Nick Brown – Investor Relations Michel Combes – Chairman and Chief Executive Officer Dexter – Chairman and Chief Executive Officer-Altice USA Dennis – Chief Financial Officer Michel Paulin – Chief Executive Officer-SFR Telecom.

San Dhillon – Exane Lizzie Dove – Goldman Sachs Stephane Beyazian – Raymond James Russell Waller – New Street Research Vincent Maulay – Oddo Dimitri Kallianiotis – Redburn Jonathan Dann – RBC Daniel Morris – Barclays Jakob Bluestone – Crédit Suisse Emmanuel Carlier – ING Bank.

Hello, everyone, and welcome to Altice and SFR’s Q1 2017 Earnings Call. In a moment, I will hand you over to Michel, with Dexter and Dennis, who will take you through the presentation. As today’s presentation may contain forward-looking statements, please read the disclaimer on Page 2 of this presentation.

The slides are available on the company’s website, and a replay of this call will be available for the next month. And with that, it’s my pleasure to hand over to Altice’s CEO, Michel Combes..

Thank you, Nick. Let me give the key takeaways for Q1 on Slide 4. We begin 2017 with another quarter of successful execution and accelerated growth. In France, Q1 has concerned the stabilization in revenues as our investments are really paying off.

Altice USA continues to grow strongly at the same time, as improving margins and improving customer service metrics. And we are primed for an IPO as we prepare for the next phase of this business. We’re also concerned with stabilization revenues in Portugal while we push ahead with our accelerated fiber rollouts.

And we continue to strengthen our balance sheet, achieving significant interest cost savings recently. Slide 5 summarizes our current group financial profile in Q1. We are growing revenue in low single digits, EBITDA almost 10%, and operating free cash flow over 20%. We are in a strong position in all of our individual markets.

And together, we are one diversified group all moving in the same direction with one coherent strategy. That means we’re investing growing cash flow and attracting the best talent to provide the best customer experience, the best infrastructure, and the best content.

Slide 6 is another reminder that the Altice model is driving positive results in every market. All our businesses contributed positively to the group’s revenue growth in Q1. This sets us very nicely for the rest of the year. Moving to Slide 7. We said it before.

If you want to grow and remain a market leader, you need to invest in the best infrastructure. We have committed to achieve national-wide fiber rollouts well in advance of our peers. And we are taking this experience to the U.S., leveraging our group R&D center as it lasts.

Chart here for France and Portugal shows the significant progress of our fiber rollouts since we have raised investments. This is also forcing everyone around us to invest more. We welcome more infrastructure-based competition rather than just price-based competition. We know we have the right scale and strategy to compete very well on this basis.

Slide 8 is a reminder of our five year Generation Gigaspeed network upgrade plan, which has now commenced. We have already significantly improved broadband services to our customers.

So this new plan will deliver our next-generation fiber-to-the-home network ultimately capable of delivering broadband speeds of more than 10 gigabits across Optimum’s network and part of Suddenlink’s footprint. We are the only cable operator committing to do this now even though fiber, in our opinion, is the future.

Moving to Slide 10 and France, where you can see how revenues continued to be stable in Q1 after years of declines. Since we have taken over SFR, the revenue trend has improved significantly. We continue to invest in improving network quality, customer experience, and content bundles to reduce the churn of SFR’s customer base.

Margins have taken a temporary step back because of the additional content investments to more quickly stabilize revenues and our customer base. We believe this is the right strategy given the market remains very competitive.

SFR’s mobile network is better than ever, with the mobile customer base continuing to grow in Q1, actually at a faster pace than last quarter. And we are very focused on stabilizing the fixed customer base in a similar way. But remember, at the same time, management is executing a company transformation.

We completed the restructuring of the distribution business by the end of Q1, and we are planning the next phase of the voluntary plan, which will start in July. So we are executing on multiple fronts right now.

Of course, there are some areas where we know we can do better, but my main message today is that the team is working extremely hard and we are on track. On Slide 11, you can see our B2C business in France and return to revenue growth. 0.4% year-over-year growth.

This has been driven by both the fixed and mobile trends improving, with fixed revenue growth accelerating to 2.4% in Q1 and total mobile revenue declining just 0.8%. Mobile service revenue, meaning excluding equipment, has actually returned to growth, plus 1.5% year-over-year in Q1.

SFR’s B2B segment has also been supported by significant improvements in SFR mobile network quality, as I will now explain. Moving on to Slide 12. The evidence is clear. We have caught up with the investments we have made in SFR mobile network.

