What Scale Will Altice See following Its US Cable Acquisitions?



Altice after the Cablevision transaction

In the last part of the series, we learned about the progress of Altice’s (ATCEY) Cablevision (CVC) deal. The company’s cable customer relationships are in New York, Connecticut, and New Jersey.

We also learned about Altice’s acquisition of Suddenlink Communications in December 2015. According to Suddenlink, its key operating areas include Arkansas, Arizona, Louisiana, Oklahoma, North Carolina, Texas, and West Virginia. Now let’s see what kind of scale these two companies may give Altice in the US cable space compared to some of its peers.

The largest US cable player is Comcast (CMCSA) (CMCSK). The second-largest player in the US cable space is the new Charter Communications (CHTR), which was formed by the joining of Charter, Time Warner Cable (TWC), and Bright House.

At the end of 1Q16, Time Warner Cable and the old Charter Communications had ~16.1 million and ~6.8 million customer relationships, respectively. At the end of 2015, this figure was ~2.5 million for Bright House, according to Charter.

Meanwhile, Cablevision was much smaller than Comcast and new Charter Communications. Cablevision had ~3.1 million customer relationships at the end of 1Q16. Note that the same figure for Suddenlink was ~1.6 million at the end of 1Q16.

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Growth dynamics of internet and video bases of Cablevision and Suddenlink

In terms of high-speed data customers, as of the end of 1Q16, Cablevision and Suddenlink had ~2.8 million and ~1.3 million customers, respectively. Both companies continued to witness growth in this segment’s customer base YoY (year-over-year) by the end of the quarter.

Meanwhile, the pay TV bases of these players continued to shrink during 1Q16. At the end of 1Q16, Cablevision and Suddenlink had ~2.6 million and ~1.1 million video customers, respectively.

For diversified exposure to some of the largest cable companies in the United States, you may want to consider investing in the SPDR S&P 500 ETF (SPY). The ETF held a total of ~0.88% in Comcast (CMCSA) and Cablevision (CVC) on May 20, 2016.


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