Altice USA reported a hefty increase in capital spending in the first quarter of this year on the back of an accelerated FTTH network rollout plan, another sign that investment in fibre is gathering pace across the Atlantic.

The US cable operator, which now prefers to refer to itself as a broadband and video services provider, shared the news as part of a set of first quarter financial results that must have made tough reading for shareholders.

Capital expenditure for the three months to the end of March came in at $582.9 million, that’s more than $190 million, or 49%, more than in the same quarter a year earlier, mainly driven by accelerated fibre-to-the-home rollout and new builds, the company said.

No one said fibre rollout would come cheap, but the problem for Altice is that revenue growth did not come close to matching the increase in capex. Quite the opposite, in fact. Turnover fell by 5.3% in Q1 to $2.29 billion, hit mainly by a decline at the operator’s biggest revenue stream: the residential market. Residential revenue fell by 5.6% to $1.81 billion as both customer numbers and ARPU dropped.

As such, Q1 capex represented an eye-watering 25.4 percent of revenue, falling to a much more comfortable 14.1% if FTTH and new builds are taken out of the equation. That’s an important metric, when you consider the willingness of investors to plough money into fibre build at present, particularly in the US. The publication of Altice USA’s numbers, for example, coincided with the news that United Arab Emirates-based Mubadala will spend US$500 million for an unspecified minority stake in Brightspeed, which aims to roll out fibre to 3 million homes and businesses over the next five years.

While Altice’s numbers looked pretty poor – it posted significant declines in adjusted EBITDA, cash flow and net profit too – fibre does seem to be a promising market. Its overall unique customer relationships were down to 4.85 million at the end of March from 5 million a year earlier, but within that, FTTH uptake is growing. It ended the quarter with almost 210,000 FTTH customers, the vast majority being residential, up from 81,000 a year earlier. Meanwhile, it’s network passed 2.4 million homes, up from 1.3 million.

Altice USA is making a lot of progress on fibre, but at present it is taking its toll on the balance sheet. However, it’s worth noting that the operator left its full-year capex guidance unchanged at $1.7 billion-$1.8 billion – that’s around 18%of its full year 2022 revenue, incidentally – which indicates that it is all planned spend.

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