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Altice Sees Mobile Business Turning a Profit in Its First Year

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Comcast lost $185 million through wireless business

Cable provider Altice USA (ATUS) is on track to begin offering wireless services starting in 2019. The Altice wireless service is expected to be anchored on Sprint’s (S) network. Charter Communications (CHTR) and Comcast (CMCSA) have also launched wireless services, and both use the Verizon (VZ) network.

Comcast lost $185.0 million through its wireless business in the second quarter. Some analysts estimate that Comcast has lost roughly $1.2 billion through its wireless business since it began offering wireless services in May 2017.

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Altice’s revenues jumped nearly 2%

Altice believes it can do better than Comcast by running a profitable wireless business beginning in the first year of operation. Altice’s revenues grew 1.8% year-over-year to $2.4 billion in the second quarter, but the company posted a loss of $98.0 million in the quarter. 

Selling pay-TV subscriptions is Altice’s largest business, contributing 43.8% of total revenues in the second quarter. However, traditional pay-TV companies are under pressure from cord-cutting, where households are canceling cable television subscriptions in favor of online video services.

Diversifying the business

Altice also offers Internet access and advertising services. Although a venture into wireless is expected to allow the company to further diversify its business, the US wireless market has become more competitive.

In addition to challenging cable peers Charter Communications and Comcast in the wireless market, Altice’s wireless venture would also put it on a collision course with wireless incumbents such as Verizon, AT&T, and Google (GOOGL), which runs Project Fi. Google’s Project Fi launched in 2015 and utilizes Sprint (S), T-Mobile, and US Cellular networks, offering talk, text, and data services.

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