Altice USA, Inc. (ATUS): Business Model Canvas [11-2024 Updated]
- ✓ Fully Editable: Tailor To Your Needs In Excel Or Sheets
- ✓ Professional Design: Trusted, Industry-Standard Templates
- ✓ Pre-Built For Quick And Efficient Use
- ✓ No Expertise Is Needed; Easy To Follow
Altice USA, Inc. (ATUS) Bundle
As a leading provider of broadband and telecommunications services, Altice USA, Inc. (ATUS) operates with a robust and strategic business model that drives its success in a competitive market. This blog post delves into the Business Model Canvas of Altice USA, exploring key components such as partnerships, value propositions, and revenue streams. Discover how Altice USA leverages its resources and activities to deliver exceptional services to its diverse customer segments.
Altice USA, Inc. (ATUS) - Business Model: Key Partnerships
Collaborations with content providers
Altice USA has established significant partnerships with various content providers to enhance its service offerings. Notable collaborations include:
- Partnerships with major networks such as NBCUniversal, which provide a wide array of programming including sports, news, and entertainment.
- Agreements with streaming services like Netflix and Hulu, allowing customers to access popular streaming content directly through Altice's set-top boxes.
As of September 30, 2024, Altice reported total revenue of $6,719,390, with residential video revenue contributing $2,210,156.
Partnerships with technology vendors
Altice USA collaborates with leading technology vendors to enhance its infrastructure and service delivery. Key partnerships include:
- Collaboration with Cisco for network infrastructure improvements, resulting in enhanced broadband speeds and reliability.
- Partnerships with software providers for customer relationship management and billing systems, improving operational efficiency.
Capital expenditures for technology upgrades reached $1,042,975 for the nine months ended September 30, 2024.
Agreements with local municipalities for service delivery
Altice USA has formed agreements with local municipalities to facilitate service delivery and expand its reach. These partnerships are crucial for:
- Obtaining necessary permits and rights-of-way to deploy infrastructure in various regions.
- Engaging in community initiatives that enhance broadband access, particularly in underserved areas.
Franchise fees paid to municipalities amounted to $52,510 for the three months ended September 30, 2024, reflecting Altice's commitment to local partnerships.
| Partnership Type | Key Partners | Impact on Revenue/Operations |
|---|---|---|
| Content Providers | NBCUniversal, Netflix, Hulu | Residential video revenue: $2,210,156 |
| Technology Vendors | Cisco, various software providers | Capital expenditures: $1,042,975 |
| Local Municipalities | Various local governments | Franchise fees: $52,510 |
Altice USA, Inc. (ATUS) - Business Model: Key Activities
Network infrastructure development
Altice USA invests heavily in its network infrastructure to enhance service delivery and expand its customer base. For the nine months ended September 30, 2024, the company reported capital expenditures of $1,042,975 compared to $1,409,561 in the same period of 2023. This includes significant investments in scalable infrastructure, fiber and coaxial cable, and network upgrades.
| Type of Expenditure | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Customer Premise Equipment | $297,520 | $240,715 |
| Network Infrastructure | $392,837 | $776,594 |
| Support and Other | $191,402 | $174,364 |
| Business Services | $161,216 | $217,888 |
By the end of September 2024, Altice USA reported a total of 9,784.7 thousand passings, indicating the number of single residence homes, apartments, and commercial establishments served by its network.
Customer service and support
Customer service is a critical component of Altice USA's business model. The company emphasizes the importance of providing effective support to retain customers and enhance satisfaction. In the nine months ended September 30, 2024, net cash provided by operating activities was $1,142,479, a decrease from $1,330,185 in the same period of 2023. This decline is attributed to various factors, including increased interest and tax payments, which can impact the resources available for customer support initiatives.
| Metric | 2024 | 2023 |
|---|---|---|
| Net Cash from Operating Activities | $1,142,479 | $1,330,185 |
| Total Customer Relationships | 4,595.9 | 4,772.6 |
| Residential Customers | 4,217.5 | 4,391.5 |
The reduction in total customer relationships from 4,772.6 thousand in 2023 to 4,595.9 thousand in 2024 reflects challenges in customer retention, which underscores the need for robust customer service strategies.
