Altice USA Inc. is betting big on fiber network upgrades as it aims to better compete with Verizon Communications Inc. and Frontier Communications Parent Inc. for high-speed broadband customers.
Altice on Feb. 16 announced plans to accelerate its fiber network rollout strategy so that it reaches 6.5 million total passings by the end of 2025. The plan calls for more than doubling the passings in its Optimum territory in the New York tri-state area, to 2.5 million from 1.2 million as of Dec. 31, 2021.
It also calls for significant new build-out in the company's Suddenlink territory, starting with several Texas locations this year. Other states that would be impacted by the Suddenlink fiber buildout include parts of Arizona, California, Louisiana, Missouri, North Carolina, New Mexico, Oklahoma and West Virginia.
The company expects to rely heavily on government subsidies to complete the builds, though executives also acknowledged that capital expenditures would rise in the near-term as the company invests in network upgrades. The company is targeting capital expenditures of between $1.7 billion and $1.8 billion in 2022, including $300 million to $400 million related to additional fiber-to-the-home expenditures and $100 million to $200 million related to new builds.
The guidance excludes potential capex associated with subsidized rural broadband construction given the uncertainty of the potential funding, but CFO Michael Grau said Altice is pursuing those opportunities. Capital expenditures are expected to decline after 2024 as the fiber expansion starts to scale up.
Altice continued to report net customer losses in the fourth quarter of 2021, down a net 13,000 residential customers and 2,000 broadband customers during the period. That compares to net losses of 15,000 residential customers and 4,000 broadband customers in the fourth quarter of 2020.
Residential average revenue per user totaled $137.79 in the fourth quarter, compared to $140.09 a year earlier. Executives acknowledged that competitive pressure and promotional pricing had weighed on ARPU. Residential revenue, which accounts for the bulk of the company's total revenue, declined 2% year over year to $1.92 billion.
The company reported growth in its mobile and business services revenue, at 12.1% and 18.1%, respectively. Mobile net additions totaled 5,000 in the fourth quarter, compared to 7,000 in the same quarter of 2020.
CEO Goei said the company is continuing to grapple with pandemic-related headwinds, including higher numbers of people moving out of its New York-area footprint. "However, we remain confident that we will see more benefit from our accelerated pace of footprint expansion, fiber rollout, and other investments in customer experience and expanding our sales distribution," the executive added.
The company's total fourth-quarter revenue declined 0.6% to $2.52 billion, in line with the S&P Capital IQ consensus revenue estimate for the period. Full-year revenue grew 2% to $10.09 billion, compared to a consensus estimate of $10.08 billion.
Fourth-quarter net income attributable to stockholders was $251.7 million, or 56 cents per share, down from $330.5 million, or 60 cents per share, in the year-ago period. That beat GAAP consensus expectations of $231.2 million, or 50 cents per share.
For the full year 2021, net income came to $990.3 million, or $2.14 per share, up from $436.2 million, or 75 cents per share, at the end of 2020. Consensus expectations had predicted GAAP net income of $961.4 million, or $2.06 per share.
