Optimum’s third-quarter results reflect challenges from FWA and aggressive fiber-overbuilders
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Optimum may be making progress in the broadband market, upgrading its fiber and HFC networks to support multi-gig speeds, but the cable MSO’s customer base was affected by third-quarter promotional offers from a mix of fixed wireless access (FWA) and a crop of new fiber overbuilders.
As a result of these dynamics, Optimum lost 58,000 broadband subscribers.
A key challenge Optimum faced against FWA and fiber overbuilders was price. Although FWA may not offer the same perceived speeds and reliability as wireline HFC or fiber broadband services, it has resonated with consumers seeking low-cost options. The monthly cost for FWA offerings from Verizon and T-Mobile typically ranges from $30 to $60.
Dennis Mathew, chairman and CEO of Optimum, told investors that competitors in the second half of the quarter elevated their marketing spend and elevated FWA activity.
“We continue to operate in a challenging market, characterized by historically low growth, intensified competition, and ongoing consumer financial strain as more providers compete for fewer, increasingly price-sensitive customers,” he said. “This dynamic has led to elevated subscriber acquisition spending across the industry.”
He added that “late in the quarter, we saw competitors ramp up promotions and significantly increased marketing spend, often combining deep discounts with aggressive add-on offers, which impacted our ability to capture win share.”
Creating customer stickiness
To battle FWA and fiber overbuilders, Optimum has focused on what it calls a hyperlocal strategy.
The hyperlocal strategy focuses on tailoring internet, mobile, and content offerings to specific communities under its Optimum and Suddenlink brands, using deep local data to enable flexible pricing, bundles (broadband + mobile), and targeted advertising to compete with national players and Fixed Wireless Access (FWA) providers.
However, the company realized it needed a flexible go-to-market approach to compete more effectively.
Mathew noted that some competitors are offering 4 months of free service, $500 in incentives, free streaming, and gigabit service.
“While we saw some benefits from our hyperlocal strategy, we must be bolder,” he said. “We have to accelerate and drive our marketing to tell that story more effectively across the West. And in the East, we have to do a much better job of really showcasing that our product's superiority against fixed wireless and our value proposition.”
As Optimum expands its product portfolio and increases penetration across both new and existing offerings.
“Our goal is to create stickier customer relationships, compete more effectively, and capture additional revenue opportunities over time,” Mathew said.
Scaling fiber, HFC
Amidst a challenging competitive environment, Optimum continued to scale its network in the third quarter, adding 51,000 total passings and 30,000 fiber passings.
With a focus on fiber, Optimum added over 175,000 new passings in fiscal year 2025. On the HFC side, the service provider performed mid-split DOCSIS 3.1 upgrades to deliver multi-gig speeds.
“The majority of our passing growth in 2025 is expected to come from new fiber deployments,” said Marc Sirota, CFO of Optimum.
He added that it is also upgrading parts of its HFC network to enable multi-gig speeds. “We continue to deploy mid-split upgrades at a low cost per passing and expect to begin marketing a 2 Gbps HFC service in our first market later in November,” Sirota said.
These efforts appear to be paying off, as Optimum added about 40,000 customers to its fiber network and ended the quarter with over 700,000 fiber customers. Mathew said this “represents a penetration rate of 23% across our fiber network.”
Mobile, Lightpath show revenue promise
While Optimum’s third-quarter total revenue declined 5.4% year-over-year, driven in part by declining video subscriptions, Optimum saw revenue momentum in both mobile service and its carrier/business Lightpath division.
Mobile revenue grew 38% as it added 38,000 mobile lines in the third quarter, representing a year-over-year increase in mobile line growth. However, with only 35% of its mobile customer accounts subscribing to more than 1 line, Mathew sees a growth opportunity within its mobile segment.
“We are evolving our mobile strategy with more attractive, simplified pricing that makes it easier for customers to add lines and bundle services,” he said. “Specifically, we have a heightened focus on driving multiline adoption, strengthening broadband convergence and enhancing pricing and offer competitiveness.”
LightPath also had a profitable quarter, growing by nearly 6% on strong fiber sales to hyperscalers.
For the full year, Optimum expects to offset most of its revenue pressures through continued improvements in programming and direct costs, while managing expenses in line with the lower revenue environment.
Video also affected residential APRU, which declined 1.8% year over year to $133.28. During the quarter, video contributed to a $3.16 decline year-over-year in total residential ARPU.
Sirota said that while “video continues to be the most significant driver of our revenue declines, we have successfully slowed the rate of decline by adding incremental subscribers to our new video tiers, and we expect this trend to continue.”
Optimum saw improvement across all other service revenues, contributing to a $0.68 year-over-year increase, driven in part by rate discipline and growth in mobile and new product sell-in.
Siorta noted that “even with improving margins, video's revenue pressure remains the biggest factor weighing on top line and ARPU performance.”
Broadband ARPU also dipped slightly year over year to $74.65; Optimum attributed this to seasonal trends and expected low promotional roll-off volumes.
Sirota said Optimum expects full-year 2025 broadband ARPU “to increase slightly year-over-year, supported by anticipated growth in the fourth quarter.”
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Sean Buckley
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