Altice USA Improves Video Sub Losses in Q1

Altice USA improved its video losses in the first quarter – shedding about 30,000 subscribers in the period versus 35,000 in the prior year – but chairman and CEO Dexter Goei told reporters that they shouldn’t expect that to turn into positive growth anytime soon.

Dexter Goei

Dexter Goei

“I’m not going to go out on a limb,” and predict positive video subscriber growth," Goei said on a conference call with reporters to discuss Q1 results, adding that he doesn’t see an acceleration of video losses either.

Other cable operators have seen video subscriber losses increase in the first quarter due to several factors, including added pressure from over-the-top service providers. Comcast shed 96,000 video customers in Q1, compared to gain of 42,000 the year before. And Charter Communications touched off a meltdown in cable stocks in late April when it revealed it lost 112,000 video customers, well in excess of expectations.

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Goei said the Q1 subscriber losses were due very specific issues – its weeks-long carriage dispute with premium channel Starz and several severe snowstorms in its service territory. Although the Starz dispute was resolved in February,  competitor Fios TV capitalized on the impasse with an aggressive marketing campaign to try to lure customers away.

Altice also has started rolling out its much-touted communications hub – Altice One – in the quarter in its Optimum areas and already has installed the product in about 100,000 homes. The cable company initiated a soft launch of the product, which offers seamless navigation across traditional video, OTT apps and whole-home WiFi and other services, in Suddenlink markets in the second quarter and will expand across the footprint in Q3. 

Altice USA also is making progress on its wireless offering, a mobile virtual network operator agreement with Sprint that could see daylight by the first quarter of 2019. Goei said he did not anticipate problems with the arrangement in light of Sprint pending acquisition by T-Mobile.

For the quarter, revenue was essentially flat – up 1.2% to $2.33 billion from $2.3 billion in the prior year – and cash flow increased 4% to $981 million. Goei said he expected Q1 to be the low point of growth for the company, predicting that revenue will rise between 2.5% and 3% for the full year.