Altice USA expects to lose 20K broadband subs in Q3

Altice USA CEO Dexter Goei revealed the operator is expecting to lose thousands of broadband customers in Q3, but outlined plans to accelerate network investments and improve execution to achieve triple-digit customer gains by 2023.

The executive told investors during a Goldman Sachs conference an expected back-to-school subscriber boost failed to materialize this year, yielding “underwhelming” results. As a result, “our numbers are going to be negative coming into Q3 in terms of internet net adds, probably to the tune of 15 to 20,000,” he warned. That will leave full year 2021 net adds “flattish to slightly up,” compared to broadband net adds of 72,000 in 2019 and 142,000 in 2020.

Goei called the results “disappointing” but said Altice is hoping to return to positive net additions in Q4 and is targeting “triple-digit net adds by 2023.” To get there, it is aiming to improve execution and potentially speed up ongoing fiber deployments, he added.

Earlier this month, Altice announced the sudden resignation of COO Hakim Boubazine, which shifted direct oversight of its telecommunications business to Goei. The CEO said the change will allow the company to “focus on getting decisions done quicker” and boost efforts to improve its brand, marketing and customer experience.

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“Me coming in really helps flatten the organization, allows people to have a lot more say in their opinions and it rises quickly to my attention, and they’ll be able to react in a much more flexible way,” Goei explained. “The buck will stop with me.”

On the network side of things, Goei said the company is currently weighing how much and where to accelerate investments in upgrades. For instance, he noted it’s still working to upgrade three million homes to fiber where its footprint overlaps with Verizon Fios, with 1.5 million expected to be completed by the end of 2021.

“The question is do we want to finish that quicker, the extra million and a half as quickly as possible? Are there other parts of our footprint that we want to be proactive with fiber as people upgrade to fiber and overbuild in certain parts of our network?” he said.

“Ultimately we do believe fiber is the winning technology going forward as opposed to improvements in DOCSIS technology,” Goei continued, stating it is looking at strategic deployment opportunities in the Eastern part of the country outside its Fios overbuild as well as in its Suddenlink footprint.

Altice is also working to alleviate “natural hiccups” that have cropped up during its fiber rollout, including issues with the gateway required for customers takings its triple play service, with Goei tipping these to be resolved by the end of the year. Additionally, it is aiming to cut down on installation times, which Goei said can run as much as three times longer than the hour or less it takes for cable setups.

“Getting the install times down to levels which are commensurate with HFC just is going to take time,” he said. “The more people get trained, the more clusters of connectivity, you’ll get the time levels down significantly.”