As you can see on the left, our 4G rollouts have been the factors in the market since Altice took control, with SFR overtaking Orange in terms of number of 4G sites in Q1. And we continue to be the market leader in terms of number of 4G Internet, now reaching 88% population coverage.

This investment has led to a significant increase in the quality of SFR mobile network services, as you can see in the latest nPerf data on the right. This ranks SFR second now for all technologies combined, 2G, 3G and 4G, and the best operator for 4G+ coverage.

This is one of the best quality improvements ever recorded in nPerf’s history, showing our investment strategy is paying off. Now we want to be the best, so we are still pushing to improve the quality even more. Slide 13 focuses on our B2C mobile postpaid trends which improved again in Q1 as these network quality improvements are now coming through.

As you can see on the left-hand side of this slide, we added 68,000 new customers this quarter and our postpaid ARPU increased by 3.6% year-over-year, probably benefiting from the introduction of our content bundles last year. Another factor supporting our mobile growth which I want to highlight is the success of our convergent SFR FAMiLY! offers.

As you can see on the right, we have seen a strong uptake of these offers since they were introduced, especially for customers with additional mobile lines. These convergent offers allow us to access all family members in one single home, and we are seeing lower churn for these customers as we think they really understand the value of these bundles.

Now moving to look at our French B2C fixed business on Slide 14. It’s important to understand fixing the mobile business was the top management priority last year as it remains the biggest part of our French business, representing about half of the revenue. And we recently on this team ph this has been done very successfully.

The next important part of the business we focus on turning around is the fixed business. Our DSL trends are getting better, as you can see at the bottom part of the chart, with minus 79,000 net losses this quarter, which is actually the lowest number of losses since we took over SFR.

On the fiber side, net additions are in line with recent quarters but remains below our target. However, we are taking the right steps to improve these trends, as we explain in more detail on the next slide, 15. Here, we show the time line for fixed trends to continue to improve in 2017.

First, we are fully aligning our customer product equipment across all technologies, which will make fiber migration easier. Second, on the content side, following the launch of SFR Presse, SFR sport channels, and BFM Paris, we have now added Discovery and NBCU channels, and we’ll add our movie channel later this year.

And today, we have confirmed Champions League. For Q2, we have reshaped some of our DSL offers to attract and retain more customers in this segment before we complete our fiber deals. We in-sourced our main suppliers, which is giving us more end-to-end control of the customer experience.

As we completed the restructuring of our distribution business by end of Q1, we have reorganized management with everyone now incentivized on the right basis. And lastly, our FTTH rollouts will accelerate as we near completion of the upgrade of the legacy cable network so we can offer a much faster and more resilient service.

Turning to our Portuguese business on Slide 16. Like France, you can see how revenues continued to be stable in Q1 after years of declines, which were also much worse before Altice took over. We continued with nationwide FTTH rollouts, but at an accelerated rate, reaching 3.2 million homes passed at the end of Q1.

So we are on target to reach about 4 million homes passed by the end of 2017 to become the fiber market leader. As we expand the network, fiber growth is still accelerating with plus 31,000 net adds in Q1. This fiber growth is helping offset higher DSL/DTH churn.

The focus now is on reducing overall fixed customer losses, and we have incurred a bit of higher content costs near term with the sports rights sharing deals to help achieve this. And now I turn over to Dexter for his review of Altice USA customers..

Thank you, Michel. Starting on Slide 17 and a summary of Altice USA’s revenue dynamics. Pro forma revenue growth was 3.8% year-over-year in U.S. dollar terms in Q1. The growth continues to be faster than Suddenlink and Optimum had been growing prior to our acquisitions of those businesses.

Broadband is a key contributor here as we’re seeing more and more demand for higher-speed tiers. But we are expecting better video unit performance as we introduce our new home entertainment hub next month. As we invest more into our networks as well, we should see continued improvement in customer service metrices and reduced churn.

Lastly, we have now integrated Audience Partners into our data analytics business, and remain very excited about how we can do in this area. On Slide 18, you can see how we’ve had a positive year-over-year customer and ARPU trends, again both for Optimum and Suddenlink, which is driving the accelerated revenue growth.

On the left-hand side, you can see Optimum residential B2C revenue has been driven by 0.7% growth year-over-year in unique customer relationships, with ARPU growing at 2.4% on a constant currency basis. For Suddenlink on the right-hand side, it was driven by 1.4% growth in unique customers and 4.1% growth in ARPU year-over-year.

