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Altice USA has warned investors the broadband and cable TV giant expects higher video subscriber losses in 2022 due to consumers opting for streaming TV packages over its legacy video distribution business.
“In general, we’re predicting maybe even higher losses as consumers continue to start to pivot to more OTT-driven viewing habits. High single digits has been the range. This year we’re in that 220,000, 230,000 type subscriber loss on video. We may be higher next year,” CEO Dexter Goei told the UBS Global TMT Conference during a session that was webcast on Tuesday.
Altice USA like the rest of the linear TV industry continues to be impacted by cord-cutting trends, even as it looks to expand its broadband user base amid growing internet usage. The fourth-largest U.S. cable TV provider lost 67,000 video subscribers in the third quarter of 2021 to get to a base of 2.8 million customers.
Altice USA, which a few years ago acquired Cablevision and Suddenlink, is the biggest U.S. cable operator behind Comcast, Charter Communications and Cox Communications. A recent report from Leichtman Research Group found the largest U.S. pay TV providers, representing about 93 percent of the market, lost around 650,000 net video subscribers in the third quarter of 2021.
That accelerated trend compared to a net loss of about 90,000 video subscribers in the third quarter of 2020. Goei also discussed whether Altice USA will remain a publicly traded company, or go private.
He told the UBS conference that his company’s stock price was under-valued due to a short-term focus by investors as Altice USA lays the groundwork for medium to long term growth. Goei added Altice USA has a “very solid balance sheet” and no material refinancings on the horizon until 2025.
“We have a lot of flexibility as to what we can do with our balance sheet. If the opportunity comes up for a big strategic transaction — whether it’s a self-strategic transaction or something outside of our footprint — that’s something we’ll obviously look at. But that’s not the focus today,” he argued as Altice USA remains occupied on reaching its strategic growth goals.
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