Verizon FiOS Braces for Altice Optimum Market Entry: Jeff Kagan

Jeff Kagan  |

Image source: Altice USA

It looks like we are getting ready to see another competitive battle. This time it is in New York and the tri-state market. Altice USA (ATUS) is getting ready to go into direct competition with Verizon (VZ) FiOS, according to Altice CEO Dexter Goei. Today, Altice reaches 1.26 million people and is planning on reaching 1.5 million by end of 2021. Goei says Altice is planning to move into the Verizon FiOS market area by expanding its network by another million next year.

This sounds like big news and a real competitive threat to Verizon FiOS. Yes, a battle is brewing, but the real question is, will this really matter much to either Verizon, Altice, their customers, investors or the entire industry?

FiOS was never the big success that Verizon hoped for

On one hand, Verizon FiOS has been in the marketplace for years. So, facing real competition from Altice will indeed be a real problem they must face.

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On the other hand, FiOS has never really generated the kind of business Verizon had originally anticipated. It’s a small player in a land of television giants.

So, while FiOS is a profit center and area of potential growth for Verizon, and while it would prefer to keep the marketplace to itself, the question is, how big a deal will this Altice move actually be?

Keep in mind that Altice is the nation’s third largest cable television company behind Comcast Xfinity and Charter Spectrum.

Altice is losing broadband customers and needs to grow

As such, it is always looking for new growth areas. While Altice has moved into wireless with Altice Mobile and other services, at this point the excitement and growth seems to be slowing down.

Like Verizon FiOS, Altice seems to be struggling as well. The company is losing broadband customers. In fact, it lost thousands of broadband customers in the third quarter alone.

So, Altice needs to expand its market area and win more customers to try and make-up for what it is losing in its core market.

Long-term, it does not look like the broadband business is that healthy for Altice… but could things change? That’s what the company is hoping.

Neither Verizon FiOS nor Altice is in position of strength

So, neither Verizon FiOS nor Altice is coming at this competitive battle from a position of any strength.

That is a concern.

I don’t see anything coming to the rescue with Verizon FiOS to supercharge success. Not yet anyway. It has been a lukewarm service at best, for quite a long time.

Because Altice needs to find new customers, it is expanding its market to include New York and the tri-state area.

Could be great news for Altice and Verizon customers and investors

This is a marketplace which has lots of potential users in a smaller geographic area. That means it’s less expensive to reach more users. So, geographically, this makes sense.

So, now we must sit back and watch this battle develop.

At this point, I don’t expect a heavyweight boxing match. So far, this looks more like a battle of the lightweights in broadband.

However, we need more top-quality, low-cost broadband providers. So, if this works, it could be great news for both this market area, but also for potential expansion beyond.

We may be surprised by Altice, Verizon FiOS battle

Maybe my first take is wrong. After all, this competitive battle could indeed heat up. The marketing minds behind this new battle could transform this sleepy conflict into a full-fledged war. Let’s hope that’s what happens.

That’s what both Altice and Verizon believe. So, let’s give them the benefit of the doubt. Both could really use this shot in the arm. The customers could use another low cost, high quality broadband provider, and investors could use a strong and growing business as well.

 

Jeff Kagan is an Equities News columnist. Kagan is a Wireless Analyst, Technology Analyst and Commentator who follows Telecom, Pay TV, Cloud, AI, IoT, TeleHealth, Healthcare, Automotive, Self-Driving cars and more. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan and on LinkedIn at www.linkedin.com/in/jeff-kagan/.

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Equities News Columnist: Jeff Kagan

Source: Equities News

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

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