Altice pushes through new rate hikes
Altice USA saw its broadband customer base plunge by roughly 10,000 accounts in October and November, on the heels of an Optimum outage that angered customers in Connecticut and New York. The company was able to recoup that lost business with a December surge — while subjecting customers to a new round of price hikes.
New York-based Altice USA offers cable service in two dozen cities and towns in Connecticut, including the metropolitan centers of Bridgeport, Norwalk and Stamford and surrounding towns, and several communities clustered around Torrington. The company is the fourth largest cable operator in the nation after Comcast, Charter Communications and Cox Communications.
Customers erupted in early September on social media, many threatening to seek an alternative carrier, after an Optimum service interruption that Altice attributed at the time to a power outage at a Westchester County, N.Y., facility. Altice issued customer credits equating to one day of broadband service, which some criticized as inadequate compensation for the disruption the outage caused.
In reporting its 2019 results on Wednesday, Altice acknowledged it saw an increase in customer “churn” in the weeks following the Optimum outage. But it bounced back big in December with the addition of 17,000 accounts on a net basis, helping it draw level for the year with the 72,000 customers it added in 2018.
Still, the customer revolt in the two preceding months resulted in Altice registering its lowest quarterly broadband gain in years. The company did not immediately break out its Optimum figures from those of Suddenlink, an Altice USA subsidiary that offers service in pockets of 20 states nationally, none in the Northeast.
“The ... additions remain strong throughout the last few months supported by simple ‘price-for-life’ offers we had,” Altice CEO Dexter Goei said Wednesday. “We had a very short-lived churn impact on our businesses, and while it was frustrating to end the year that way, it has not detracted from the growth opportunities in which we have invested heavily. And we continue to see very good trends.”
Altice is counting on broadband to sustain growth and profits in the coming years, as cable TV subscribers continue to “cut the cord” in favor of streaming services like Hulu, Netflix and YouTube TV. The company has been pushing both an all-in-one system called Altice One that combines the functions of a home cable box and WiFi hub, while stringing fiber optic cable directly into neighborhoods to enable far faster broadband speeds.
In September, the company sweetened its appeal further by offering a new mobile service at a $20 monthly rate for broadband and cable TV subscribers — the company excludes fees and taxes from that figure — signing up nearly 70,000 wireless subscribers in the first four months of service. The introductory rate ends next week, with Altice USA planning to add $10 to the monthly price for new subscribers.
Altice relies on the Sprint wireless network, which this week won approval from the U.S. Department of Justice to complete a merger with T-Mobile.
“We feel very, very relieved” at the DOJ decision, Goei said.
Altice offered separately a $65 guaranteed price for cable TV service — again excluding fees it tacks on for several elements like broadcast TV and sports networks — which failed to stem losses it continues to incur in its pay-TV subscriber base. The company lost 107,000 cable TV customers last year, about four of every 10 in the final three months of the year as new services came online like Disney+ and Apple+ TV.
Even as Altice sees “over-thetop” video competitors chip into its cable TV base, the company continues to increase prices. Goei said the newest hikes average to between a 4 percent and 5 percent annual increase.
“We’re about two weeks into that price increase. Letters went out for some of our franchisees ... in December,” Goei said. “We have seen some volume on our call centers, but nothing exceptional, no differentiated ... reaction from our customer base so far into mid-February, so we’ll monitor that very closely.”