Altice USA recently bought Suddenlink, resulting in many issues for subscribers. Jones explained that their answer time is quicker since they have larger call centers, the amount of calls is lower, and things are normalizing again. Despite her explanation, community members disagreed with Jones and demanded something be done.
The overwhelming majority of complaints from the community members involved billing, uneven pricing across the board, language barriers through the call centers, issues not getting resolved by technicians, and most importantly poor cable, phone and internet service. Most asserted that they believe they are being taken advantage of, due to the lack of other providers in the area.
Jones also mentioned that Altice offers reduced fees for low income families and senior citizens. For instance, if a family qualifies for free or reduced lunch, they qualify for a reduced fee; a report card must simply be shown to prove they have a child in the school system.
Commissioner Kristie Tenney passed a paper around, allowing individuals to provide their name, address and phone number for Jones and Adkins to finally address these issues they have been dealing with for years. If you wish view the full all article, watch this short video or subscribe now for full access.
Citizens outraged over poor Suddenlink services. More In Homepage. Does it have to be T-Mobile because they're the smallest of the three? Can you imagine a world where Comcast and Verizon would be allowed to merge? Never say never, right? So I'm not in the prediction business. But what I can say is that strategic transactions where you have different services, I don't understand why that should not be something that should be allowed by the antitrust division. Obviously, you know, the Fios element of Verizon could be very problematic from an antitrust standpoint for Comcast in certain of its areas.
But I'm sure there are there are buyers for that asset -- including ourselves, by the way, and probably Charter and other people. So outside of that, if you just took Verizon wireless and Comcast fixed, I don't know why that could not be something that the regulators would view as attractive. It could really drive better performance for consumers and better pricing.
One of the limitations on doing a wireless deal for Altice USA is you only have five million customer relationships. You're not a national player. So, we like wireless in itself, and we think we're good wireless operators of infrastructure, but if we acquired a national wireless provider, that would be a separate investment thesis then trying to do a quad play with Altice USA. We clearly would have some synergies, but the thesis of acquiring a mobile or trying to merge with mobile would be really based on the fact that we think we could do something better with the mobile business going forward.
You don't know how the chess pieces are eventually ever going to settle. But I do believe that consolidation among fixed and wireless makes a lot of sense. There's consolidation in every other developed country in the world already, right?
So it just doesn't make sense that we're the exception. For those that aren't as familiar with cable operations, can you explain what Altice's strategy has been within your cable footprint? I know you've spent a lot of money building out fiber, or at least a hybrid network, which effectively replaces traditional cable. Why is this a good investment for the company? This is done by dropping fiber deeper and by splitting the nodes. That is an ongoing, everlasting cycle.
Everyone's waiting for the next upgrade cycle to be able to go faster than 1 GB or to get symmetric speeds on upload and download. You can't today on cable.
And we have been rolling out in our sister company throughout Europe — France, Portugal, Israel — fiber to the home everywhere, because ultimately that is the best technology that's out there in fixed line. It does provide the best upload and download speeds. It does have the best response rates. It has all of the physical and engineering traits that you would want for cable today, which you don't have in the U. Cable companies are often very much maligned among the consumer base.
On the video side, prices continue to rise as content [prices rise], and so we have to pass through that, but we are the bad guy because people don't really understand that the MSNBCs of the world and other channels are out there pushing prices. But at the end of the day, people are calling in not only for their bill issues, but they're also calling in because there are problems with the network, whether it's weather-related, whether it's usage-related, because the neighborhood all of a sudden has gotten very contentious and congested.
Whatever it is, the cable network is just not as good. And so, one of the big cost elements in the cable network is the amount of servicing that's required every time you call. You call to a call center when you've got a problem with the technical side, you get a service person to come in and repair it. Sometimes a service person has to come two or three times to come repair it. And additionally, the maintenance of that network is expensive on the cable side.
So why not build out a brand new network that provides speeds today that can go up to 10 gigs up and down, that has less service-related technical issues? So you'll have less people calling into the service center, less times having people coming with muddy boots into your house, and on top of that, save a lot of capital expenditure going forward on maintenance.
So that equation made the the financial investment ROI very attractive. We know that we can sell fiber to the home better than cable. It's a more attractive product. So fiber to the home is the technology. It's the best technology.
And I think we'll be proven very right relative to the customer response — not only in terms of the product but to reduce our investment cycle going forward.
You know, if you never had to call your cable company, you'd probably would love your cable company. We think it's going to really help on all of those fronts. As you continue to upgrade the network, is there a trading multiple on pure-play cable companies you have in mind that you that you see as reasonable or fair so that you can properly judge all of these cable companies against each other?
Because right now they're a little all over the map. I think it's really driven by penetration levels. So obviously, lower penetration allows you to have a lot more upside. The competitive landscape of who you're competing against is meaningful. We compete in a big chunk of our footprint against Fios, which is a formidable competitor in itself, whereas a lot of operators have don't have Fios-like competitors across the board.
