consumer demands reliability, speed and ubiquity when it comes to connectivity,” Altice USA president of telecommunications and chief operating officer Hakim Boubazine said in a press release. “As we unify our brands under one Optimum brand, we will deliver on our promise to provide a consistent and reliable converged connectivity experience to all our customers inside and outside the home.  So, whether it’s Gigabit speed internet service or Optimum Mobile service, customers can expect the most reliable coverage and speed wherever they are.”

The move also comes days after the company launched Optimum Stream, a 4K-capable Android TV device that is free to its 1 Gigabit-per-second broadband-only customers. 

Altice USA first came on the U.S. cable scene with its $9.1 billion purchase of  Suddenlink Communications in 2015. It purchased Cablevision Systems, which originated the Optimum brand, in 2016 for $17.7 billion. 

Cable wireless service is growing into its own.

In the four years since Comcast pulled the trigger on what was to be the fourth attempt by a cable company to crack the wireless nut, Xfinity Mobile has been a growth engine, accumulating 3.9 million customers since April 2017. In the first quarter of this year, Xfinity Mobile achieved cash flow break-even, setting the wireless business on a course well beyond the early notion that it would be a backup to plans from more established carriers. Analysts and executives alike are taking notice, predicting that wireless could be a strong competitor in the market, especially if paired with broadband.

“Cable wireless is ready for its star turn,” MoffettNathanson principal and senior analyst Craig Moffett wrote in a research note. Moffett, whose earlier take was that cable wireless is more of a retention tool for other services, now sees the product as a potential profit center. 

Comcast is currently the cable industry’s largest wireless provider and Moffett expects its lead to grow over the next four years. Moffett expects Xfinity Mobile to be close to breakeven in 2021, generating about $12 million in negative cash flow, and to turn profitable in 2022.

Aggressive Pricing a Plus

Moffett’s enthusiasm comes primarily from Comcast’s decision earlier this year to aggressively price wireless service. Comcast now substantially undercuts Verizon Communications and AT&T for unlimited mobile data across all plan sizes, according to Moffett, making the product competitive for a vastly larger portion of the market. 

Charter Communications followed Comcast, launching Spectrum Mobile wireless service in June 2018. That offering also is flirting with profitability, but chief financial officer Christopher Winfrey said Charter is more concerned with adding subscribers.

“Our goal isn’t to drive short-term EBITDA profitability,” Winfrey said on Charter’s Q1 earnings call. “Our goal is to drive as much growth as we can, because we know what the underlying profitability is and what it does for the overall business.”  

Spectrum added about 300,000 wireless lines in Q1, raising the total to about 2.7 million subscribers. 

Moffett estimated Charter’s mobile service would be profitable by 2024 as capital expenses decline. 

Charter said its wireless business is finally hitting stride, fueled by competitive pricing, reliable service and the ability to bundle mobile with broadband.  

According to researcher Parks Associates, about 19% of U.S. broadband households bundled high-speed data with wireless in Q1 2021. That’s up from about 15% in Q1 2020. With the number of broadband-only homes on the rise — Parks said 41% of households now take unbundled, standalone broadband service, up from 33% in 2018 -— the opportunity to sell mobile service to those households is increasing.   

At the JP Morgan Media & Communications conference in late May, Winfrey suggested wireless customers could eventually number about half the level of broadband subscribers, currently at 29.2 million. 

“I don’t think people took us seriously when we came into the voice market,” Winfrey said, adding that today, Comcast and Charter are the largest wireline phone service providers in the country. “And the way we did it is, because we weren’t the incumbent, we had the ability to save customers money, we had the ability to bundle it, and as a result we took down phone pricing dramatically across the entire industry and the entire U.S. 

“Over 20 years, we became the largest operators,” Winfrey continued. “At its peak, you could almost count as clockwork that voice subscribers would be about half of broadband and if it hadn’t been for mobile substitution, those numbers were continuing to increase. I think our opportunity is at least that.” 

Charter has been growing broadband at a 7% annual rate over the past three years and its wireless customers have doubled over the past two years. Continuing that pace, the wireless segment would reach about 15 million customers by mid-2023. 

That might be a bit optimistic, as Moffett predicted Charter would reach 7.2 million wireless customers by 2025. But many analysts anticipate Charter will add about 1.1 million mobile customers annually over the next few years. That pace would lead to nearly 15 million wireless customers by 2030.

At the JP Morgan conference, Winfrey said Charter does not view wireless as a standalone product but rather as an extension of broadband service. He said all Spectrum sales channels are required to sell wireless with other products.