Despite continued strong competition from Verizon and other players, it’s worth noting Optimum video customer losses in Q1 were in line with Q1 of 2016. So we’ve not seen any deterioration at all in video units. And that’s before we launch our new home entertainment hub next month.

Suddenlink has been a bit more impacted on the video side by aggressive price competition from satellite and other players in Q1, but we believe our new home entertainment hub will put us in a much stronger position here. And the broadband growth and penetration of higher speeds is a really strong offset right now.

On Page 19, my favorite slide, you can see how our early investments and efforts to simplify bundle offers continued to deliver great results.

The proportion of Altice USA’s new residential customers taking high-speed broadband packages increased again to 66% in Q1 from 15% in Q4 2015 when we closed Suddenlink, with a proportion of our customer base enjoying over 100 megabits increasing from 9% to 26% since Altice took control of Suddenlink and Optimum.

This follows our network upgrade to offer all customers across the entire Optimum service area nearly triple the speeds they could get before, and continuing the Operation GigaSpeed network upgrades at Suddenlink, such that about 60% of the footprint can now get up to 1 gig.

As a result, the average broadband speeds delivered to Altice USA’s customers have increased significantly to 70 megabits in Q1 2017 from less than 50 megabits in 2015.

On Slide 20, we summarize Altice USA’s margin progression where you can see we’ve now reached 41.4% adjusted EBITDA margins on a combined basis in Q1 with the operating cash flow margin at 34.2%. Of note, this operating cash flow margin is higher than the EBITDA margin was in Q4 2015.

CapEx was a bit lower in Q1 because of the phasing of our new FTTH upgrades since we were in design stages. But still, it’s interesting to note that the operating cash flow margin is now above the combined EBITDA margin from before, when we took over the businesses.

We are seeing the same kind of programming inflation as everyone else, but we continue to offset this by focusing on reducing non-programming OpEx per subscriber at the same time as investing for growth and better customer service. This strategy is working very well. Page 21, we want to show and illustrate our simple FTTH upgrade strategy.

First, to clarify, we’re doing a fiber deep upgrade at Suddenlink, extending the existing fiber in the network which we have to the node, moving from N+5 and above to N+0 ph in part of the footprint. This will cut out the active equipment like amplifiers along the CollectPlus mile part of the network.

This is very similar to what we’ve done in France, and we’re designing it in such a way that it’s easily upgradable for FTTH and GPON technology later. This will improve network resilience, reliability, and customer service to help to reduce costs as well as reducing churn.

In dense areas at Suddenlink and at Optimum, we are leapfrogging the fiber deep upgrade, jumping a full generation, and optimizing with FTTH from the beginning, so we won’t to be constrained by the number of homes on each legacy fiber line or by the number of strands.

But we will leverage the existing poles from the legacy network since about 80% of it is aerial connections to the home. As we get critical mass on the fiber network, we will start to see less incidents of service failures, less truck rolls, and less calls.

Then we will see a further step down in OpEx as we start to reduce the amount of network architecture, which we don’t need for out-of-home WiFi.

We are very confident this differentiated network upgrade will set us up very well to compete not just on higher speeds, but on better quality of service and other value-added services, including positioning ourselves strategically very well for 5G mobile services longer term. And now I’ll hand it over to Dennis for the financial review..

Thank you, Dexter. Slide 23 shows Altice N.V.’s pro forma consolidated financials, including our media assets in France, MEO in Portugal and Suddenlink and Cablevision excluding Newsday. In December, we also announced the sale of our Belgium and Luxembourg businesses, so our perimeter also excludes that segment.

Financials include the contribution from the in-sourcing of Parilis and Intelcia in the first quarter 2017 since we completed these transactions in December last year. So they are not included in our Q1 2016 figures.

The numbers for the second tier are given on a stand-alone basis, as we’ve shown them throughout this presentation to reconcile with the local reporting, and we have given the intersegment and corporate cost adjustments to get to the Altice N.V. consolidated figures.

For the first quarter of 2017, total group revenue of EUR5.9 billion grew by 3.2% year-over-year on a reported consolidated basis, or was up 1.5% on a constant currency basis. All markets showed a positive growth both on an organic and reported basis.

Altice USA and Israel grew very strongly by 3.8% and 4.4%, respectively, on a constant currency basis, while revenue in France and Portugal have stabilized, as Michel described earlier. Group adjusted EBITDA increased by 9.5% to EUR2.3 billion or up 7.5% on a constant currency basis.

