What to Expect of CVC’s Internet Proposition Going Forward
An Update on Altice's Cablevision Acquisition
Better Internet proposition for Cablevision’s customers
Earlier in this series, we learned about the progress in Altice’s (ATCEY) Cablevision (CVC) acquisition, which is currently under regulatory review. This is Altice’s second cable transaction in the United States after Suddenlink Communications.
Altice plans to improve overall Internet speeds in Cablevision’s footprint. According to the FCC (Federal Communications Commission), Altice plans to offer minimum Internet speeds of 300 Mbps (megabits per second) in Cablevision’s footprint.
According to a report by Bloomberg, one of the recommended conditions for the merger by the advisory staff for New York regulators was that “Altice should increase broadband speeds by the end of 2017 and offer discounted Internet service to low-income customers.”
Cablevision and Verizon Fios
Better Internet speeds in the future are particularly important for Cablevision considering the high penetration level of its broadband services and the significant overlap of Verizon (VZ) Fios in its footprint. As of the end of 1Q16, high-speed data penetration in Cablevision’s serviceable passings was 55.6%, as per the company.
According to Cablevision, Verizon and Frontier Communications (FTR) are its competitors. Verizon Fios competes with Cablevision in the majority of its footprint as of the end of 1Q16, as per Cablevision’s estimate. Note that Verizon Fios is a fiber-based voice, video, and Internet service. Its FTTP (fiber-to-the-premises) Internet speeds are between 50 Mbps and 500 Mbps.
Meanwhile, Frontier competes with Cablevision in its Connecticut service area, as per CVC.
For diversified exposure to some of the largest cable companies in the United States, you may consider investing in the PowerShares QQQ Trust, Series 1 ETF (QQQ).
The ETF held a total of ~3.5% in Comcast (CMCSA) (CMCSK) and Charter (CHTR) on May 23, 2016.
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