Would you like pommes frites with that?
Keep prices U.S. high and expenses European low. That’s the plan that Altice has for Suddenlink and Cablevision, if its allowed to buy the two broadband companies. At a New York conference last week, Altice chairman Patrick Drahi said he likes Cablevision’s average monthly revenue per subscriber – $159 – but not its cost structure, which includes hundreds of executives making more than $300,000 a year and ageing infrastructure that’s costly to maintain. According to a story in Multichannel News…
Drahi said that he sees opportunity to cut operating costs by improving the network – pushing fiber into the home and eliminating amplifiers and other electronic equipment. Drahi continually compared Cablevision’s network to Altice’s French Numericable unit, adding that despite Cablevision’s size and market density, its costs are higher.
But chopping suits and adding fiber won’t be enough. Multichannel News quotes analyst Craig Moffett as saying subscribers will feel the pinch too…
“Cost reductions like those won’t just mean cutting SG&A. It will mean slashing customer service; repair and maintenance, and sales and marketing (specifically, channel mix optimization, and back-office upgrades).”
Altice’s acquisition spree isn’t over, according to Drahi, who said he’s interested in buying any U.S. cable system available. As it stands now, though, Suddenlink and Cablevision make an odd couple, with the latter heavily concentrated in the New York metro area and the former lightly spread over scattered, mostly rural markets, including some in California.
So far, Altice’s purchase of a controlling stake in Suddenlink has met little opposition in California, where it is still under review. That could change, though, as post-takeover plans become clearer.