While Charter won’t commit to a date when the wireless business will be profitable, Altice USA, which launched Altice Mobile service in September 2019 under a very aggressive pricing structure ($20 per, line per month for unlimited service for life), has since revamped that pricing. At the Credit Suisse conference, Altice USA chief financial officer Michael Grau said after a brief hiccup mainly around onboarding issues, the mobile product was beginning to hit stride in 2020 when the pandemic halted growth because retail stores shut down. The hiatus also forced Altice USA to take a hard look at the wireless business’s gross profit and churn metrics.

Altice Rethinks Pricing

“In the latter half of 2020, we offered 1 [Gigabyte] and 3 [GB] plans to supplement our unlimited plans, and we did right-size some of our pricing,” Grau said. “We’re starting to solve the gross profit problem; we’re no longer taking on customers that are generating negative gross profits.”

Altice USA now offers 1 GB data plans for $14 per month, 3GB data plans for $22 per month and unlimited data plans for $45 per month.   

Grau said take rates on the 1 GB and 3 GB products are between 60% and 70%, an encouraging sign. The new pricing also has helped dramatically reduce churn, he said. 

According to MoffettNathanson, Altice Mobile improved churn by 20% to 30% as it moved traffic to T-Mobile’s network in Q4. 

“At the same time a lot of our stores are reopening,” Grau said. “I think we’re very close to getting to the point where we’re saying, ‘I’m comfortable with the gross profit, I think we’ve solved for that; I’m comfortable with churn, I think we’ve solved for that.’ And that’s when we’ll turn up the sales and marketing machine again. I think you’ll see that somewhere in the back half of 2021.”

Because of a late start, Grau said the mobile unit probably won’t see break-even this year.

“We’d like to see it break-even on a run-rate basis as we exit 2022,” Grau said. “I think that’s more realistic.”

While cable wireless continues to hum along, one potential competitor — Dish Network’s Dish Wireless — lurks in the wings. With plans to launch the first market, Las Vegas, in the third quarter, Dish appears to be moving forward with plans for the state-of-the-art 5G wireless network, despite Wall Street skepticism. 

Dish appears to be branding the wireless offering under the “Project Gene5is” name, launching a website under that moniker in June that appears mostly to be a vehicle to gauge interest beyond Las Vegas. The website, which Dish confirmed as its own, promises to notify those who leave an email address and ZIP code when service will be available in their area. A Dish spokesperson confirmed Project Gene5is is from the company but declined further comment. 

“We’ll be communicating to customers as options are available in their area, with Vegas being our first market,” a Dish spokesperson said.

Dish has until June 2023 to make the service available to about 70% of its footprint under a federal mandate. Over the years, pundits have criticized the offering, which Dish has said  it can build for about $10 billion, on everything from time to market (too late) to expected cost (too little). 

Dish Plans Draw Skeptics

JP Morgan media analyst Philip Cusick was the latest analyst to cast aspersions on Dish wireless plans, downgrading the stock to “underweight” from “neutral” while raising his 12 month price target to $45 per share from $38. 

“We can’t find a way but to be skeptical on the Dish story,” Cusick wrote. He said while he has the highest respect for Dish chairman Charlie Ergen and the company, he remains stymied by three major issues: the inherent difficulty in launching a brand new wireless service, Dish’s spectrum disadvantage and the perception the company is too late to the 5G game.

Cusick noted the history of service and quality issues that have plagued wireless newcomers including Sprint, Leap Wireless and MetroPCS.

“Many times these were not issues of money to spend or desire, but simply that getting on the right cell sites can be very hard in areas and take years, if they are even possible,” Cusick wrote. While he noted that Dish has a leg up on previous new carriers by owning low-band spectrum and having a MVNO deal with T-Mobile, those aspects only reduce the challenge. 

Dish, according to Cusick, has about 114 Megahertz of spectrum, far less than its competition. While Dish could buy more licenses in future federal spectrum auctions, Cusick doesn’t believe the company has the money now. Finally, Cusick stated that he worries that Dish missed the boat on 5G, adding that other larger carriers that have already rolled out the technology will accelerate those plans and erase any differentiation Dish would have had by coming to market sooner. λ

Altice USA Today announced a broadening of its wireless tiers, adding 1-gigabyte and 3GB plans to its existing unlimited service. 

Altice Mobile will now offer a plan that limits customers to 1GB of data usage per month, with unlimited talk or text. The tier costs Altice USA subscribers $12 a month (it’s $22 a month for those who don't subscribe to other core Altice USA cable services). 

The operator also introduced a 3GB data plan costing $20 a month for customers ($30 for non-subscribers). 

The operator’s unlimited data, voice and text plan now runs $30 per month per line ($40 for non-subscribers). 

Altice Mobile launched back in September 2019, offering early adopters a lifetime $20-a-month price per line for unlimited service. 

Altice Mobile reduces network speeds to 2G levels when customers exceed these data limits. 

