Altice USA hasn’t outlined the economic model for its ambitious fiber-to-the-premises upgrade, but the operator is pretty well positioned to pull it off, particularly in the highly concentrated former Cablevision Systems properties serving parts of New York, New Jersey and Connecticut, according to an industry analyst who keeps close tabs on the fixed broadband sector.
Altice USA is in “unique spot” in that it is already relatively fiber-rich in the Optimum (former Cablevision) footprint, Jeff Heynen senior research analyst for SNL Kagan, said.
For starters, those systems already average 300 or fewer homes per node, he said. Additionally, its Lightpath division, which serves large business customers, has “tremendous” rights of way access, interconnection fiber points, and a bunch of buildings already connected to fiber.
Heynen also agreed that Altice USA’s preponderance of aerial plant in those areas will help because it means the operator won’t need to do a lot of expensive and disruptive trenching.
Those combination of factors, he said, will help to reduce Altice USA’s exposure to the biggest expenses it will face with the FTTP upgrade – labor and right-of-way access.
The Suddenlink footprint is more rural and, therefore, much different, but tends to serve areas where there’s more housing growth, presenting the operator with greenfields that are more optimal for FTTP deployments.
Given the difference in geographies also partly spells out why Altice USA has committed to upgrade to FTTP in the full Optimum footprint and most – but not all – of the Suddenlink footprint over the next five years.
Though most MSOs won’t go for a full-scale upgrade like Altice USA is pursuing, Heynen does expect some tier 2/3 cable ops move forward on similar strategies amid competitive pressures and because they could make better financial sense in these smaller doses.
“I still think he majority of operators will follow that DOCSIS path for as long as they can,” he said. “But it shouldn’t be surprising if other operators, including larger ones, commit to a larger fiber footprint buildout than what they’re currently doing.”
Altice USA’s plan isn’t great news for DOCSIS vendors, but many of those suppliers, like Arris, have already added PON and other FTTP technologies to their arsenals, or have added cable tech products and expertise to their FTTP lineup.
“If you’re a vendor and weren’t hedging bets on DOCSIS having a finite lifespan, then that is the wrong bet,” Heynen said. “At this point, with how operators are thinking about their access networks, all technologies are on the table.”
He said traditional DOCSIS tech players will also be aided by specs that allow the provisioning of DOCSIS to run on PON networks.
“It’s a little easier than starting from scratch,” he said.