In its third quarter 2023 Altice added 24,000 Optimum Mobile net lines. This was five times growth compared to the same quarter in 2022 when it added 5,000 net lines. Mobile revenue for the quarter was $20.3 million, a 33.5% increase year-over-year.
The company’s mobile virtual network operator (MVNO) service rides on T-Mobile’s network.
Altice CFO Marc Sirota noted that in Q1 and Q2 of 2022, Altice added 8,000 and 28,000 mobile lines, respectively, which were receiving free 1-gigabit mobile data plans for a 12-month period. The majority of those customers rolled off of that promotion in Q2 of 2023, and about 6,000 rolled off in Q3. After this quarter, Altice won’t have any more subscribers on this free data plan.
“We continue to see around 60% of those customers previously on free data plans convert to a paying plan,” said Sirota. “We've remained disciplined around preserving mobile ARPU as we move away from free promotions.”
In fact, in Q3 after a majority of customers on legacy free mobile plans rolled off the promotion, mobile service ARPU increased 13% year-over-year.
Altice CEO Dennis Mathew said he was happy that the company was able to convert 60% of the customers on the free promotions over to paying plans. Of the 40% who didn’t convert, Mathew said it was a learning experience for the sales and customer service teams. “It's about selling the value, selling mobile and really making sure that we're selling solutions that our customers want and need. And we've transformed the retail environment as well. We've transformed it from a service center to a sales experience. And that's going to allow us to make sure that we're properly solution selling going forward with mobile.”
Optimum Complete
In May, Altice began offering Optimum Complete, which is a bundle of mobile and broadband service.
Sirota said, “Since the launch of Optimum Complete in May, our mobile growth has accelerated, and we are on a strong trajectory. Our momentum in mobile is supported by better sales training and incentives to help our employees promote and sell Optimum Mobile and through the expansion of distribution channels as we are now selling mobile through care, retention and door-to-door sales in addition to traditional sales channels.”
Similar to Comcast and Charter, which have always touted their mobile initiatives as a way to keep their broadband subscribers, Altice said it is seeing churn benefits from Optimum Complete. Sirota said the bundle has reduced annualized churns by over 20% compared to its fixed-only customer base.
“This represents a significant opportunity to further reduce churn as we expand mobile penetration in our customer base and drive higher take rates of our mobile product,” he said.
When the iPhone 15 became available in September, Altice offered some higher-tier customers an iPhone 15 for free and up to $800 off other iPhone 15 models with trade-in. “This compelling offer stacked up against the other MSOs and led to additional mobile growth through our sales channels,” said Sirota. “We are not only driving mobile growth but driving mobile growth of high-quality mobile customers, which support better mobile ARPU and stickiness.”
At the end of September, 33% of Altice’s mobile base subscribed to unlimited mobile plans, up from 20% last year.
Sirota said Altice is “working to deliver a B2B mobile product in Q4, which will be launched as an Optimum Complete SMB offering next year.”