- Like Lumen and Zayo, Lightpath is zeroing in on AI and data center connectivity as a way to drive growth
- Altice USA said its Lightpath long-haul fiber business has nearly $1 billion in AI deals in the pipeline
- Altice plans to bring multi-gig speeds to 65% of its footprint by 2028
We’re well aware Altice USA is pushing the pedal to the metal on fiber broadband deployments to cope with continued broadband subscriber losses. But what isn’t so much in the spotlight is Altice’s foothold in the booming artificial intelligence (AI) space, through its subsidiary Lightpath.
Lightpath, a long-haul fiber provider jointly owned by Altice and Morgan Stanley Infrastructure Partners, saw its best revenue performance yet in 2024, Altice USA CFO Marc Sirota noted on the company’s Q4 earnings call.
That growth was fueled by – you guessed it – AI and data center connectivity.
As of the end of 2024, “LightPath's AI-related infrastructure connectivity sales pipeline totaled nearly $1 billion across 10 markets,” Sirota said.
The company already reeled in almost $110 million in hyperscaler contracts last year. Additionally, Lightpath closed its acquisition of United Fiber and Data. The deal saw the company acquire a new long-haul route between New York and the major data center hub of Ashburn, Virginia, connecting Lightpath to “one of the largest data center markets in the world.”
All told, Altice sees Lightpath as “a strategic asset to drive growth in the years ahead,” said Sirota. It’s got good reason to think so, given major long-haul players Lumen and Zayo are also cashing in on the AI gold rush to the tune of billions of dollars.
Lightpath, which counts around 11,000 fiber route miles across the country, provides connectivity for not just hyperscalers but also enterprises in healthcare, finance and education, among other sectors.
Aside from building out its long-haul footprint, Lightpath last year hired Rachel Stack as its first chief financial officer. Stack, who previously served as CFO of data center company Cologix, has said the fiber optic network is “poised to benefit from the hyperscale and the AI revolution.”
Multi-gig moves
In tandem with its earnings report, Altice unveiled plans to deliver multi-gig internet speeds to 65% of its residential and enterprise broadband footprint by 2028. The move includes both continued fiber expansion as well as mid-split upgrades, and the latter involves increasing the amount of spectrum (up to 85 MHz) allocated for upstream traffic flow.
As Altice juggles its network expansion with broadband declines, it’s also undertaking a slow but steady trek to cut costs and stabilize operations.
CEO Dennis Mathew said Altice is on track to deliver another 175,000 homes passed in 2025, the bulk of which will be fiber. He estimated the cost per passing to fall between $800 to $900 per home.
New Street Research expects Altice to have roughly $1.3 billion in capex through 2028 dedicated to fiber rollouts and mid-split upgrades.
For fiber, “we assume a connect cost of $450 per home,” said NSR’s Jonathan Chaplin in a note to investors. “We assume that the rest of the multi-gig homes they have guided to are upgraded with a mid-split at $125 per home.”
Indeed, Altice execs feel bullish that the operator can get its network upgrades done in a “capital-efficient manner,” particularly with the HFC part of the network. Mathew noted Altice historically had to spend “tens of thousands of dollars” for expensive node splits. But that won’t be the case for its mid-split strategy, which will give Altice’s customers up to 2 Gbps in downstream speeds.
“There is a lot of power that we're unlocking in the HFC side,” Mathew said.
Note that Altice’s cable upgrades are for the DOCSIS 3.1 modem. The company so far hasn’t announced plans to shift to distributed access architecture and DOCSIS 4.0, which would enable symmetrical speeds of up to 10 Gbps.
However, Altice does offer a symmetric 8-gig plan for its fiber customers, as do providers like Google Fiber, Kinetic and TDS.