Altice USA said its capital expenditures (Capex) reached $485.1 million (+50.1 percent) during Q2 2022 representing 19.7 percent of revenue — driven by accelerated fiber (FTTH) rollout.
Altice USA is targeting 6.5 million fiber passings in 2025 (including 1.3 million total incremental FTTH passings in FY 2022). As of Q2 2022, Altice has 1.59 million FTTH passings, adding +270k new FTTH passings in the quarter. Altice had achieved 61k new passings in Q2 2021, and +146k new passings in Q1 2022.
“In the second quarter, we began to see the benefits of our investments against our growth initiatives. Our fiber network deployment accelerated at a faster pace than we have ever achieved, reaching 1.6 million passings, and we surpassed 100,000 fiber customers,” Dexter Goei, Altice USA Chief Executive Officer, said.
In June 2022, Optimum introduced 5 Gig Fiber Internet (5 Gbps), the fastest residential fiber internet service in the New York Tri-State area, with symmetrical speeds up to 5 Gig, which is more than twice as fast as speeds offered by competing fiber providers.
In addition to the new 5 Gig speed tier, Optimum introduced Optimum 2 Gig Fiber Internet (2 Gbps), giving Optimum Fiber customers various multi-Gig symmetrical speed options. The new 5 Gig and 2 Gig Optimum Fiber Internet tiers launched in parts of Long Island beginning in June and is being rolled out across the company’s entire tri-state fiber footprint by year-end.
1 Gig (1 Gbps) broadband speed and higher sell-in to all new customers, where 1 Gig or higher services are available, was 45 percent in Q2 2022 (1 Gig sell-in to new customers taking the FTTH product was higher at 48 percent in Q2 2022). Approximately 18 percent of the residential customer base currently take 1 Gig speeds, representing a significant growth opportunity for the company.
Broadband speed taken by Altice USA’s customer base on average has nearly doubled in the past three years to 379 Mbps in Q2 2022. Approximately 45 percent of Altice USA’s broadband customers remain on plans with download speeds of 200 Mbps or less.
Altice said broadband-only customer usage averaged 578 GB per month in Q2 2022, which is 25 percent higher than the average usage of the entire customer base (462 GB per month).
Altice USA has also been accelerating the pace of its network edge-outs, adding +58k total passings in Q2 2022, and a total of +168k total passings in the last twelve months. The company is targeting an incremental 175k+ new passings in FY 2022.
Altice USA has applied for subsidies for rolling out FTTH to over 180k homes and was awarded subsidy grants for a total of 24k homes YTD, totaling $35 million; 9k homes in Louisiana, and 7k homes in La Paz and Coconino Counties (Arizona) in Q2 2022 in addition to the subsidy grant in Yavapai County (Arizona) for 8k homes awarded in Q1 2022.
Altice expects to continue to accelerate investments in key growth initiatives, increasing Capex to approximately $1.7 billion to $1.8 billion in FY 2022.
Revenue
Altice said its revenue fell 2.1 percent in Q2 2022 to $2.46 billion as Residential revenue declined 3 percent, Business Services revenue dropped 0.1 percent and News & Advertising revenue grew 1.1 percent.