Altice USA saw another quarter of very strong growth in EBITDA of 27% in constant currency. France and Portugal EBITDA both declined by about 5% due to the new additional content cost compared to last year.

And lastly, group operating free cash flow was up 21% to EUR1.4 billion or up 19% on a constant currency basis, mainly driven by strong growth of Altice USA, growing over 50%. Slide 24 shows our usual review of our group debt structure, which reflects all our recent refinancing activity.

As before, it’s diversified across different silos with no recourse to each other. Our target leverage remains 4x at Altice Europe. That’s the consolidated view, including the Luxembourg HoldCo debt. And for Altice USA, our target remains 5 to 5.5x. Net leverage at Altice Europe on a consolidated basis was 5x at the end of the first quarter.

Leverage in France was 4x. And note that Altice has increased its stake in SFR by almost 6% through additional off-market private transactions using Altice stock. And currently, we’re owning just under 90% of SFR. Altice International leverage has increased to 3.8x and the group leverage on an LTM basis is 5.5x at the end of the quarter.

And our availability in terms of liquidity is EUR5.2 billion. On Slide 25, you can see our U.S. leverage continues to come down very rapidly.

Suddenlink leverage reduced to 5.3x on a last two quarters annualized basis, within our target range before we made dividend payments in Q4 to partially pay down the vendor note, as compared to 7.5x leverage at the time of acquisition.

Remember, we replaced the vendor note with a loan at a lower fixed interest and have made an additional dividend payment after the end of the first quarter to reduce the amount of the loan to just $170 million for now.

From a similar starting point, Optimum leverage is already down to 5.7x on a last two quarter annualized basis at the end of the first quarter, which is just above our target now.

We are very comfortable with this new leveraging profile and the long tenor of our debt, which should give us plenty of options as what to do with excess cash going forward. On Slide 26, you can see our updated maturity profile.

We have continued to refinance successfully since the beginning of the year with an additional of EUR7.3 billion equivalent of our debt amended and extended. That is now a total of around EUR30 billion of refinancing in the last year, approximately 60% of our total net debt.

The average life of our debt now is 6.5 years with an average weighted cost of 5.9% for the group. This is a cost reduction of 30 basis points since the end of 2016, generating a total of EUR34 million of annual interest savings. In addition, we have restructured and extended the maturity of the Comcast Corp.

financing, which has generated a further EUR35 million of annual interest savings. The chart showed us before that we have no major maturities at SFR or Altice International until 2022 and none at Suddenlink until 2020.

Some of Optimum’s debt matures in the near term; but remember, we still have a EUR2.1 billion revolver in place, which we can use to cover maturities for the next few years if we want. And with that, we’re now happy to take any of your questions..

Thank you. [Operator Instructions] I’ll take our first question from San Dhillon from Exane..

Hi, guys. Two questions, if I may. Firstly. On the U.S. and your broadband up-sell execution. There was a fairly visible positive impact on your ARPU. What’s less visible is any positive impact on churn. So if you can provide some color on any improved churn you’re seeing in the U.S., that’d be interesting. And secondly in France.

There’s naturally a bit of a lag effect between the reality of network quality and the customer perception of that quality.

Do you think the SFR brand is a hindrance in that respect? And would you consider rebranding as you continue with your infrastructure and content investments going forward?.

Listen, on the U.S. – churn numbers continue to improve year-over-year. We saw a slight uptick in churn in the first quarter of 2017 on the Optimum footprint, as we had a rate increase in December. But it was much, much better than we expected in terms of the impact on churn, so it was very slight increase.

So we continue to see all of our customer service metrices improving across the Optimum and Suddenlink footprints. Similarly, on the Suddenlink footprint, we continue to see churn improve year-over-year. So we’re all going in the right direction here relative to churn on both platforms..

On France, maybe just to highlight once again the network investments which had been done, if answering precisely to the question of the brand. I guess that this quarter, it’s extremely important for what has been achieved. We clearly shifted gears from a catch-up mode in terms of mobile network, to establishing clear leadership position.

We have now coverage 4G 88%. So remember that our target was 90%, and so – which means that we are clearly ahead of our target.

And on top of that, we are now leading the market in terms of 4G+ and 4G+ 300, which puts us in the best position from a mobile network point of view of recognized, yes, of course, by our customers but also by the external bodies which are assessing the policy of the networks.

so that’s really important because we can claim today the number one position in terms of mobile network for 4G and 4G+. Second, on fees. As, well, let’s say, it has always been the case, we continue to strengthen our position in terms of number of fiber homes passed. So that’s a fact clearly established, and that was the – out of our strategy.

