We haven’t heard a lot of bad news about ISPs lately since most are doing well financially. One of the most troubled ISPs in the news for the last several years has been Altice. There were rumors in the financial press recently that the company has been working with creditors to restructure its $25 billion in debt to avoid bankruptcy.

Altice USA is led by Patrick Drahi, who also owns Altice France. The America company spun off into a separate corporation in 2018. The American company was formed in 2016 from the acquisition and merger of Suddenlink Communications and Cablevision. The combined companies had about 4.6 million broadband customers at the time, making them the fourth largest cable company after Comcast, Charter, and Cox.

It’s been clear for years that anybody who watches the ISP market that Altice USA has been struggling. In 2016 the company announced it was going to convert all of its cable DOCSIS networks to fiber, making it the first cable company to fully pursue that upgrade. However, the fiber upgrades quickly slowed down. In 2024, Altice added 210,000 fiber passings to bring reach 3 million fiber passings out of its total of 9.8 million passings. During this slow transition, the companies older DOCSIS 3.0 networks have been falling behind expected performance and the company has been losing broadband subscribers. Since the end of 2022, the company shed about 6% of its broadband customers, with only Lumen doing worse among the largest ISPs.

The company also has struggled with customer service and has fallen to near the bottom in the national rankings of public satisfaction with ISPs. Earlier this year, the company reached a $119.5 million settlement with West Virginia related to complaints about the company’s quality of service. That settlement included roughly $3 million in fines, $4 million in customer refunds, and the rest pledged for broadband improvements. If the improvements aren’t in place by the end of 2027 there will be an additional $40 million fine.

But the big albatross for the company has been the giant bond payments coming due. I’ve been reading Wall Street analysts for several years who have predicted the eventual bankruptcy of the company. It was clear in looking at the annual reports a few years ago that the company would have a huge problem in restructuring billions in debt in an environment where any new loans have a higher interest rate than the old ones.

There was a rumor a year ago that Charter was thinking about buying or merging with Altice, but that never materialized.

Altice France is also in the news. The company recently reached an agreement with lenders to convert outstanding debt into equity. Various lenders held more than $25 billion in Altice debt. The two primary lenders took 45% equity in the company. For that equity, the lenders will forgive $9 billion in debt and extend the remaining debt maturities into the future. The new creditor/owners will get two seats on the Board. This doesn’t necessarily leave Altice in a strong position since it will still be saddled with $16 billion in future debt. For those not aware of the structure of many corporate bonds, the typical terms include a big balloon payment at the end. During the life of the bond, the borrower pays interest only with no principal payments.