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Altice CEO Confident With Its Venture Into Mobile Next Year

Late last year, Altice USA unveiled its plans to launch an MVNO service under Sprint's network. Even though the cable company has not yet launched this service, an executive recently elaborated more on those plans.

Dexter Goei, chairman and CEO of Altice USA, talked about the company's plans to launch the MVNO service in last week's quarterly conference call with analysts. Although the cable company is following the footsteps of its two competitors that have earlier ventured into the MVNO market, the executive shares that they intend to have a more profitable run. One way the company intends to do this is by making this into "a profitable standalone business."

Goei shared that they "don't anticipate, even in our first year of operation, to lose money on this. There may be working capital timing differences relative to handsets and how we treat those, but in terms of losing money, we are not going to lose money."

These comments made by the CEO show a lot of confidence in the MVNO service they intend to launch in the future. Considering its competitors (Comcast's Xfinity Mobile and Charter's Spectrum Mobile) have reportedly spent $1.2 billion and $116 million, respectively. Goei believes Altice will not be losing any money on either EBITDA or EBITDA-less capex basis.

Compared to its rivals, Altice plans to offer 4G LTE and voice-over-LTE services right away when they launch next year. As explained by the CEO,

"Recall we have a full infrastructure-based MVNO, which has attractive economics and flexibility features for us. We have a dedicated and experienced mobile management team which will lead the development, launch and ongoing mobile strategy," 

So far, Altice has hired Jean-Charles Nicolas to spearhead the U.S. mobile operation through his experience as the deputy CEO and CFO of the company's Dominican Republic operation.

"In terms of network development the densification of Sprint's network, which we're helping with our AirStrand deployment is comfortably ahead of schedule as are the upgrades to and expansion of our Wi-Fi network. We are also testing CBRS spectrum with equipment in a 3.5 gigahertz band as this may be good complementary capacity for us."

Sprint CTO, John Saw, earlier confirmed that they have deployed "tens of thousands of strand mounted small cells." This shows progress for Altice's MVNO service, since it promises to keep costs down by running mobile connections through the technology. Both Charter and Comcast have previously announced that they are testing this same technology, which shows Altice could be a step ahead of its competitors.

Source: FierceWireless

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  1. First of all, Altice is going to be running on the worst of the big four networks: Sprint. That in itself is a hard sell. There is no guarantee what kind of a future they have with a pending merger attempt that is likely going to end up with them being eventually a Tmobile mvno (which may be good for infrastructure but could be bad for cost effectiveness, Tmobile mvnos are notorious for a high casualty rate because of the Tmo mvno program being tough). Being third to market against two developing incumbents like Comcast and Spectrum is going to be tough. The CEO may be right about the low initial cost of Sprint mvnoship able to risk manage the initial outlay but whether they will get good and/or fast ROI is another thing. They are saying no money lost in the first year but anyone investing in them should ask directly and skeptically, "where's the cash flow and money going to come from?" I hope they have not just a good marketing and development plan because many mvnos have failed. Unless they put in a REAL PUSH and work hard to mitigate Sprint's multiple mvno disadvantages (like different sims for different phones, lack of nation wide Volte , and coverage, coverage , coverage. In the end , what you do with what they have might make a difference but it might not too. Spectrum has Verizon but they are offering a more expensive product with less byod and spent only a fraction of what xFinity /Comcast did. The very fact that Altice chose Sprint would indicate that they don't have the budget or intent of running hard with the big boys in the pack and are just trying to minimize expenditures. Sprint's mvno program honestly is best for launching an eventual multi carrier mvno rather then born with Sprint and die by them too, which is highly likely. Sprint's biggest advantage in the mvno world is simply cost. But you do get what you pay for. Good luck to them.

    1. Being third to market doesn't matter much when the cable business is comprised of regional monopolies, but everything else is spot on.

      I'd be surprised if Altice mobile is still around in a couple years.

      I mean, without any heavy loss leaders, their uncompetitive pricing and terrible coverage will make it hard to minimize churn.

      Their only hope is the merger, which they may be banking on a little too early.

      The merged super-network won't be fully realized until at least 2020 (and maybe not even then), so what will they do until then?

      Lose money, most likely.

    2. Sprint postpaid coverage plus the added bonus of the new T-Mobile roaming is excellent. This MVNO agreement will be a winner for Alice, with or without the proposed merger.

  2. Are you saying Sprint roams into T-Mobile NOW? What are the details?

    Without this, even Sprint postpaid coverage is rather poor, with only a less-than-useful whiff of 200mb of data per month (if even that) as something prepaid does not have.

    1. T-Mobile CTO Neville Ray clarified during T-Mobile's first-quarter earnings call on Tuesday that the roaming agreement is really about data. Sprint's customers' phones in the areas covered by the roaming agreement could do VoIP but not VoLTE at this point, he said. Sprint has underlying voice calling available through CDMA.
      “The issue that we’re trying to address and work together on is LTE data coverage,” Ray said, referring to the roaming agreement.
      For Sprint phones to hop to T-Mobile, they need some combination of bands 2, 4, 12, 66, or 71. Many Sprint phones have bands 2 and 4; the others are rarer. Bands 12 and 71 are the key ones for more rural areas.
      Sprint phones currently make calls on the carrier's old 2G CDMA network. Phones which have Sprint 2G and T-Mobile LTE coverage will still make calls on the Sprint 2G network. Otherwise, they will roll onto another roaming 2G network for calls, such as Verizon's network.
      Sprint phones won't use the T-Mobile network for calls until after the merger. Then, the merged carrier will try to move subscribers over to phones that support voice-over-LTE (VoLTE), which makes calls on the LTE network. Details on that, and on whether Sprint customers will be able to use their existing phones to do this, are currently unclear.

      If you want more information, read the transcript of the T-Mobile earnings call. Ray said that T-Mobile has already begun tweaking tower setting to allow Sprint customer data connection.

    2. The main focus, says Neville Ray, is to provide LTE service to Sprint customers in areas currently lacking 4G signal. He has no worries about possible adverse impact on TMUS capacity, and disruption for existing TMUS customers, perhaps because there are some “provisions” in the deal that mitigate risks. John Legere adds that the Sprint roaming arrangement, by monetising TMUS’s available network capacity, represented incremental revenue flow and helps their bottom-line. However, he admits that this all assumes Sprint “turns it up and starts to use it extensively”.

  3. so I'm trying to figure out if it would be a good or bad move to switch from ATT to Altice mobile Help!

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