Given what we know and the appetite by consumers to continue to consume data bits heavily, this is something that's going to continue. Penetration levels are going to get higher and higher, which means that if the whole country is growing with household formation, there's going to be more and more broadband subscribers overall in the population. And then furthermore, people are upgrading regularly to higher and higher speeds. Don't tell me you didn't upgrade your speed since since you've been in the pandemic.
I'm certain you somewhere in one of your households or in one of your family members, you guys have upgraded your speeds. And so that's going to continue.
You are going to require better and better connectivity. You're going to require your upload speeds to be better and better in order for us to be able to do these types of Zooms or for people in your household to be able to do Zooms very easily. And so the future continues to be extremely bright for broadband. We don't see any deceleration whatsoever.
Switching gears, there's been a recent movement to potentially hold cable companies accountable for misinformation on cable networks. I'm curious what you think about this concept. I've got my personal views. I'll probably keep my personal views to the side.
I think from a professional standpoint, our customers require and request a certain amount of content. Some of the names that were mentioned in this letter to us clearly are content and channels that our customers want.
And so we're a provider of content for what our customers want. They have the choices to not want that content Yeah, the names that were were in this letter and that were broadly spoken about in the press. And for us, we want to make sure our customers are happy. And to the extent that they don't want that type of content or other channels, they can disconnect from us and do something skinnier, or just do a Netflix or an HBO Max or Peacock.
So, this is not a battle that I believe is geared towards us. This is something that consumers are choosing to do with their own feet and their own wallets today. And to the extent that for whatever reason, somebody in government thinks otherwise, they should probably not be speaking to us, but they should be speaking to someone else.
Let's talk about the future of linear cable TV. Do you envision a day where Altice does not offer linear cable TV? Because the economics get worse and worse every year. As we've been speaking, since I've known you over the last five years, the story is still the same. Price levels for content continue to rise. Eyeballs for content over big bundles continue to fall. This is an equation that continues to play out quarter over quarter in the public markets.
Obviously, broadband continues to be the story and continues to make cable companies and fiber companies very attractive investment propositions because of broadband. But the pure video solution — there are truly two different types of subscribers. There are those who have been subscribers to a video cable bundle for more than three years which are profitable. And then anyone that's been a subscriber for less than three years is unprofitable. So as fewer people sign up and the attachment rates on gross adds continue to decline, which is what we're seeing, then how do you protect your long-term customers who really just enjoy still having the cable bundle?
I am certain we will be able to figure out ways to work with our partners in the content world to make that transition smoothly to some type of an OTT format that's attractive — maybe where we don't have as much economic play in there.
That way, we don't have to deal with the diminishing returns that we are doing regularly. But at the end of the day, most content, more and more, is being consumed over broadband. As people move away from the cable bundle, by definition, everything is going to the OTT world over broadband.
So, do I really need to be providing a bundle? I think there's a lot of people already out there providing bundles. So I think it's a question of time. I can't tell you when, where and how, but it's a question of time for cable operators in general to completely reevaluate whether or not they're going to be in the video business.
So let me ask that question in a slightly different way. Do you envision a day where cable TV, as we know it, simply no longer exists? For sure. Everything is going to be IP-based, and then the question is because everything is IP based, and you have so many different choices As technology and integration technology continues to get better and better, you're going to be able to aggregate that on your OTT platforms, your smart TV. Your Samsung TV today already has, say, 20 apps, 30, 40 apps already there.
The pain of it is you're always clicking between the apps, all the time. Once you can get the whole aggregation together and make it look very similar to what you do in a cable environment, then that interactivity becomes second nature and doesn't really matter who's doing the bundle. It could just be your set-box provider, your smart TV provider. So this idea that some media executives have that there's going to be a floor at 50 million subscribers , that's ultimately fantasy?
So it's just a question of time. People grow up in a certain way. I tell my kids all day long, how could you spend 10 hours a day on your iPhone? And they're like, "Daddy, that's our life. We didn't go out in the woods and build bricks and castles and stuff like you.
That stuff is boring. My whole life is on my phone. Do you feel like this transition to streaming is good for the industry? It seems to me there's a scenario where media companies, by and large, end up with worse financial results in a streaming world compared to the cable world.
Listen, I'm not running a media company today, but I do think there's some truth in what you say. When people start getting valued on an OTT subs basis, that are probably returning less money than affiliate fees coming from a cable operator to them, it doesn't psychologically make sense.
Maybe you can distribute a lot quicker through an OTT platform than you can today. But as you continue to slice and dice habits for what people watch on TV, I think people will start leaving a lot of some of the traditional content providers. There will be a lot of people who do subscribe, but there will be people who'll just walk away from it completely.
So, time will tell. Markets are a little bit crazy for growth right now. But in a couple of years, as this all settles out. There's already starting to be some winners and losers. All of it? My kids don't want that. They're not that into Sesame Street. That's exactly right.
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