Altice Wants to Lure You From Your Cell Phone Provider With $20 a Month Plan

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Altice USA CEO Dexter Goei
September 9, 2019

Can a legacy cable company change the landscape of the U.S. wireless market?

Altice USA, the New York-based cable TV provider and parent company of Cheddar, is betting that it can shake up the field of wireless carriers by offering an innovative new form of coverage at a bargain-bin price: $20 a month.

Altice USA CEO Dexter Goei spoke to Jon Steinberg, president of Altice News and Cheddar founder and CEO, after ringing the opening bell at the New York Stock Exchange Monday to celebrate the launch of Altice Mobile. That service, known as a MVNO (mobile virtual network operator), amounts to Altice's first foray into the wireless business as it and its competitors continue to diversify from their one-time main businesses of providing cable television. Rather than build out its own costly wireless infrastructure, Altice struck a deal with AT&T and Sprint to use their already established networks, with the addition of thousands of Altice's own "small cells" that act essentially as mini cell towers, through which the wireless traffic is switched.

In addition to allowing for the low cost, the unusual model means "we have the ability to always go to better strength of signal," Goei said, because the service can effectively "choose" between the AT&T and Sprint networks, depending on which is stronger.

"Fundamentally, you're getting the best service from the best network that's out there."

Further, if and when the T-Mobile-Sprint merger is completed, Altice Mobile customers will gain access to that enlarged network, Goei said.

Altice Mobile is the latest example of a legacy cable provider dipping its toes into the super-competitive wireless market. Spectrum and Comcast both offer similar cell phone plans, but at price points around $45. For early adopters, Altice customers can lock in a base rate of $20 per month, and non-Altice customers who live near the company's cable and broadband footprints can get the service for $30 per month.

Those prices include data, text and talk nationwide, access to mobile hotspots, video streaming, and international text and talk to 35 countries, Goei said.

Shares of Altice USA ($ATUS), which spun off from the Dutch telecom giant Altice and entered the U.S. market four years ago with its acquisition of Cablevision, are up more than 70 percent year-to-date as the company ramps up an investment cycle, which included the acquisition of Cheddar this summer.

"Everything we've talked about over the last three years, we've actually over-delivered on," Goei said. Altice Mobile joins a portfolio of consumer-facing products like the Altice One cable box and Altice Amplify smart speaker, content plays like Cheddar and News 12 (now part of Altice News), and A4, a multichannel ad-buying business.

Acknowledging that, like other cable providers, Altice faces an existential threat from the cord-cutting phenomenon, Goei said the company is laser focused on providing its customers with "simplicity, pricing, and service." A $20 cell phone plan is a fundamental part of that strategy, he added.