Altice USA reported that it has signed up 15,000 subscribers to its Altice Mobile service, which the company launched on September 5. At the end of Q3 2019, Altice Mobile had generated revenue of $3 million on a service that costs $20 per line per month for existing Altice broadband customers, and $30 per month for non-broadband customers.
Altice Mobile operates as a mobile virtual network operator (MVNO) service riding on Sprint’s network, but it’s different from other MVNOs in that Altice uses its own mobile core infrastructure. And the company has even deployed 19,000 small cells on its aerial cable strands for the benefit of Sprint’s network to help densify its coverage in Long Island, New York.
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Wells Fargo Senior Analyst Jennifer Fritzsche noted, “ATUS incurred $10 million of mobile losses in the quarter, although mobile capex stepped down as they have largely completed the development of the mobile core on their network.”
Consumers can bring their own phones to Altice Mobile, or they can purchase smartphones at Optimum and Suddenlink retail stores. The company plans to offer online handset sales within three weeks.
“Our initial focus has been on optimizing customer service and the on-boarding process, working through any initial teething issues, which is normal for any new product launch,” said Altice CEO Dexter Goei, according to a Seeking Alpha transcript of the company’s Q3 2019 earnings call. “We're currently training more sales and customer service agents so we can manage the higher volumes we're expecting once we open up all the sales channels.”
Goei said the company is hurrying to offer handsets via an online portal. “We see a tremendous amount of traffic on our sites, but they literally stop ordering when they can't get any handsets. So we know that that's going to drive incremental volume.”
Like both Charter and Comcast, Altice offloads some of its traffic onto its Wi-Fi network to save money on wireless network leasing costs. Charter has about 500,000 Wi-Fi hotspots, and Comcast counts 19 million. Altice says its mobile offering is supplemented with two million Wi-Fi hotspots.
RELATED: Comcast taps its 19 million Wi-Fi hotspots to offload Xfinity Mobile traffic
Of its wholesale agreement with Sprint, Goei said, “We believe we've got a very attractive contract on a relative basis to our U.S. peers.” He said typical mobile subscribers use from between 6 Gbps and 8 Gbps of data per month. “I think from our perspective we're seeing numbers that are in line if not better than that; so less usage than 6 to 8 gigs. And we're probably offloading onto our out-of-home Wi-Fi network about 1 gig.”
Although Altice hasn’t had much time yet to target new customers, Goei said it’s eyeing the New York City borough of Manhattan as a place where it will market its mobile offering to residential customers. He said Altice has Lightpath for business customers there, but it doesn't have any residential customers. “And so we already have billboards and digital ads and some broadcast ads in the Manhattan area. But we'll start accelerating a lot more of that advertising once we have all of our sales capabilities up and running.”