ACP's Demise Amplifies Q3 Broadband Losses at Altice and WOW
Altice USA and WideOpenWest (WOW) took Q3 hits to their broadband subscriber numbers from the June end of the affordable connectivity program, though both would have lost subscribers regardless of ACP, the companies said. Announcing results after the market's close Monday, WOW said it expected Q3 to mark the end of its ACP-related losses. Last week, Comcast and Charter said that if not for ACP losses, their Q3 broadband subscriber numbers would have been in the black (see 2410310013 and 2411010006).
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After market close Monday, Altice said it lost 49,000 broadband subscribers in Q3, including 10,000 ACP-related subscribers due to nonpaid disconnects. That compares with a loss of 31,000 in Q3 2023. It pointed to fierce competition along with ACP. It said it ended Q3 with 4 million broadband primary service units, compared with 4.2 million in Q3 a year ago. During an analysts' call, Altice CEO Dennis Mathew said most of the 49,000 lost subscribers were in the "income-constrained" customer segment.
WOW CEO Teresa Elder, in a call with analysts, said that of the 4,400 high-speed data subscribers lost during Q3, 1,900 were due to ACP's end -- down from 5,000 lost in Q2. She said WOW doesn't expect further ACP-related losses in Q4. CFO John Rego said WOW is anticipating a loss of 16,500 to 19,500 high-speed data subscribers in 2024, including an expected 6,000 to 7,000 in Q4 from hurricane activity and 6,900 due to ACP. WOW said it ended Q3 with 481,000 high-speed data revenue generating units, down from 503,000 a year prior.
Mediacom wouldn't discuss subscriber specifics but told us Tuesday that the ACP program generally "was a positive for our business and low-income customers in our markets." In an email a spokesperson said, "The end of ACP has definitely created challenges for getting and keeping those low-income households online." While Mediacom offers options for low-income customers, "there is always going to be a percentage of customers that struggle to afford even those rates."
Altice had "relatively limited exposure" to ACP, meaning it lacked "good excuses" for its subscriber losses in the quarter, MoffettNathanson's Craig Moffett noted Monday. He said that unlike Comsat and Charter, Altice "is still knee-deep in alligators" with its broadband business facing strong competition from Verizon, AT&T, Frontier and T-Mobile. In addition, Moffett doesn't see Altice as a good acquisition target for Charter, particularly given the conditions such a deal would likely face from New York regulators.
In a call with analysts, Mathew said the simplified pricing for Altice's mobile business had helped reach 420,000 lines in Q3, up from 322,000 the same quarter a year earlier. Moreover, mobile is helping stabilize Altice churn while the cabler faces increased competition from fiber overbuilders and fixed wireless. He added that Altice is moving from a focus on stabilizing its business to growing revenue streams. Altice said it anticipated hitting 1 million wireless subscribers by 2027 and 500,000 fiber subscribers by year's end and more than 1 million by the end of 2026. The company ended Q3 with 482,000 fiber customers and 1.9 million video subscribers, compared with 2.2 million video subscribers a year earlier.
Elder said WOW finished Q3 with 66,300 video subscribers, down 34% from Q3 2023. That decline will continue as the cabler transitions to YouTube TV, she added. In addition, WOW is seeing increased subscriber interest in its high-speed data/YouTube TV bundle in its expansion markets.