Marc Sirota, Altice USA Inc.’s CFO, spoke about the company’s strategy for growth at the New Street Research Fiber to the Future conference. He has been with the company for a year and brings with him what he says is the right experience to return Altice USA to consistent, dependable growth.
“When I was looking at the company from the outside,” said Sirota, “it was clear to me that a turnaround was very achievable based on my past experience, so fundamentally, I just have a belief that we could turn the company around.”
Sirota said the formula for successful turnarounds depends on four things.
“One is a complete cultural growth mindset,” he said. “You really just have to have a belief that you can win and then just back it up with the operational chops and the rigor to make it happen. Two, you have to have the right team on the bus in the right seats and ensure that there is trust and a willingness to push through and beyond the status quo. Three is really ‘what gets measured gets done’—that old adage. There is just a complete focus on data and knowing everything you possibly can about your customers. The fourth one is you have to strategically invest in the business to drive long-term sustainable growth. You just can’t cost-cut your way to growth; you have to invest in the business and really invest in the most important things.”
That’s the formula Sirota said is being deployed at Altice.
“The first step,” he said, “has been transforming every aspect of this organization, and I mean everything: culture, operational execution, go-to-market strategy, the quality, the technology, the product development, financial discipline, literally the list goes on and on.”
This transformation also extends to improving the customer experience.
“Over the past 18 months,” he said, “we knew that customer experience had to be our most important product. The competition is fierce, so there’s just this renewed focus on the quality like never before—quality products, quality network, quality service.”
Banking on the long term
Sirota reported that Altice is focused on long-term growth and isn’t going to make changes for short-term benefits that will hinder growth down the road.
“For the first quarter,” he said, “we expect broadband losses to be consistent with what we saw in the fourth quarter. However, we’re going to continue to remain very disciplined and focused on profitable growth. We’re looking to maximize customer lifetime value, and that’s key. And we think, over the long term, there is a path to return growth, and to that end, we’ve introduced a lot that will help us get there, but in a profitable manner.”
The company has added new pricing and packages, advanced technology across all of its channels, and has brought on a new agency in the first quarter, which Sirota said will unlock a new go-to-market strategy.
“It’s going to be hyperlocal—a true local ground game,” he said. “We’re going to play offense; we’re going to do it with optimized marketing and messaging. We’re going to continue to do what we’ve been doing, which is investing in CX and NPS and customer-based management. We’re going to engage with our customers like we never have before. We’re going to continue to make investments in the network because quality really matters. And then we’re just going to continue to focus on expanding our footprint too; we serve some of the fastest growing markets in the U.S., so we want to seize those opportunities.”
Attaining broadband subscriber growth
Sirota said he was optimistic that Altice could achieve positive broadband subscriber growth, but it may take time.
“We’re going to continue to focus on profitable growth, and we’re going to do things that drive customer lifetime value,” he said. “I mean, our strategy focuses really on two problems in our minds: things that we can control, such as operational efficiencies. But there are certainly things that we can’t control: competition, microeconomic and macroeconomic factors. So, the timeline will be influenced by consumer behavior, other microeconomic factors, and the competitive landscape.”
Sirota said fiber is just one of the levers that Altice can pull for sustainable growth, but a holistic look at the business revealed to him that operational execution and go-to-market strategy were pivotal.
“We have this incredible network that passes 2.7 million homes,” he said, “and so I think you’ll see more of our focus will be on driving customers onto the network where we see the benefits, and then we’ll, overtime, continue to expand, but we can moderate that.”
Taking a balanced approach to growth
Sirota relayed that Altice is pleased with the impact a pricing overhaul had on ARPU and churn, with the latter reportedly at an all-time low. He believes ARPU growth will be supported by taking a more disciplined approach to video pricing, driving mobile business, driving new and existing customers—especially fiber customers—up tier, and new AI capabilities that the company has launched over the past six months.
“We had, historically, a one-size-fits-all approach to ARPU erosion,” he said. “Now, with our advanced AI capabilities, we can literally tailor every conversation and action to an individual customer.”
Sirota believes that a balanced focus on short-term demands and long-term sustainability is key to growth.
“Certainly, we could try to drive volume at the cost of rate—that’s not healthy for the business. Conversely, we could try to drive rate at the cost of volume—that’s also not healthy. So, we’re going to take a balanced approach.”
Instead of reaccelerating fiber construction, Altice is focusing on maximizing its existing assets.
“Let’s focus on the highest ROI areas,” he said. “As an example, and you can see it in the numbers: We’re shifting more of our focus to driving more customers onto the fiber network. So we’re pulling back on increasing our fiber passings, and we’re more focused around driving customers onto the network and driving penetration.”
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