Altice USA crosses 1M FTTH milestone in Q1

Altice USA marked a key milestone in its ongoing fiber-to-the-home (FTTH) march, with CEO Dexter Goei noting on an earnings call it exceeded 1 million homes passed in Q1 2021.

Goei said the figure represented about 20% of its Optimum footprint, adding it was on track to pass an additional 500,000 homes this year as it returns to a deployment pace “more in line with 2019 levels before the pandemic slowed down the permitting process in 2020.”

He added fiber sell-in rates had picked up in the time since the launch of Altice USA’s double and triple-play packages in the back half of last year, growing from 14% of gross additions a year ago to 66% in the recent quarter.

Of fiber gross additions, about two-thirds signed up for its symmetric 1 Gbps product, Goei said, with uptake of this tier standing at 43% of overall broadband gross additions.

That helped drive year on year growth in 1 Gig customer penetration from 2.4% to 9.8% in Q1 2021, and pushed the company’s average download speeds to 302 Mbps.

Residential broadband net additions in the quarter fell to 12,000 compared to 50,000 in the year-ago quarter. However, residential revenue grew just over 1% to $1.98 billion. Consolidated revenue increased little more than 1% year on year to $2.48 billion, with net income attributable to shareholders jumping to $274.1 million from a net loss of $858,000.

Goei said the company expects full year 2021 customer growth “to be at least in line with, or better than” 2018 and 2019 levels, not including the 30,000 subscribers it added through its acquisition of Morris Broadband last month.

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Raymond James analyst Frank Louthan highlighted in a note to investors broadband usage at Altice USA “continues to climb with average use over 600 gig/mo.” He added the firm believes “the continued fiber growth and expansion will be a longer term driver of the business, but the FTTH rollout needs to extend further to see the pickup.” In particular, Louthan said the Federal Communications Commission’s Emergency Broadband Benefit Program “and further rural penetration could help results in 2H21 and 2022.”

Analysts at New Street Research offered thoughts in a similar vein, noting “subsidies could provide a nice boost to the business in late 2Q21 and for as many quarters thereafter as the money lasts.”