Broadband adds and upgrades, spurred by lockdowns initiated by COVID-19, spiked in the first quarter at Altice USA and helped cancel out video customer losses, but like its peers, the cable operator said it is uncertain how the rest of the year could shake out.
Altice added 50,000 broadband customers in Q1, a record for the company, and well above the 37,000 additions it had in the same period last year. That number does not include Altice Advantage customers, most who received the service for free because of the pandemic. Including those customers, broadband subscribers rose by 60,000 in the period.
Video customers fell by 42,000 (compared to a loss of 10,000 in Q1 2019), as the COVID-19 pandemic continued to wreak havoc on pay TV subscriber rolls. Earlier today, Comcast said it lost 409,000 video customers in Q1, nearly four times the decline in the prior year, mainly due to the pandemic.
The pandemic played a big role in driving broadband growth. In a press release, Altice USA said that between February and March, requests for residential broadband speed upgrades rose 93% and total data usage increased 24% (averaging close to 400GB per customer in March). Helping to drive the need for speed was a spike in video streaming in its Optimum footprint, up 23% in the period.
Despite the video losses, broadband growth managed to lift the boat, with revenue rising 2.2% to $2.45 billion and adjusted EBITDA flat at $1.03 billion. But despite the gains, Altice USA CEO Dexter Goei warned that later quarters may be worse.
“Our first quarter results and preliminary April data have given us confidence in our core cable business, especially in broadband,” Goei said in a press release. “However, we expect that the macroeconomic impact from the pandemic may affect our operations, particularly in our News and Advertising and SMB businesses. Although this reduces revenue and EBITDA visibility, we remain confident in our ability to deliver Free Cash Flow growth in 2020 while maintaining our leverage and share repurchase targets."
Altice also added about 41,000 mobile customers in the period, bringing its total wireless subscribers to about 110,000.
The cable company also expanded its 1 Gigabit per second broadband service, which is now available in more than half of its New York, New Jersey, and Connecticut (Optimum-branded) footprint. The company also continues to expand Gigabit service in its Suddenlink service areas across Texas, Arkansas, Arizona and more than a dozen other states, where it already offers Gigabit speeds to more than 75% of households it serves in those regions.
