For Now, Altice Focusing on Execution, Not M&A
New York – Altice NV CEO Michel Combes told an industry audience Wednesday that the acquisitive Dutch telecom company won’t be flexing its M&A muscles in the U.S. for the near term, instead focusing its energies on executing the business plans of its existing assets.
Altice made a splash last year with the $9.1 billion purchase of mid-sized cable operator Suddenlink Communications, and further extended its U.S. aspirations with the June purchase of Cablevision Systems for $17.7 billion.
At the Goldman Sachs Communacopia conference here, Combes said that significant U.S. M&A activity is “a bit over” for the time being as Altice focuses on execution and integrating its U.S operations.
Altice USA CEO Dexter Goei said that the transition is already happening. At the former Cablevision, investments made in customer service, the Optimum brand and quality products are already paying off in improved subscriber metrics. The New York area systems lost about 2,000 video customers in the second quarter – its best performance in four years – and Goei said that in 2017 the unit should continue to recapture market share. At the former Suddenlink, its Operation GigaSpeed high-speed data initiative has helped drive broadband growth, although tough competition from satellite TV service providers has eaten into video growth. Providing a better video experience could help reverse that trend, as other larger operators have shown, Goei added.
“We’d like to do that as well,” he said.
Altice USA is focusing on increasing broadband speeds in all of its markets – Goei mentioned that prior to the purchase, half of Optimum customers wanted 25 Megabits per second and the other half wanted 50 Mbps. Now, he said, Optimum is phasing out 25Mbps – it has a 5 Mbps low tier service and a 60 Mbps service – and about 40% of new customers want 100 Mbps speeds.
At Suddenlink, which has a 50 Mbps flagship service and 100 Mbps and greater tiers, Goei said that 40% to 45% of gross additions are in the higher tiers.
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