First major cableco to make the switch. The cost will be high but investors seem happy. The stock went up in a down market. I found the move particularly surprising because Altice is very heavily leveraged after paying well above market for Cablevision and others. Patrick Drahi is of the John Malone school: high leverage and risk, GAAP losses, prayer. That is working well in today's low interest environment.

Other cablecos trust DOCSIS 3.1 to remain competitive with fiber. Comcast is offering a gigabit downstream of DOCSIS 3.1 to millions of subscribers, with hundreds of megabits of DOCSIS upstream beginning in 2017. Cablevision faces Verizon FiOS, still America's best network although getting a little long in the tooth. I suspect Altice expects savings from a new, all IP network and ultimately lower operating costs. Fiber will enhance their strong share of the many businesses in Long Island. Once the decision was made to go all fiber, offering 10 gig was logical. The difference in equipment cost is small. 

Liberty Global is using fiber home for as much as 2/3rds of the new homes they are passing and many other cablecos are installing more fiber. As far as I know, Altice is the first large cableco to rip out a DOCSIS network and bring in fiber home. (Calix is providing gear for some small cablecos.) 

Altice wants to IPO the U.S. division, cash out a portion, and use stock to acquire more companies.

Drahi has an experienced fiber team at his Portuguese division, including an innovative research staff. It will be interesting to see his vendor choice; the U.S. is continuing the ban on most Chinese network gear, especially Huawei.

10 gig provides bragging rights but even I can't think of practical uses.

 

An article by Doug Dawson questioned whether Altice's claim of fiber to everyone was supportable. Lisa Anselmo of Altice confirmed what they are doing,

  I am confirming that we are in fact building a full fiber-to-the-home network, leapfrogging DOCSIS 3.1

  • When we say we are “extending fiber deeper” or “driving fiber deeper” it’s because we already have fiber in our existing HFC network – therefore, we will deploy fiber deeper to create our FTTH network
  • I am confirming that in the 5 year timeframe we expect to reach all of our Optimum footprint and most of the Suddenlink footprint
  • As for the investment, we are not breaking out the figures. But as noted in the release, we are reinvesting efficiency savings to support the buildout. Additionally, given Altice’s experience in France and Portugal in deploying FTTH networks, we have the resources and capabilities to execute against this plan.

So to reiterate – the company is building a FTTH network.

  

Altice USA Unveils “Generation GigaSpeed” - A Full-Scale Fiber-to-the-Home Network Investment Plan to Enable 10 Gigabit Broadband Speeds

Altice USA is the First Major U.S. Cable Provider to Announce Plans for Large-Scale Fiber-to-the-Home Deployment Across its Footprint

NEW YORK--()--Altice USA, the fourth largest U.S. cable company, today announced plans to invest further in the U.S. by building a next-generation fiber-to-the-home network capable of delivering broadband speeds of up to 10 Gbps across its footprint. Altice USA will extend fiber deeper into its existing hybrid fiber coax (HFC) network and leverage cutting-edge and proprietary technologies developed by Altice Labs, the company’s global research and development arm, to create its state-of-the-art system. This full-scale initiative reflects Altice’s investment in technology and innovation across the globe and reinforces its commitment to its Optimum and Suddenlink residential and business customers in the U.S.

Altice USA is the first major U.S. cable provider to announce a large-scale fiber deployment plan for its footprint. Altice USA is a subsidiary of Altice N.V. (Euronext: ATC, ATCB), a leading global telecommunications, media and entertainment company.

“Across the globe Altice has invested heavily in building state-of-the-art fiber-optic networks, and we are pleased to bring our expertise stateside to drive fiber deeper into our infrastructure for the benefit of our U.S. Optimum and Suddenlink customers,” said Dexter Goei, Altice USA Chairman and Chief Executive Officer. “Today, we have a best-in-class network with incredibly fast speeds and quality service, and by taking immediate steps to create the fastest next-generation network, we will be positioned to support our customers’ needs well into the future. Altice USA’s ‘Generation GigaSpeed’ underscores our promise to accelerate investment in our network, sets the foundation for the delivery of next-generation services and enhancements for our customers, and is a testimony to the bright future of the U.S. telecommunications industry.”

The company’s five-year deployment schedule will begin in 2017, and the company expects to reach all of its Optimum footprint and most of its Suddenlink footprint during that timeframe. Initial rollout markets will be announced in the coming months. In addition to delivering a superior customer experience for the long term, the new architecture will result in a more efficient and robust network with a significant reduction in energy consumption. Altice expects to reinvest efficiency savings to support the buildout without a material change in its overall capital budget.

Since Altice USA’s inception with the acquisition of Suddenlink followed by Cablevision/Optimum, the company has been aggressive in rolling out enhanced services to its customers, tripling internet speeds to up to 300 Mbps for residential customers and 350 Mbps for business customers in its Optimum footprint more than one year ahead of schedule. The company has also expanded 1 Gigabit broadband service to nearly half of Suddenlink’s service area. In the Suddenlink footprint, the company continues to introduce an all-digital TV lineup and in the Optimum footprint, the company has extended its outdoor WiFi network and is expanding its business product portfolio.

Altice is a market leader in successfully deploying fiber in various international markets it serves. Altice France is on track to reach 22 million fiber homes by the end of 2022, and Altice Portugal will reach the milestone of 5.3 million fiber homes passed by the end of 2020 making Portugal the first European country entirely equipped with fiber.

About Altice USA -- www.alticeusa.com

Altice USA, a subsidiary of Altice Group (Euronext: ATC, ATCB), is the fourth largest cable operator in the United States, delivering residential and business services to 4.6 million customers across 20 states. Providing high-quality products that keep customers connected, Altice USA (through its Optimum, Lightpath and Suddenlink brands) offers digital cable television, high-speed Internet, voice, WiFi and advertising services. To meet our customers’ content and information needs, the company through News 12 also offers hyper-local news and programming created specifically for the communities we serve.

Contacts

Altice USA
Lisa Anselmo, +1-516-803-2362
Head of Communications
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or
Altice
Arthur Dreyfuss, +41 79 946 4931
Chief Communications Officer
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or
Altice
Nick Brown, +41 79 720 1503
Chief Investor Relations Officer
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