Marketing and advertising initiatives
Altice USA employs comprehensive marketing strategies to promote its services. For the three months ended September 30, 2024, news and advertising revenue amounted to $117,682, up from $107,484 in the same period of 2023, reflecting a 9% increase. This growth is largely driven by increased digital advertising efforts, particularly in political advertising.
| Type of Revenue | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 |
|---|---|---|
| News and Advertising Revenue | $117,682 | $107,484 |
| Other Revenue | $14,689 | $11,335 |
Overall, Altice USA's marketing initiatives, including digital platforms, are critical in driving customer engagement and revenue growth. The company's total revenue for the nine months ended September 30, 2024, was $6,719,390, a decrease from $6,935,452 in the same period of 2023.
Altice USA, Inc. (ATUS) - Business Model: Key Resources
Extensive fiber-optic network
Altice USA operates an extensive fiber-optic network that covers approximately 9.78 million passings as of September 30, 2024. This network enables the company to provide high-speed broadband, video, and telephony services to residential and business customers. The fiber-to-the-home (FTTH) segment includes over 2.89 million FTTH passings. The penetration rate of total passings stands at 47.0%.
Experienced workforce
Altice USA's workforce includes skilled professionals across various domains, contributing to the company's operational efficiency. The company reported approximately 17,000 employees as of the last fiscal year. Employee-related expenses, including salaries and benefits, amounted to $674.6 million for the nine months ended September 30, 2024. The human capital is essential for maintaining the network, customer service, and overall business operations.
Proprietary technology platforms
Altice USA utilizes proprietary technology platforms that enhance service delivery and customer experience. These platforms support functionalities such as video on demand, broadband services, and mobile services. The company has invested heavily in technology, with capital expenditures totaling $1.04 billion for the nine months ended September 30, 2024. The adjusted EBITDA for Altice USA was reported at $2.57 billion for the nine months ended September 30, 2024.
| Key Resource | Details |
|---|---|
| Fiber-optic network | 9.78 million passings, 2.89 million FTTH passings |
| Employee count | Approximately 17,000 employees |
| Employee-related expenses | $674.6 million (nine months ended September 30, 2024) |
| Technology investment | $1.04 billion capital expenditures (nine months ended September 30, 2024) |
| Adjusted EBITDA | $2.57 billion (nine months ended September 30, 2024) |
Altice USA, Inc. (ATUS) - Business Model: Value Propositions
High-speed broadband services
Altice USA offers high-speed broadband services that cater to a diverse customer base. As of September 30, 2024, broadband revenue was reported at $913,417,000 for the third quarter, a decrease from $961,751,000 in the same quarter of 2023. For the nine-month period ending September 30, 2024, broadband revenue totaled $2,745,400,000, down from $2,884,661,000 in 2023. This decline is attributed primarily to a decrease in broadband customers and lower average recurring revenue per customer.
Comprehensive bundle of video and telephony services
Altice USA provides a comprehensive bundle of video and telephony services, which significantly contributes to its value proposition. Video revenue for the third quarter of 2024 was $715,117,000, down from $775,818,000 in the third quarter of 2023. For the nine-month period, video revenue was $2,210,156,000, compared to $2,321,557,000 in the previous year. Telephony revenue also saw a decline, recording $69,877,000 in Q3 2024, down from $73,640,000 in Q3 2023, with a total of $212,545,000 for the nine months ending September 30, 2024.
Competitive pricing and promotional offers
Altice USA maintains competitive pricing and promotional offers to attract and retain customers. The average revenue per user (ARPU) for the residential segment was reported at $135.77 as of September 30, 2024, slightly down from $138.42 a year earlier. The company continues to implement promotional strategies to enhance customer acquisition and retention, despite the challenges posed by a competitive market environment.
| Service Type | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | 9M 2024 Revenue (in thousands) | 9M 2023 Revenue (in thousands) |
|---|---|---|---|---|
| Broadband | 913,417 | 961,751 | 2,745,400 | 2,884,661 |
| Video | 715,117 | 775,818 | 2,210,156 | 2,321,557 |
| Telephony | 69,877 | 73,640 | 212,545 | 227,390 |
| Mobile | 30,563 | 20,320 | 82,935 | 53,993 |
Altice USA, Inc. (ATUS) - Business Model: Customer Relationships
Customer support via multiple channels
Altice USA, Inc. employs a multi-channel customer support strategy, which includes phone support, online chat, email, and social media. The company aims to enhance customer satisfaction by providing accessible support options. As of September 30, 2024, Altice reported a total of approximately 4,595.9 thousand customer relationships, reflecting a decline from 4,772.6 thousand in September 2023.
