Altice USA reported first-quarter revenues of USD 2.33 billion, up 1.2 percent from a year ago. Suddenlink posted revenue up 3.4 percent, as customer churn improved, and Optimum revenues were up 0.6 percent. Altice maintained its outlook for full-year revenue growth of 2.5-3.0 percent.
While residential revenues grew only 0.6 percent in Q1, business services were up 4.3 percent, and advertising revenue grew 5.1 percent. Adjusted EBITDA increased 4.0 percent to USD 981 million, and operating free cash flow improved 5.4 percent to USD 723 million.
Altice added a net 8,000 new customers in the quarter, down from 20,000 a year ago, which the company blamed on the Starz carriage dispute and storms in the Optimum footprint. Pay TV net losses of 30,000 were better than the prior year (-35k in Q1 2017) due to a significant improvement in Suddenlink’s performance (-7k losses in Q1 2018 vs. -20k in Q1 2017), driven by more focused marketing and improved content line-up with the Viacom addition in Q4, Altice said.
Over 100,000 customers were already using the new Altice One video platform after an initial roll-out in the New York area. Altice said around 80 percent of new subscribers were taking the service where available, and it will now start rolling out Altice One in the Suddenlink footprint.
Residential broadband net additions of 26,000 and telephony net losses of 8,000 were also impacted by the Starz dispute and storms at Optimum. Residential ARPU increased 0.5 percent to USD 139.6 in Q1, after a delay in certain price increases.
Capital expenditure was little changed year-on-year at USD 257.6 million, and Altice still expects to spend around USD 1.3 billion over the full year. The company said FTTH construction was underway at several hundred thousand homes in New York, New Jersey and Connecticut and commercial FTTH services are still expected to start later this year. On its cable network, 87 percent of homes could receive 400 Mbps and 29 percent 1 Gbps at the end of Q1.
Altice said it also plans to launch a new 'smart Wi-Fi' service for customers by the end of 2018. In addition, it's started the transition from QAM to IP on its cable network, which will make delivery more flexible and reduce the cost of CPE, the company said. Altice One is already compatible with IP delivery.
For the mobile market, Altice USA has begun developing a core network to support its own MVNO, including more investment in its Wi-Fi network and connecting to Sprint microsites to support Sprint’s network densification, which will benefit Altice USA’s MVNO service. The commercial mobile service is on track to launch in 2019.
Finally, Altice USA confirmed plans for a spin-off from its parent company. The spin-off via a distribution to existing Altice shareholders is expected to take place in June, pending approval from the French regulator AFM and Altice NV shareholders on 18 May.
