Market Insight

Altice adopts unified brand ahead of further expansion

May 25, 2017  | Subscribers Only

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Altice will rebrand its portfolio of businesses under its own name, as part of a new unified global branding strategy. This will help Altice to reposition itself in the French market, while uniting its US operations before pursuing further M&A opportunities in the country, potentially including an entry into the mobile and content markets after further expansion in the cable market.

Altice has benefited from record-low interest rates to fulfil a debt-fuelled expansion. In recent years, the company has acquired SFR, France’s second largest wireless operator, Portugal Telecom and US cable operators, Cablevision and Suddenlink. This has led to Altice possessing an array of brand names and assets across its territories, resulting in the company’s decision to unite its businesses under the Altice brand name.

Altice will also use a new brand slogan, 'Together has no limits', which reflects Altice’s belief in the long-term convergence between telecoms, content and advertising. In addition to the aforementioned telecom assets that Altice has acquired, the company has invested in premium content, and acquired Teads, the number one video advertising marketplace in the world.

However, there are some exceptions to Altice’s unified global branding strategy. Altice operates a number of sub-brands, such as Red in France and Mocho, Uzo, and Sapo in Portugal, which will keep their distinct names and branding. The names of Altice’s French news publications, Libération and L’Express, will also maintain their existing names, as will Altice’s English language television network, i24News. 

Our analysis

Altice’s decision to switch to a unified brand across each of its markets suggests a growing confidence in the strength of its international brand. The company will incur considerable upfront costs to rebrand stores and company premises. More importantly, Altice is replacing a number of brands that are well-established locally and it will have to spend extensively on marketing to inform customers of the new brand and its values, presenting both an opportunity and a threat. It is for these reasons that Liberty Global has not rebranded many of the cable assets it has acquired in recent years.

A unified branding strategy is also a risk due to linguistic differences in Altice’s markets. This is why Telefónica operates several brands across its footprint. Telefónica uses the Movistar brand in its Spanish-speaking markets, Vivo in Brazil, and O2 in the UK and Germany. However, for Altice, IHS Markit believes the move to a unified brand strategy is motivated by a number of wider strategic issues.

Switching to the Altice brand is part of Altice’s wider plan to turn around SFR’s performance in France, where it has lost 1.6 million mobile subscribers since 2015. SFR has suffered as a result of intense price competition among mobile operators, in addition to the underwhelming rollout of its LTE network. In an attempt to alter this, SFR invested considerably throughout 2016 in order to improve its mobile network. However, the company has struggled to alter customer perceptions.  The brand refresh, combined with sufficient marketing spend, should help reposition the Altice brand at the premium end of the mobile market. SFR’s move to secure premium sports rights should help support this, and further differentiate the company from its competitors. IHS Markit expects SFR’s rebrand to coincide with the promotion of its exclusive broadcast of live Champions League football, which begins in August 2018. Finally, the move to maintain the existing Red brand in France is sensible in light of the high levels of price competition from low-cost operators, such as Orange’s SOSH.

Like many operators, Altice has suffered from a decline in demand for the traditional telecom services it offers within the B2B segment. The launch of a new unified and international brand can be used to address new growth opportunities in B2B markets and increase awareness of Altice’s services, especially among MNCs. In addition to its vast network infrastructure assets, Altice has a range of experience in IT services in France, where it offers cloud, hosting, and IP-VPN.

Altice also owns one of the world’s largest data centres in Portugal, via its acquisition of Portugal Telecom, and is developing its capabilities in data analytics. This is underpinned by its acquisition of Teads and appointment of Paul Haddad as Global Data Officer with a remit to expand the global data business based around the convergence of telecoms, media, content and advertising. The launch of a single brand can be used to position Altice as an integrated supplier of IT services to enterprises throughout multiple markets. Proximus successfully used this approach in Belgium, and gained a 4.7% increase in B2B revenues due to growth in cloud, security and outsourcing services.

Research by Market
Mobile & Telecom
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