Second, you’re right, there is still a lag in terms of perception, so we are working on this one by communicating much more to our customers, by making it known by our customers and our most non-customers. Then you are, let’s say, asking an additional question whether we should at some stage consider rebranding of our business.

We are currently evaluating the additional benefits that may accrue from the adoption of global brand, not only for France, but for our different geographies, which will communicate more clearly Altice global strategy as an innovator, disruptor and a provider of superior next-generation services to its customers. So that’s where we are.

And obviously, if we believe that it is the right way to communicate even better all the improvements which have been done, and to be more consistent along the geography – within the geographies, we’ll do it. So that’s what we are assessing right now..

We’ll now take the next question from Andrew Lee from Goldman Sachs..

Hi, there it’s Lizzie Dove from Goldman Sachs here. Two questions just on France.

Firstly, with the Champions League and Europa League rights that you’ve just announced, do you have any indication on whether you’ll be expensing or capitalizing those? And if you were to put those in OpEx, do you think you’ll have to step away from the 43% objective in terms of EBITDA margin in the immediate term? Secondly, in your previous presentations, you had some quite useful slides on the total number of calls affects customers and mobile customers.

Do you have any quarterly update on how that’s looking in France? Just for some reassurance that maybe the customer perception, in fixed, is getting better?.

So on your first question before asking Dennis to answer on the capitalization pieces, so, a, that’s a very important milestone that we have achieved today. I guess it’s a clear game changer.

We’ve – those rights will capture the best of soccer in France and in Europe, so – which really puts us once again in the Premier League, we’ll say, from a soccer point of view with the best asset in the market. You’ll remember that we have already the Premier League, the UK championship. And so now we have the Champions League.

We have always said that it was important to capture a few big and major assets in order to establish our position, and that will sustain our growth moving forward. Just to give you an idea, I mean, Canal+ and beIN are making more or less EUR4.5 billion revenue with content.

So we clearly believe that we’ll be able to capture part of this one, and so – which will sustain our growth moving forward. And that’s the reason of these investment in sports rights by, let’s say, increasing the number of customers, by reducing churn, by also delivering the type of offers through OTT offers.

Second, let’s say, from a margin point of view, we don’t change our midterm guidance for France. I mean, we have always said that we might, of course, invest slightly more in content that will reignite growth.

But we have still a huge potential moving forward in terms of cost reduction, which will allow us midterm to reach the 45% guidance that we have committed into the market.

From a, let’s say, consolidation point of view, Dennis?.

Yes, from an accounting perspective, I think we will treat likely these rights the same as we’ve done with the previous sporting rights like the Premier League, where they will be initially capitalized at the Altice International level where we have our content unit, and they will be expensed at the SFR level..

On your second question that’s to the former deals slide today on this one, as you know, that could be part our strategy, of the network, is to improve the customer experience. And so those deals are still, let’s say, being – going down, but I would like maybe Michel to elaborate a bit on this one..

So I can confirm that – you can assume we didn’t give the number – that the number of total calls for the fixed and for the mobile are done in absolute numbers. But what is more important is that the percentage of number of calls on the installed base is declining, and it’s due to two major efforts we are putting in place.

The first one is we are digitalized more and more relationship we have and the customer experience through a lot of innovations we have put in place using any type of social media and any type of ways to be connected to our customers.

And second is because – due to the fact that we have invested lots in the customer experience and the network, we see that we have less and less calls in – concerning especially the technical issues our customers are facing.

So I can confirm that those - -the number of total calls are declining, and the percentage of calls on the installed base are declining..

And I’ll take the next question from Stephane Beyazian from Raymond James..

Two questions, if I may. The first one is on France mobile.

To what extent the recovery that we clearly see in your numbers from – in terms of mobile contracts is coming from RED rather than SFR? I guess my bottom line here is that we’ve seen a step-up in promotions in the market in the first quarter, and I’m wondering if we’re not drifting slowly to a market where all the top brands, including SFR, Orange are repricing to the levels of the sub-brands, such as RED, BeIN U, or Sosh.

And my second question is just a follow-up on the comment that you made about cost cutting. On my math, but I could be wrong, the run rate of all the new content cost, adding the European football, is probably getting close to something like EUR800 million.