Engagement through loyalty programs
Altice USA has developed loyalty programs targeting both residential and SMB customers. These initiatives are designed to increase retention and encourage customer engagement. The company has noted an increase in mobile service revenue, which rose to $30,563 million for the three months ended September 30, 2024, compared to $20,320 million in the same period of 2023, indicating a successful engagement strategy.
Personalized marketing strategies
Personalized marketing is a core component of Altice USA's customer relationship management. The company utilizes data analytics to tailor marketing efforts for different segments. The average revenue per user (ARPU) as of September 30, 2024, was $135.77, slightly down from $138.42 in September 2023. This indicates that while there are fluctuations in revenue, targeted marketing strategies remain crucial for driving sales.
| Metrics | September 30, 2024 | June 30, 2024 | September 30, 2023 |
|---|---|---|---|
| Total Customer Relationships | 4,595.9 | 4,652.0 | 4,772.6 |
| Residential Customers | 4,217.5 | 4,272.3 | 4,391.5 |
| SMB Customers | 378.4 | 379.7 | 381.1 |
| Average Revenue Per User (ARPU) | $135.77 | $135.95 | $138.42 |
| Mobile Service Revenue | $30,563 | $420.1 | $20,320 |
Through these comprehensive customer relationship strategies, Altice USA continues to adapt to the changing market dynamics while focusing on customer satisfaction and revenue growth.
Altice USA, Inc. (ATUS) - Business Model: Channels
Direct sales through online platforms
Altice USA leverages its online platforms for direct sales, facilitating service sign-ups and customer support through its website. In 2024, the company reported a total of 4,595.9 thousand customer relationships, with a significant portion acquired via online channels. The average revenue per user (ARPU) for residential customers was $135.77.
Retail stores for service sign-ups
In addition to online sales, Altice USA operates physical retail stores that serve as critical touchpoints for customer interactions. These stores not only allow customers to sign up for services but also provide support and troubleshooting. As of September 30, 2024, the total customer relationships included approximately 4,217.5 thousand residential customers, indicating the importance of in-person interactions in customer acquisition and retention.
Partnerships with third-party retailers
Altice USA has established partnerships with third-party retailers to enhance its reach and facilitate service sign-ups. This strategy has contributed to the company's ability to expand its customer base efficiently. The company reported that its total passings reached 9,784.7 thousand as of September 30, 2024. The collaboration with retailers allows for broader distribution of services, leveraging existing retail networks to attract new customers.
| Channel Type | Customer Metrics (as of 09/30/2024) | Revenue Impact |
|---|---|---|
| Online Platforms | 4,595.9 thousand customer relationships | ARPU: $135.77 |
| Retail Stores | 4,217.5 thousand residential customers | Significant customer acquisition |
| Third-party Retailers | 9,784.7 thousand total passings | Expanded distribution of services |
Altice USA, Inc. (ATUS) - Business Model: Customer Segments
Residential customers seeking broadband
As of September 30, 2024, Altice USA reported approximately 4,217.5 thousand residential customer relationships, with a significant portion utilizing broadband services. The total number of broadband customers was 4,039.5 thousand, contributing to broadband revenue of $913,417 thousand for the three months ended September 30, 2024, reflecting a 5% decrease compared to $961,751 thousand for the same period in 2023.
Small and medium-sized businesses (SMBs)
For the same period, Altice USA had approximately 378.4 thousand SMB customer relationships. The company generated $366,355 thousand in business services and wholesale revenue for the three months ended September 30, 2024, a slight decrease from $366,852 thousand in the prior year. SMB customers primarily consume broadband, video, and telephony services, although specific revenue breakdowns for SMBs are not explicitly detailed in the reports.
Enterprises requiring customized solutions
Altice USA provides tailored solutions for enterprise customers, with contracts typically spanning three to five years. For the three months ended September 30, 2024, the company reported $1,100,506 thousand in business services and wholesale revenue for the nine months ended September 30, 2024, compared to $1,095,197 thousand for the same period in 2023. This revenue is primarily derived from the sale of fiber-based telecommunications services to enterprise clients.
| Customer Segment | Number of Customers (thousands) | Revenue (thousands) |
|---|---|---|
| Residential | 4,217.5 | $913,417 |
| Small and Medium-sized Businesses (SMBs) | 378.4 | $366,355 |
| Enterprises | Not specified | $1,100,506 |
Altice USA, Inc. (ATUS) - Business Model: Cost Structure
Significant capital expenditures on infrastructure
The capital expenditures for Altice USA, Inc. for the nine months ended September 30, 2024, amounted to $1,042,975 thousand, compared to $1,409,561 thousand for the same period in 2023. This decline reflects a strategic focus on optimizing spending while maintaining essential infrastructure upgrades.
| Year | Capital Expenditures (in $ thousands) |
|---|---|
| 2024 | 1,042,975 |
| 2023 | 1,409,561 |
Capital expenditures primarily include investments in scalable infrastructure, network extensions, and customer premise equipment. For 2024, the company continues to prioritize investments in fiber infrastructure to enhance service capacity and customer experience.
