Altice USA's fiber-to-the-premises network rollout is switching into high gear as the operator ended the third quarter of 2019 with 500,000 homes now ready for service with FTTP.
That rollout, now covering some 10% of Altice USA's Optimum footprint in parts of New York, New Jersey and Connecticut, is up from the 300,000 FTTP-ready homes the company had at the end of the previous quarter.
Speaking Tuesday on Altice USA's Q3 call, CEO Dexter Goei said the deployment acceleration comes as Altice USA ramped up construction following the acceptance of permits.
Altice USA CEO Dexter Goei
Goei says FTTP holds key operational and competitive advantages for Altice USA, but stresses that the company will continue to drive value out of its HFC networks.
Altice USA will use its FTTP network to deliver multi-gigabit speeds and believes it will vastly reduce operational costs and improve customer experience metrics compared to capabilities and the maintenance and upkeep requirements of its DOCSIS-based hybrid fiber/coax (HFC) networks. Still, Altice USA has plans to launch a 1Gbit/s broadband service on its HFC network in the Optimum footprint using DOCSIS 3.1 in the coming months. Altice USA already offers 1-Gig speed on HFC in its more rural Suddenlink service areas.
"We view fiber-to-the-home as an end-state of the network which is superior to other future cable DOCSIS network upgrades," Goei said. "This is especially the case as the fiber technology is already commercially available today and we're leveraging expertise from our sister companies [such as Altice Europe] in how to deploy the fiber at a relatively low cost."
Goei said broadband demand continues to grow, with average household data usage climbing more than 20% year-over-year, to more than 290 Gigabytes per month, with broadband customers averaging 12 in-home connected devices.
He said customers that get speeds of more than 200Mbit/s from Altice USA use 75% more data on average than customers on lower speed tiers, with the majority of that usage tagged for video streaming.
"Given the proliferation of new streaming services, we feel very well positioned to benefit from continued growth in demand for our broadband services, which is at the heart of everything we do," he said.
But Altice USA will continue to drive value out of its HFC networks as it overbuilds them with fiber. "One of the usages would be to accelerate small cell mounted strands onto it," Goei said. "That's been a very successful [in] experiments that…we've had with Sprint. I think we would be open to having that dialogue with third parties. Going forward there's a lot of things that we can do with that network as we free up capacity more and more."
It wasn't long ago that TV was ranked by subscribers as the most important service in the bundle provided by their communications service provider (CSP). Recent research indicates that for nearly three quarters of subscribers, broadband is now the most important service. Broadcast TV is the most important service to only 15% of North American consumers, replaced by OTT video streaming platforms like Netflix, Amazon Prime and Disney+. In addition, many different competitors are moving aggressively to stake a claim in consumers' homes.
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