The service was launched by way of a MVNO agreement with the erstwhile Sprint, since acquired by T-Mobile. Altice Mobile added 34,000 customer lines in the second quarter, bringing total deployed lines to 140,000.

“We know that data consumption can vary from consumer to consumer and on a month to month basis," said Hakim Boubazine, president of telecommunications and chief operating officer for Altice USA, in a statement. “Altice Mobile’s flexible data options provide customers more control over their wireless experience with the ability to switch plans based on what makes the most sense for their lifestyle while always staying at an attractive price.”

April 1 will be no joke for the telecom industry. That’s the day T-Mobile-Sprint is scheduled to complete a two-year odyssey to get its $26 billion merger across the finish line, creating a more competitive and deeper-pocketed No. 3 wireless carrier. But just as the New T-Mobile, as the combined company is tentatively called, bulks up to an estimated 100 million wireless customers, other players are beginning to emerge.

Dish Network is poised to become the fourth-largest U.S. wireless carrier, based on the asset it has agreed to buy from T-Mobile-Sprint as a condition of federal regulatory approval of the latter’s merger. Shortly after T-Mobile-Sprint closes its deal, Dish will buy 9.3 million former Boost Mobile and Virgin Mobile prepaid wireless subscribers. Dish will also gain access to the new T-Mobile network via a seven-year mobile virtual network operator (MVNO) deal, and will spend another $3.4 billion to purchase spectrum from the new entity over three years.

On the sidelines sits cable, which after three failed attempts to break into the wireless business over the past two decades seems to have found the right elements within the past two years. Comcast’s Xfinity Mobile, launched in 2017, crossed 2.05 million subscribers in 2019 and, according to some analysts, is on a path to more than double that base in the next four years. Typically conservative Comcast said it expects wireless to become cash-flow positive by the end of 2021.

Charter Communications, which launched Spectrum Mobile in September 2018, added more than 1 million customers in the past 18 months and expects to be cash-flow positive in 2021.

Those new and stronger players will all have to compete with wireless industry behemoths AT&T (166 million wireless subscribers) and Verizon Communications (120 million wireless customers). Here’s a closer look at how they are expected to stack up.

New T-Mobile

T-Mobile proposed its merger with Sprint in April 2018, a deal it said would allow it to better compete with AT&T and Verizon and introduce new products and services to underserved markets. Along the way, the companies had to clear hurdles set up by a group of state attorneys general, which claimed the merger would result in higher prices for consumers. T-Mobile-Sprint was cleared for takeoff in February, after a federal judge ruled the combination was in the public interest. While other states have said they won’t appeal, including New York state, California Attorney General Xavier Becerra has said he would keep his options open. Most observers believe T-Mobile-Sprint can go through with the closing no matter what Becerra decides.

Just what the new T-Mobile will do after the close is anyone’s guess. But the company has made at least one thing clear: It’s going after cable.

“We’ve said it all along: the New T-Mobile will be a supercharged Un-carrier that is great for consumers and great for competition,” T-Mobile CEO John Legere said in a press release shortly after the federal court decision was announced. “The broad and deep 5G network that only our combined companies will be able to bring to life is going to change wireless … and beyond. Look out Dumb and Dumber [AT&T and Verizon] and Big Cable — we are coming for you … and you haven’t seen anything yet!”

Whatever T-Mobile does in the video space will likely involve its 2018 purchase of Layer3 TV. T-Mobile spent about $325 million for over-the-top multichannel video programming distributor (MVPD) Layer3 TV and launched TVision Home in eight markets in April of 2019. Layer3 has high programming costs (20% to 30% higher than its peers, T-Mobile has said in federal filings) which has made launching the video service difficult.

Legere has said he will step down as CEO in May, after the deal closes, replaced by T-Mobile chief operating officer Mike Sievert. With the merger behind it, Sievert said the new T-Mobile will be able to focus on providing stronger service and expanding its 5G footprint.

T-Mobile-Sprint has pledged to spend about $40 billion over three years on 5G deployment and to expand its rural wireless service to reach 59.4 million homes. It has also promised to deploy a new in-home broadband option to more than 52% of U.S. ZIP codes, with a plan to obtain 9.5 million U.S. households by 2024, with 20% of those homes in underserved areas. The new T-Mobile also expects to build 600 additional retail outlets.

Dish Network

Dish has agreed to purchase T-Mobile-Sprint’s prepaid wireless businesses (Boost Mobile and Virgin Mobile) for $1.4 billion, adding about 9.3 million subscribers shortly after the larger merger closes. Dish will also spend another $3.6 billion on T-Mobile-owned 800 MHz wireless spectrum over the next three years, and will have its own MVNO agreement with the combined company for seven years.