Programming and content acquisition costs
Programming costs for Altice USA totaled $711,330 thousand for the three months ended September 30, 2024, and $2,174,677 thousand for the nine months ended September 30, 2024. This represents a decrease from $750,538 thousand and $2,284,537 thousand for the same periods in 2023, respectively. The changes in programming costs are mainly affected by the number of video customers and contractual rate adjustments.
| Period | Programming Costs (in $ thousands) |
|---|---|
| Q3 2024 | 711,330 |
| Q3 2023 | 750,538 |
| 9M 2024 | 2,174,677 |
| 9M 2023 | 2,284,537 |
In addition to programming costs, Altice incurs content acquisition expenses that include fees paid to content providers and the costs associated with new channel launches. The company expects programming costs to continue rising due to contractual rate increases, despite the decline in video customers.
Operational expenses including marketing and customer service
Operational expenses for Altice USA, which encompass marketing, customer service, and general administrative costs, amounted to $674,564 thousand for the three months ended September 30, 2024, and $2,019,356 thousand for the nine months ended September 30, 2024. These figures reflect a slight increase from $667,278 thousand and $1,974,651 thousand for the respective periods in 2023.
| Period | Operational Expenses (in $ thousands) |
|---|---|
| Q3 2024 | 674,564 |
| Q3 2023 | 667,278 |
| 9M 2024 | 2,019,356 |
| 9M 2023 | 1,974,651 |
These operational expenses include costs related to staff and employee benefits, customer service operations, network management, and sales and marketing activities. The increase in operational expenses is driven by rising marketing costs and other administrative expenses, which are essential for customer retention and acquisition in a competitive market.
Altice USA, Inc. (ATUS) - Business Model: Revenue Streams
Subscription fees from broadband and video services
As of September 30, 2024, Altice USA generated broadband revenue of $913,417 thousand and video revenue of $715,117 thousand for the three months ended September 30, 2024. For the nine months ended September 30, 2024, broadband revenue was $2,745,400 thousand and video revenue was $2,210,156 thousand. This represents a decrease in broadband revenue of 5% and video revenue of 8% compared to the same period in 2023, attributed to declines in the number of broadband and video customers.
Advertising revenue from digital platforms
Advertising revenue for Altice USA, which includes news and advertising, was $117,682 thousand for the three months and $328,687 thousand for the nine months ended September 30, 2024. This marks an increase of 9% for the three months and 3% for the nine months compared to the same periods in 2023, driven primarily by growth in digital advertising, particularly political advertising.
Business services and wholesale contracts
Business services and wholesale revenue amounted to $366,355 thousand for the three months and $1,100,506 thousand for the nine months ended September 30, 2024. This represents a slight decrease of 0.1% for the three months but an increase of 0.5% for the nine months compared to the same periods in the previous year. The revenue is primarily derived from the sale of fiber-based telecommunications services to the business market and broadband, video, telephony, and mobile services to small and medium-sized business (SMB) customers.
| Revenue Stream | Q3 2024 Revenue (in $000s) | Q3 2023 Revenue (in $000s) | Year-to-Date 2024 Revenue (in $000s) | Year-to-Date 2023 Revenue (in $000s) | Change Q3 2024 vs Q3 2023 | Change YTD 2024 vs YTD 2023 |
|---|---|---|---|---|---|---|
| Broadband | $913,417 | $961,751 | $2,745,400 | $2,884,661 | -5% | -5% |
| Video | $715,117 | $775,818 | $2,210,156 | $2,321,557 | -8% | -5% |
| Advertising | $117,682 | $107,484 | $328,687 | $319,686 | +9% | +3% |
| Business Services & Wholesale | $366,355 | $366,852 | $1,100,506 | $1,095,197 | -0.1% | +0.5% |
Updated on 16 Nov 2024
Resources:
- Altice USA, Inc. (ATUS) Financial Statements – Access the full quarterly financial statements for Q1 2025 to get an in-depth view of Altice USA, Inc. (ATUS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Altice USA, Inc. (ATUS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.