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Altice sees subscriber recovery but revenue and earnings tumble

Altice Europe saw a recovery in its subscriber numbers in France in the quarter to September but at the cost of a reduction in revenue and profitability.

Altice hailed a strong commercial performance and headlined “more than one million customers won back in France” in its results release.

The operator added 52,000 fixed broadband customers in Q3 compared with a loss of 75,000 last year, including 64,000 new fibre customers. Its launch of an OTT TV offering resulted in 114,000 OTT net additions for RMC Sport.

Altice’s French mobile base grew by 378,000 net additions, up from 16,000 last year.

Alain Weill

In Portugal the company recorded 8,000 net new customers compared with a loss of 11,000 last year. Fibre net additions amounted to 44,000.

On the downside, Altice Europe took a hit on revenue, which tumbled by 4.6% at constant currency, and EBITDA, which fell by 6.8%. The company said it its statement that the increase in subscribers in France and Portugal would translate into improved financial performance next year.

On the company’s quarterly earnings call, CEO Alain Weill said that Altice had started to see revenue flow in from its ownership of Champions League football rights, with new OTT customers and SFR customers signing up. He said RMC Sport was at the point of surpassing two million customers.

Weill also said that the sale of a 50% stake in Altice’s French tower business is expected to close “in the coming weeks” which, combined with the already completed sales of tower businesses in Portugal and the Dominican Republic, is expected to net €2.5 billion.

Also speaking on the conference call, president and Altice founder Patrick Drahi said that ownership of infrastructure and content together “makes a big difference” for the long-term prospects of the company compared with peers. He said the new subscribers exiting promotional discounts leading to increased content revenues combined with increased wholesale and B2B revenues meant that “we are all super-confident for next year”.

Drahi also said that he was “very open to sell a piece” of the SFR French cable network if “somebody loves it as much as I do”. He said Altice had received offers from “many potential financial partners” to collaborate on the build out of fibre networks to new areas.

Drahi said that Altice was expanding its broadband reach from 9.5 million homes passed with cable to potentially 15 million homes passed with either fibre to the home or fibre to the building. He said that the other half of France’s homes would be passed using third-party networks.