Dish has been relatively quiet about its plans for the wireless service — it needs to build a 5G-capable network available to 20% of the country by 2022, expanding to 70% of the U.S. by June 2023, as per federal mandate. In the past, Dish has spoken of using its wireless capability to accelerate the Internet of Things, but lately the focus has been more on 5G, especially the ability to bring that technology to rural America. Dish has said it expects to spend about $10 billion to build out the 5G network, a figure some analysts have said is too low.

The biggest short-term benefit of the deal for Dish is that it gives it more time to build out its wireless network with its existing spectrum. It had been facing a March 2020 deadline for its network to reach 20% of the country. Now, it has two more years to reach that milestone. The addition of the Boost Mobile and Virgin Mobile subscribers also provides a pool of potential customers for its postpaid business. While prepaid customers churn at a 5% rate, Dish has said migrating those customers over to a more reliable Dish-operated network — both via the T-Mobile MVNO and whatever it builds out — should reduce that churn substantially.

On Dish’s Q4 earnings conference call, founder and chairman Charlie Ergen was reluctant to reveal too much of the company’s wireless strategy, but said the build for 5G service will be on a city-by-city basis.

“There’s obviously going to be some cities that are more interested in getting 5G quickly,” Ergen said. “And those cities that want to work with us will probably get first priority. And then, obviously, when we build out a city, we can have owner economics there. So we don’t have to build — we’re probably not going to build two towers in every city. We’ll build that city by city, and complete a city before we move to the next city.”

Xfinity Mobile

Comcast launched Xfinity Mobile in 2017. Two years later, the mobile service has 2.05 million customers and is evolving from its initial purpose as a retention tool for broadband to becoming a profit center. Comcast chief financial officer Michael Cavanagh has said wireless is expected to be profitable by 2021.

The success of the wireless product can be traced to one tenet: Keep it simple, Comcast senior VP of innovation and customer value proposition Rui Costa said.

“The starting point has always been our connectivity business,” Costa said. “The success attributed to wireless is how well we position it as an additional benefit of our connectivity value proposition. The way we’ve introduced this, as the missing piece of our broadband, has been paramount to the success of this.”

The way Comcast has introduced wireless this time around also is different, Costa said, in that the focus is on the overall customer experience.

“Our product is the experience and the experience is our product,” he said, adding that Comcast has purposefully kept the mobile product as simple as possible, whether it be flexible pricing plans, different data options and even a pay-as-you-go option. The idea is to offer consumers choice without bombarding them with options that are difficult to understand.

Wireless has also proven to be an incentive for customers to keep their broadband service. Like its cable peer Charter Communications, Comcast wireless customers are required to subscribe to broadband.

In 2019, Comcast Cable added 1.4 million broadband customers, its best performance in 12 years. While there are other factors associated with that growth, including the speedy demise of telco digital subscriber line service, at least some of it can be traced to wireless stickiness.

Costa didn’t want to take credit for the rise of broadband, saying there are a lot of factors that could be attributed to its success. But wireless is becoming an increasingly important component of the overall connectivity value proposition, he said.

“The success has been the proof of how well we’re telling the story to consumers and how valuable that has become to them,” Costa said.

Those subscriber increases have helped substantially reduce the mobile unit’s EBITDA, or cash flow, losses. Comcast cut its wireless EBITDA losses by nearly half in 2019, to $402 million from $746 million in the prior year. In Q4 alone, the unit’s EBITDA losses improved by 40%, prompting Cavanagh to predict wireless would be cash-flow positive for the full year of 2021.

Analysts see strong growth ahead for the wireless product: Moffett has estimated that Xfinity Mobile will more than double its subscribers to 5.7 million by 2024.

“The strategy has been, and is and will be, how can we use mobile as a benefit back to our broadband and connectivity business?” Costa said. “It is working because we see a benefit translated in many ways — churn, and attachment of other products. The other is the halo that has been created on the back of this new way of doing business with us.”

Spectrum Mobile

Charter launched Spectrum Mobile in September 2018 and in a little more than a year grew its wireless customer base from virtually nothing to 1.1 million. According to chief mobile officer Danny Bowman, Charter’s recipe for wireless success can be summed up in two words: simplicity and speed.

“We’ve integrated mobile into our core business,” Bowman said. “We introduce mobile into every possible transaction, whether that’s inbound sales or someone walking into our stores. The channels themselves have built a lot of mobile muscle memory and it’s just become part of what we do.”

Charter was also expected on March 6 to launch 5G in 14 cities via its Verizon MVNO. (Comcast also has said it would begin offering 5G handsets on March 6.) Speeds of the service will range from 700 Megabits per second to 1 Gigabit per second. According to Bowman, 5G will be included at no extra charge to Spectrum Mobile’s $45 per month unlimited data customers.

