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Altice (ATUS) Expands Boston Metro Fiber Network Footprint

Altice USA, Inc. ATUS recently announced that its Lightpath business unit will expand the fiber network footprint in the Boston metro region to better serve the customers with improved connectivity. The 75-mile expansion aims to add eight new municipalities to the Lightpath network with a serviceable business market of more than 2,000 organizations.

Altice owns a 50.01% controlling interest in Lightpath, which delivers business services via fiber to larger customers and business enterprises. Its fiber-optic network offers a comprehensive portfolio of custom-engineered connectivity solutions. Lightpath marked its foray into the Boston metro region in the second quarter of 2021 with the buyout of three regional fiber network service providers. Thereafter, it expanded its market presence with 50 additional route miles in fourth-quarter 2021 and even set up a regional office.

The current expansion is likely to be implemented in two phases – the first phase is likely to be completed later this year, with Phase 2 aiming for completion in 2023. The network expansion is designed to offer two geographically diverse routes between Boston and the western region, connecting various critical area data centers in between. With this, customers will have access to the entire Lightpath network throughout Greater Boston and more than 18,000 routes miles of network in New York Metro, connecting above 12,000 locations, more than 75 data centers and seven cable landing stations.

Altice has been accelerating the pace of its network rollouts. It is witnessing strong momentum in customer penetration, typically reaching about 40% within a year of the rollout in new-build areas. The company witnessed robust demand for its broadband service in fourth-quarter 2021 with more than 50% of customers sticking to plans with download speeds of 200 Mbps or less. The company has accelerated the deployment of 1-gig speeds, which are currently available in more than 92% of its geographical footprint. It remains positive on the future of its FTTH (fiber-to-the-home) deployment initiatives and is confident of delivering Capex and Opex efficiencies following the completion of its FTTH build.

Altice is on track with its five-year plan to build a FTTH network and deploy its home communications hub. It believes that the FTTH network will be more resilient with reduced maintenance requirements and lower power usage. Altice is building a fiber network to deliver broadband speeds of up to 10 Gbps, which underscores its investment in technology.

The stock has lost 66.5% over the past year against the industry’s rise of 5.3%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Altice currently carries a Zacks Rank #5 (Strong Sell).

Viavi Solutions Inc. VIAV, carrying a Zacks Rank #2 (Buy), is a solid pick for investors. It delivered a modest earnings surprise of 15.6%, on average, in the trailing four quarters. Earnings estimates for the current year for the stock have moved up 10.8% since March 2021, while that for the next year is up 9.2%.

Viavi boasts a comprehensive product portfolio that offers end-to-end network visibility and analytics that help build, test, certify, maintain and optimize complex physical and virtual networks. Its wireless and fiber test solutions are in the early stages of a multi-year investment cycle fueled by the transition of OEMs and service providers to superfast 5G networks. Viavi expects growth to be driven by the secular demand for 5G wireless, fiber and 3D sensing.

TESSCO Technologies Incorporated TESS, carrying a Zacks Rank #2, is another key pick. It delivered an earnings surprise of 55.4%, on average, in the trailing four quarters.

Earnings estimates for TESSCO for the current year have moved up 28.8% since March 2021. It offers products to the industry’s top manufacturers in mobile communications, Wi-Fi, wireless backhaul and related products. With more than three decades of profound experience, TESSCO delivers complete end-to-end solutions to the wireless industry.

KVH Industries, Inc. KVHI is also a Zacks Rank #2 stock. It delivered an earnings surprise of 20%, on average, in the trailing four quarters.

Despite global supply chain disruptions, KVH Industries is driving growth and margin expansion through new product introduction and subscriber migration to High-Throughput Satellites. The company aims to make decisive inroads into the still-nascent autonomous transportation markets with a strong balance sheet and zero debt. If KVH Industries manages to effectively mitigate supply chain woes, there could be boost room for cash flow expansion.


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