Altice Management Reorg Calms Investors... for Now
Altice NV Co-Founder and billionaire Patrick Drahi took back the reins of the financially troubled telco and cable operator, hoping to appease investors by reuniting his former c-suite team and build on the opportunities it's created through acquisition and fiber deployments across Europe and North America. So far, Wall Street approves.
The move -- which saw CEO Michel Combes resign after approximately a year in that position -- is part of a "new management and governance structure is designed to better implement Altice’s strategy, create clearer accountability amongst management and improve the operational and financial performance of the business," Altice wrote in a statement.
Altice USA's stock grew +5.8% after its MVNO deal with Sprint was announced. And it's up again today 15 cents, at the time of this writing, or 0.68%, according to Seeking Alpha. (See Altice USA & Sprint Sign MVNO Pact.)
On Nov. 3, the operator suffered its worst day, shedding more than 20% of its value and losing almost €6 billion ($7 billion) off its market capitalization, Reuters reported.
The highly leveraged balance sheet created a net debt of about $50 billion. That represents a net debt to EBITDA ratio of about 5.3x for its most recent financial quarter, wrote financial blogger The Outsider on Seeking Alpha this morning.
Europe accounts for about 57% of Altice's revenue, followed by the United States, which represents 35%. Israel and the Dominican Republic generate the rest of the provider's revenue. Wireline accounts for about 60% of revenue, and Altice has mobile services in all markets except the US -- hence its recent partnership with Sprint.
Like other operators, Altice faces tough competition from peers and over-the-top providers, mobile operators and webscale companies. It's an acquisitive firm that's heavily focused on cost cutting, but has not done a stellar job of integrating its acquired assets, the Seeking Alpha blog said.
"Going forward, Altice’s strategy is to expand fiber and have more in-house content, continue to improve efficiency and offer better customer service. This should lead to higher operating margins, but revenue growth may be harder to resume until more industry consolidation occurs, especially in France where the competitive environment remains fierce," the blog said.
— Alison Diana, Editor, UBB2020. Follow us on Twitter @UBB2020 or @alisoncdiana.
In a flurry of activity throughout the week, Donald (DJ) LaVoy, Deputy Under Secretary for Rural Development at the US Department of Agriculture, and his team spent about $145.8 million in the non-urban or suburban areas of seven states.
Calix reported revenue of $120.19 million – up 4% – in Q4 2019, putting a bounce in the step of company president and CEO Carl Russo and a shine to Calix's ongoing transition from hardware vendor to a provider of platforms enabled by cloud, APIs and subscriber experience.
Looking to curtail e-waste and improve the bottom line, BT will require customers to return routers and set-top boxes, although subscribers will not have to pay a fee when they receive regular broadband equipment.
The industry standards organization is looking to ease operator pain from residential WiFi, while it also sees initiatives in connected home and other projects bear fruit.
Deploying DOCSIS 3.1 across its entire footprint gave Rogers Communications the ability to offer speeds of up to 1 Gbit/s, contributing to a broadband segement that generated about 60% of the Canadian operator's $3.05 billion (US) in Q4 cable earnings.
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