“We already provide the fastest mobile experience from coast to coast,” Bowman said. “This is just another proof point that we’re always going to have the fastest mobile experience for our customers. We’re keeping it super simple. We’re not creating some high premium rate plan that you have to buy. I think it’ll be easy for our channels to sell. You pick a 5G device, you get a $45 rate plan; you pick a 4G device, you get a $45 rate plan.”

Also helping with sales of the 5G product, as well Charter’s other offerings, are the more than 350 Spectrum retail stores with mobile service across the country. More are planned, Bowman said, adding the stores have played a key role in mobile’s success.

The stores are just another choice on a long list of options customers have for buying mobile service, including online, or by making a phone call and having a device or a SIM card shipped to their home.

“We’ve made it really easy for a customer to do business with us,” Bowman said. “Whether you want to say, call, click or visit, we’ve made it very simple and we can be very disruptive because of how we support our customers and what channel they want to use.”

Altice Mobile

Altice USA, the newest cable player on the wireless block, launched its mobile service in September 2019 and finished the year with about 69,000 customers, an initial pace the company claimed was twice that of its peers. The smallest of the three cable players, Altice — with about 4.2 million broadband customers, compared to 28.6 million for Comcast and 25 million for Charter — also has the most aggressive offering. Altice Mobile launched at a price point of $20 per line for life, less than half the $45 per line Comcast and Charter were charging. Altice Mobile has since said it ended that $20 promotion in March, increasing the price to $30 per line for new customers (legacy customers will still pay $20 for as long as they have the service). Still, even at the higher price point, Altice Mobile is cable’s best wireless bargain.

Altice’s ability to keep its prices so low is tied in part to its MVNO deal with Sprint (now T-Mobile). Altice USA CEO Dexter Goei has said its original MVNO deal will remain intact after the merger.

Analysts have pointed to Altice USA’s MVNO as the gold standard for such deals among cable operators. Based on the structure of that agreement, Altice pays less as more and more traffic moves off the MVNO to Altice’s network. Given the architecture of the Altice network, that won’t be as hard as it seems.

Under Altice’s deal, Sprint is allowed to build small cells on Altice’s network. Sprint pays nothing to Altice aside from construction costs. In turn, the cable company gets to ride on those small cells for free. The more cells there are, the lower the cost of the MVNO.

After the T-Mobile-Sprint close, Altice will have access to what Moffett called “a best-in-class network at a disruptively low price. It seems a foregone conclusion that they will attract subscribers. They already believe they can offload enough traffic from the network that they will be profitable even at super-low prices.”

Altice USA added about 69,000 mobile customers in Q4 — about twice the quarterly pace of its peers’ initial offerings — and is expected to end 2024 with 876,000 customers, according to MoffettNathanson, or about 17% of its total broadband base, inline with its larger peers.

At the Morgan Stanley Technology, Media and Telecom conference on March 3, Goei said Altice counts about 100,000 wireless customers, a signup pace about 2.5 times faster than its peers at launch.

Altice USA also will have access to 5G tech through its T-Mobile-Sprint MVNO, Goei added. While 5G could be perceived as a threat to Altice’s own wireless business, Goei said he views it more as an opportunity, especially since the technology is expected to be deployed over time.

“There’s obviously different strategies amongst different operators, but by and large, it’s an opportunity for MVPDs to work with wireless operators, particularly those who want a small cell,” Goei said. “And for those who want to go deep into the residential neighborhoods with fiber, good luck, have fun.”

Q4 video subscriber losses more than tripled to 44,000 from 14,200 in the prior year, and broadband subscriber growth slowed at Altice USA, but the company said it was encouraged by a strong December.

Altice USA said the video and broadband subscriber losses were mainly due to promotional rolloffs. And though its 7,000 Q4 broadband additions came in at less than one-third of the 22,000 it added in the prior year, a late quarter surge proved to be encouraging. Altice said it added about 17,000 broadband subscribers in December, effectively wiping out losses in October and November.  

Residential revenue was essentially flat in the quarter and cash flow declined 2% to $1.1 billion. Altice Mobile, the wireless service the company launched in September, added 54,000 customers in Q4, generating $18 million in revenue.

Related: Altice to Buy Service Electric New Jersey Systems for $150M

Altice said it expects full year 2020 revenue to grow between 2% and 2.5% with capital expenditures of $1.3 billion to $1.4 billion.

“We are pleased to enter 2020 on the heels of an exceptional December performance, across all of our core businesses,” Altice USA CEO Dexter Goei said in a press release. “We are seeing particular strength in broadband as we continue to reap the benefits of ongoing investments in our network, including FTTH and DOCSIS 3.1 upgrades. These remain key priorities as we accelerate our ongoing speed upgrades, which include broad-scale availability of Gigabit services as well as enhanced WiFi performance across the footprint.”

