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Altice USA launches $20-per-month wireless plan, projects profits in 12 months

Altice USA Inc. unveiled a $20-per-month mobile service for customers in its 21-state footprint Sept. 5, an aggressively priced offering that executives said would allow for profitability due in part to the company's blended approach to its mobile virtual network operator agreement with Sprint Corp.

While cable operators Comcast Corp. and Charter Communications Inc. have mobile offerings that run on Verizon Communications Inc.'s network, Altice's mobile service will operate on a mix of cellular infrastructure the company launched itself and that owned by Sprint. This will later include infrastructure owned by T-Mobile US Inc., should the pending merger with Sprint close. Altice also has a roaming agreement with AT&T Inc. and an extensive fiber and Wi-Fi network to support its service. This allows Altice more control and flexibility over its network, which in turn allows it to keep costs for the mobile service lower than its competitors, Altice executives said.

Optimum and Suddenlink customers Altice's 21-state footprint can lock in a "price for life" commitment on the $20 plan, which includes unlimited data, talk and text, as well as unlimited access to mobile hotspots, video streaming and international usage when traveling in or contacting people in more than 35 countries, including Canada, Mexico and most of Europe. Non-Optimum and Suddenlink customers in or near its footprint, including New York City, can secure the Altice Mobile service for $30 per month. The wireless network will include 5G services as they become available.

Altice estimated the average mobile bill in its service territory costs about $70 monthly, allowing its customers to save as much as $600 per year for one line.

"Obviously, the margin profile is different than our core telecom business, but today pricing in the market we feel is probably not as attractive as it can be," Altice USA CEO Dexter Goei said on a Sept. 5 call to discuss the launch. "We're pricing this as a stand-alone product that we think we can make very attractive economics on." He reiterated the company's earlier estimate that it would take about a year for Altice Mobile to reach profitability following some "light losses" at the outset due to startup and marketing costs.

Goei said the company will benefit from the experience many of its executives gained in working at sister company Altice Europe on wireless businesses in conjunction with mobile virtual network operators abroad.

The new wireless service's website is operational, marketing is underway with retail distributor partners, and a TV campaign will air both locally and nationally. As awareness for the service grows, the support will accelerate, with promotional outlays higher in a month than they are today, Goei said.

The company is not officially bundling the new product alongside its video, broadband and telephony services. "We're not offering a quad-play, per se," said Goei, opting instead to price the stand-alone offering as low as possible and below similar offerings from competitors. Altice is optimistic that those buying the mobile service may add other products.

Asked whether Altice Mobile could at some point include subscription video-on-demand services or live video services from virtual providers, Hakim Boubazine, Altice USA co-president and COO, said the company is open to that possibility, depending on how market trends evolve. It aims to be "a one-stop shop" for consumers.

As to equipment, consumers can bring their own phone to Altice Mobile. Eligible Optimum and Suddenlink customers can purchase the latest smartphones, including devices from Apple Inc., Samsung Electronics Co. Ltd. and Motorola Solutions Inc. at Optimum and Suddenlink retail stores.