Altice Debuts $20 Wireless Service for Its Cable Customers

(Bloomberg) -- Altice USA Inc. is offering its cable customers unlimited mobile-phone service for $20 a month, less than what its pay-TV peers and the major wireless carriers charge.

Using Sprint Corp.’s wireless network, Altice Mobile is available to Altice Optimum customers and Suddenlink customers as of Thursday. For people who aren’t Altice customers but live in the 21 states where the company operates, the service is available for $30 a month.

Altice’s larger peers, Comcast Corp. and Charter Communications Inc., have already launched their own wireless offerings by reselling Verizon Communications Inc.’s service. Those companies charge $45 a month, per line, for unlimited data on Verizon’s network. Wireless carriers T-Mobile US Inc. and Sprint start unlimited at $60, while bigger rivals AT&T Inc. and Verizon offer $70 plans.

“At $20 per line, Altice Mobile is priced at a 40%-70% discount to wireless peers -- an extremely disruptive price point that should position them to take share at a faster rate than Comcast and Charter have,” Jonathan Chaplin, an analyst with New Street Research LLC, wrote in a note.

Comcast, which entered the wireless business in 2017, had about 1.6 million wireless lines at end of the second quarter, about double the number from a year ago. But its mobile business continues to lose money.

Thin Margin

While Altice’s price is among the lowest in the industry, the company expects the service to be profitable in 12 months, Chief Executive Officer Dexter Goei said on a conference call with media outlets Thursday.

“We’re not pricing this to lose money,” Goei said.

For cable companies, the key is to offload as much traffic as possible onto their own Wi-Fi networks to reduce what they pay wireless giants.

Altice will sell Apple Inc., Samsung Electronics and Motorola phones for its service, and has a mobile virtual network operator, or MVNO, network-sharing agreement with Sprint, which T-Mobile is in the process of buying. When Altice Mobile customers venture outside Sprint’s network coverage areas, the service will roam onto AT&T’s network, according to the agreement.

Altice’s wireless business is different than standard MVNO arrangements because its deal with Sprint is less restrictive, and allows the company to control the network and improve its quality.

The service, while not restricted by data caps, places speed limits on traffic like videos, which will be “standard definition” rather than high definition. And hot-spot data speeds will be no faster than 700 kilobytes per second.

To contact the reporters on this story: Scott Moritz in New York at smoritz6@bloomberg.net;Gerry Smith in New York at gsmith233@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, John J. Edwards III, Rob Golum

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