MoffettNathanson principal and senior analyst Craig Moffett wrote in a research note that the broadband gains were better than expected -- consensus estimates were for a loss of 6,000 customers -- and signaled that the promotions-related losses are behind them. But he was less sanguine about the company’s ability to grow revenue and subscribers simultaneously. Altice missed consensus revenue growth targets for the quarter and fell short of full year guidance of 2.5%.

“We have argued in the past that as long as Altice’s broadband unit growth is positive, the market is likely to view their results as ‘good enough,’” Moffett wrote. “Well, growth was positive in the quarter. But, not by much.”

MoffettNathanson analyst Craig Moffett has declared cable operators relevant in the U.S. wireless industry.

Titling his quarterly Wireless Q3 2019 report “Cable Starts to Matter,” Moffett noted that Comcast and Charter Communications have added about 2.5 million mobile subscribers since launching their respective services. Factoring in the nascent Altice Mobile service, cable has accounted for 31% of total U.S. pre- and post-paid additions in each of the last two quarters.

“That market-share gain, which is almost certain to accelerate, has already been enough to alter the competitive dynamics of the wireless industry,” Moffett wrote.

Noting that the interjection of the cable as a competitive dynamic has already started to impact Verizon, AT&T, T-Mobile and Sprint, “AT&T has signaled its willingness to at last become an arms dealer,” the analyst said.

Indeed, AT&T chairman and CEO Randall Stephenson indicated on a recent conference call that his company may become a mobile virtual network supplier, ushering other cable operators into wireless in the same way that Verizon has enabled Comcast and Charter.

Giving Comcast and Charter choice beyond Verizon in the MVNO market would change the game.

Paying Verizon around $3.50 a Gigabyte to use its network, the top two U.S. cable operators are currently constrained in terms of just how aggressive and disruptive they can be. But as other MVNO options enter the market — and Comcast and Charter build out their own infrastructure — the Verizon MVNO deal looks like only a “beginning” for the two companies, Moffett said.

Count Cowen as being particularly bullish about Comcast and Charter’s respective and fledgling consumer wireless services.

Declaring cable-wireless convergence a “‘when' and not ‘if’ story,” the equity research firm sketched out in a note to investors this morning all the different approaches the two companies could take to slowly build out their wireless infrastructure, as they continue to steadily grow the respective Xfinity Mobile and Spectrum Mobile leveraging the continuing economics of their Verizon MVNO wholesale network lease deals.

Cowen’s modeling, based on a variety of data sources, yielded some interesting snapshots and projections of the two mobile businesses.

> Comcast’s Xfinity Mobile, which currently has 1.6 million subscribers, will control around 6% of the U.S. wireless market by 2023 and generate $266 million in earnings before interest, taxes, depreciation and amortization (EBITDA), Cowen predicted.

> Charter’s Spectrum Mobile will generated $201 million in EBITDA by 2023.

> Xfinity Mobile Unlimited subscribers use, on average, 8.75 gigabytes of cellular data each month

> Comcast is currently paying $3.09 per GB of cellular data used on Verizon’s network, Cowen said.

> Around 80% of data used on Xfinity Mobile comes over Wi-Fi.

“We believe that there is a distinct possibility that the MVNO model could be a springboard for cable to build out their own in-footprint networks,” reads the Cowen report, which was lead authored by analyst Gregory Williams. “Cable can lean on the MVNO agreement and build out at a more measured pace, deploying pockets of network, starting with the denser/urban markets with an ‘inside out’ strategy, migrating to a hybrid roaming/facilities-based model (somewhat similar to what Dish could do with New T-Mobile).

“Furthermore, cable could build an SDN/cloud-native network and leverage plant rooftops or MDU’s to deploy cheaply,” the reported added. “We especially find the Comcast set-up as compelling, acquiring 5x5 600 MHz spectrum in 72 markets. We envision Comcast cheaply deploying the 600 on head-end/plant/MDU rooftops for coverage, then add CBRS and Wi-Fi access points on poles and strand mounts for capacity, all backhauled on DOCSIS 3.1 cable plant. If Comcast links networks with Charter at some point, and/or brings Dish into the mix (depending on the T-Mobile/Sprint outcome), even better.”

Williams pointed to Altice USA, which has been steadily building out wireless network infrastructure as it launches Altice Mobile.

“We believe Comcast and Charter are looking at the Altice model, and if proven successful, could also look to migrate to an infrastructure-based strategy and lower their roaming costs,” the report said. 

Altice USA launched its long-awaited wireless service Thursday, a full-featured offering with unlimited text and data over a 4G LTE nationwide network that is aggressively priced.

Altice first announced its intention for the service in 2017, as part of a Mobile Virtual Network Operator (MVNO) deal with Sprint. With the launch of Altice Mobile, existing Optimum and Suddenlink customers in the company’s 21-state footprint can get Altice Mobile for $20 per month with a “price for life” commitment. Non Optimum and Suddenlink customers in or near its footprint -- including New York City -- can get the service for $30 per month.

According to Altice, the average mobile bill in its service territory is about $70 per month, meaning Altice Mobile customers can save as much as $600 per year for one line and up to $1,100 per year for households and families with five lines.

“The advent of Altice Mobile as the newest mobile operator exemplifies our vision to create one converged fiber and wireless network that delivers an ultra-fast broadband and mobile experience to support consumers’ needs inside and outside the home,” Altice USA CEO Dexter Goei said in a press release. “By building a mobile network that will ultimately support 5G combined with our state-of-the-art fiber broadband capable of more than 10 Gigabit speeds, Altice USA is creating a formidable and powerful network to deliver superior connectivity and simplified customer experiences.”

“Altice Mobile harnesses the power of our advanced networks to address the needs of today’s consumers, who demand seamless and ubiquitous connectivity, a frictionless experience, and the latest technologies and devices, all at an unbeatable value,” said Hakim Boubazine, Altice USA co-president and chief operating officer in a press release. “With one unlimited mobile plan and loyalty pricing, Altice Mobile gives customers the flexibility and freedom they want, providing a truly innovative, simple and holistic connectivity experience over a blazingly fast nationwide network. We’re also very proud to expand Altice Mobile outside our customer base and give even more people a taste of Altice’s great innovations and services.”

With the offering, Altice joins other cable operators Comcast (XFinity Mobile) and Charter (Spectrum Mobile) in the wireless communications business. And while those offerings were aggressively priced (XFinity costs Comcast customers $45 per month with Charter customers paying the same for Spectrum Mobile service), Altice Mobile enters the market at a price point that is less than half of those offerings. Still, Goei insists that the pricing is not an attempt to grab market share.

On a conference call with reporters to announce the launch, Altice USA CEO Dexter Goei said while the pricing may appear to be aggressive, the cable operator is not planning to operate the mobile business at a loss. While other cable companies have weathered losses from their wireless offerings, which for the most part have been a retention tool for broadband and cable customers.

Related: Spectrum Mobile Adds 208K Lines in Q2

“We are not pricing this at a negative gross profit per customer,” Goei said on the call. “We intend to make this very profitable going forward. Obviously the margin profile is different than our core telecom business, but today pricing in the market we feel is probably not as attractive as it can be. We feel that we can offer our clients a different experience and a different price point while at the same time providing them with a lot of savings and great service. We are not pricing this to lose money nor to gain market share. We’re pricing this as a standalone product that we think we can make very attractive economics on.”

Goei added that the Altice USA expects Altice Mobile to be profitable in about 12 months.

Related: Moffett: Cable Needs a Better MVNO Deal 

Altice Mobile utilizes the cable company’s own fiber network and the mobile core structure of Sprint (which is in the throes of a merger with T-Mobile USA). The network also will be complemented by Altice USA's recently signed national roaming contract with AT&T, which should fill in some holes where Sprint doesn’t currently offer service. The mobile service will evolve to offer 5G services when they become available.

Related: Altice Floats Price for Life Offer

Here’s a rundown of the key features of the product:

• One Unlimited Data, Talk & Text Plan

Includes data, talk and text as well as unlimited mobile hotspot, unlimited video streaming, and unlimited international usage when traveling in or contacting people in more than 35 countries, including Canada, Mexico, Dominican Republic, Israel, most of Europe, and more.

• Pricing

Altice Mobile is $20 per line per month for up to five lines for Optimum and Suddenlink customers; $30 per line per month for consumers in or near the company’s footprint who are not Optimum or Suddenlink customers.

• Easy Sign-Up

Altice Mobile features online sign up, activation and digital customer care. Customers can message Altice Mobile experts online with questions and get all their account information on alticemobile.com.

• Bring Your Own

Consumers can bring their own phone to Altice Mobile. Additionally, eligible Optimum and Suddenlink customers can purchase the latest smartphones, including phones from Apple, Samsung and Motorola, at Optimum and Suddenlink retail stores where they can choose between paying in full or via zero-down, zero-interest, 36-month financing.

• Nationwide Coverage

Altice’s nationwide 4G LTE network, complemented by the company’s fiber network, two million WiFi hotspots and T-Mobile-Sprint’s mobile core infrastructure provides seamless, reliable 99% nationwide coverage.

• No Overages or Contracts

Altice Mobile has no data limits and no annual contracts.

Altice USA said its new mobile service has completed its employee testing and is ready for a commercial launch “this summer.”

Reporting 3.7% second-quarter revenue growth to $2.45 billion, the Bethpage, N.Y. cable operator highlighted the imminent launch of its new mobile service, and explained to investment analysts just how it will function now that its major MVNO partner, Sprint, has been purchased by T-Mobile.

Pending regulatory conditions and commitments, Altice USA’s MVNO deal with Sprint will be “expanded” into a seven-year wholesale agreement to utilize T-Mobile’s wireless network, including T-Mobile’s emerging 5G infrastructure.

Related: Report: Altice USA Close to Selling Lightpath Stake

The MVNO deal extends through the life of the seven-year consent degree, laid out in T-Mobile’s agreement with regulators to buy Sprint for $26 billion. According to Altice USA CEO Dexter Goei, the merger effectively extends Altice Mobile's MVNO deal three more years beyond the expiration of its legacy Sprint MVNO agreement.

That, according to Goei, gives Altice “three more years” to think about a future in which it moves beyond MVNO arrangements, building out its own wireless infrastructure.

“And the expansion organically or inorganically, will allow us to market to more geographies,” he noted.

Goei said Altice USA is pleased with how its MVNO situation shook out amid the processes with the FCC and U.S. Justice Department. He cautioned that arrangements could change at the state attorney generals level. 

Beyond the T-Mobile MVNO deal, Altice Mobile will leverage the cable operator’s upgraded public WiFi network, its fiber assets and the shared small-cell infrastructure it had been building out under its agreement with Sprint.

Separately, Altice USA announced a new complementary nationwide roaming agreement with AT&T, which it said will give its new mobile platform 99% nationwide coverage.

Goei gave no details on Altice Mobile pricing. Is the $25-a-month price reported for the employee test, the price we can expect to see when the service rolls out? “You’ll see when we launch," he said.

Meanwhile, Altice USA lost 21,000 video customers in the second quarter, vs. 24,000 in Q2 2018, marking what the company said was the sixth straight quarter in which it has reported year-over-year churn improvements.

The cable operator attributed this improvement to its Altice One CPE platform.

“And we have somewhat of a unique footprint,” Goei added, noting that the New York area has a “high video bundle market.”

Altice USA added 13,000 high-speed broadband users in Q2, an improvement over the 10,000 added in Q2 2018. Goei said that with the upgrade of the company’s Suddenlink footprint to DOCSIS 3.1, all of Altice USA’s footprint can now offer 1-gig speeds.

In the Optimum region, where Altice is rolling out fiber, the company expects to start delivering 10-gig symmetrical speeds in early 2020.

Hand in hand with the network investments have come improved financials for business services, which saw a 6.1% revenue increase in Q2.

Other financial data: Altice USA’s net income for the quarter was $86 million vs. a $98 million loss a year ago; adjusted EBITDA grew 7.3% to $1.08 billion.

Also, Altice USA is reportedly close to selling a minority stake in its commercial telecom unit Lightpath to Stonepeak Infrastructure Partners, a New York private equity firm.

“This is an opportunistic situation for us,” Goei said. “It’s not a must-do.”

Pushing ahead with a plan to launch mobile services next year, Altice USA has hired Jean-Charles Nicolas as senior vice president of Altice Mobile.

In the newly created role, Nicolas will lead the development and launch and ongoing market strategy for Altice USA’s mobile service, set to debut sometime in 2019 and tie into the company’s “full” MVNO deal with Sprint that will give Altice control over the resulting service’s features and customer experience

RELATED: Altice USA, Sprint Strike ‘Full’ MVNO Deal

Altice USA is also looking to test the emerging CBRS shared spectrum band and a small cell strategy that could help it offload a portion of its anticipated MVNO costs.

RELATED: Altice USA Eyes CBRS Small Cell Strategy

Nicolas, who reports to Altice USA co-president and COO Hakim Boubazine, will also head up the Altice Mobile’s customer experience, including operations, marketing, sales, and customer care. He and his mobile team will be based at Altice’s headquarters on Long Island.

Nicolas joined Altice Group in 2009, and most recently was deputy CEO and CFO at Altice Dominicana, where he managed the daily operations of all the company’s services, including its mobile business. Nicolas is also late of Neuf Cegetel, a France-based wireless and MVNO provider, and Alten, a tech and engineering firm that worked with mobile companies such as Alcatel and Nokia.

“Jean-Charles brings with him more than 20 years of experience in the mobile communications industry, and we are pleased to have him join us in the U.S. as we prepare to launch our mobile service and introduce disruptive and differentiating offers to our residential and business customers,” Boubazine said in a statement. “Our expansion into the U.S. mobile industry is an exciting evolution for Altice USA, enabling us to deliver best-in-class entertainment and innovative digital services through high-quality, ubiquitous and seamless connectivity. We are making great progress readying our network infrastructure and customer management platforms to support our mobile offering and are glad to have Jean-Charles onboard for this next phase as we bring our wireless product to market.”