And I’m sorry if I’m making a mistake, but it’s quite superior to the savings from the headcount reduction that you probably estimated around EUR400 million.

Can you give a bit more color on all the incremental savings that you’re looking at and their timing?.

So first, on your second question related to cost cutting. As you know, we have a few – we had cost savings that we intend to deliver in the next coming quarters. First one is related to our personnel cost with the transformation plan, which are under way within the company.

And of course, you don’t see yet any impact of those plans even if the distribution plan has been now finalized or finished by end of March.

As the people have started to leave in Q1 and will continue to leave up to the end of Q2, you will see the EBITDA impact only – let’s say a full impact by Q3 as we recognize savings in EBITDA when people have already left the company. That will be the same for the second wave of the transformation, which will kick in, in, let’s say, summer.

And so as I have always mentioned, the full effect of those cost savings coming from personnel costs will impact fully our bottom line by 2018, where I said that it should be roughly around EUR400 million of annualized savings. Then we have a second big-ticket item, which is the costs that we incurred to use Orange network.

I – we have mentioned in different occasions that those costs were amounting to an amount of around EUR800 million per year, and we intend to, let’s say, decrease very significantly this amount while shifting towards fiber, where we do own and we do operate our own network.

So once there, again, there are few hundreds of millions of savings, which can be achieved.

And then last but not least, there are some other, let’s say, additional costs that we will be able to extract once all the transformation Michel is driving right now around IT and, let’s say, all those costs related to operations when we reduce the calls to our call centers. So that’s was – the three major cost buckets.

On top of that, obviously, when we add content in our offers, that allows us to drive revenue up and so to drive also our margin up. So all that together will result and will allow us to maintain and to deliver the guidance that I have already mentioned, this 45% EBITDA midterm guidance.

Once again, I’ve – I had said with our full year 2016 results, we definitively decided to give up some near-term margin progression with the content acquisitions to deliver a quicker and more sustainable return to revenue growth, which is, let’s say, what we believe is the most important for the mid-, long run.

Obviously, all the content investments allow us also to reduce churn, which, let’s say, add also an impact on our EBITDA margin. So that’s for your second point. On the first point concerning mobile net adds, so that the market is shifting towards the – what we call auto-serve and cMoney ph offers.

We are also shifting a bit towards, let’s say, this trend. Nevertheless, we continue to acquire, let’s say, more also complex rather than auto-serve ph So more customers through our SFR brand rather than through our RED brand.

We’re just repositioned our RED brand in the market in order to get our fair share, but we continue to do better within SFR brand rather than with RED brand. And once again, if we can do that, it’s thanks to our investments in networks and in content, which remains the act of the – strategy of SFR..

We’ll take the next question from Russell Waller from New Street Research..

Just a couple. First of all, could you talk about the impact you’ve seen from the Verizon FiOS promotion, please, in the U.S., obviously? And then secondly, just on the content strategy in France.

Could you talk a little bit about kind of what the end goal is? Will you be looking to acquire more content at – if it comes available? Would you think about charging specifically for some of the content as, for example, BT has done in the UK? Or will you simply be giving it away to existing customers to try and keep churn down and maybe even add customers and lift ARPU – existing ARPU over time?.

On your first question, I mean, if you look into the details of our earnings release, you’ll see specifically on the Optimum footprint we are flat year-over-year in terms of both unique customers’ relative growth year-over-year and as well on each of the unit line items.

So the performance has been extremely resilient on the Optimum footprint relative to competition. Clearly, with the new competition that has started, we are not seeing a material effect yet on our business in any shape or form, and we’re monitoring it very closely.

But we do have extremely great and strong customer base with very sticky customers, and churn numbers that continue to move in the right direction. Service-level stats continue to improve as well.

So the expectation is with good products and thoughtful user experience and services, that we’ll continue to compete very well against the competition here on the Optimum footprint..

On your content strategy, I guess that we have presented our content strategy on different occasions.

The goal or the purpose of this strategy is obviously to support our ARPU growth in, let’s say, the short to near term and so to improve our revenue profile, to reduce churn, and to improve brand perception, which, in turn, will allow us to support additional gross adds. We decided to go in that field.

As I have mentioned already, the content players in France are capturing between EUR4 billion and EUR5 billion per year, and we believe we can then re-internalize part of this revenue within SFR. In order to do so, we had to build a strong, appealing proposition based on three main pillars. News, we are clear one now in France on news. Second, sports.

I guess that we can say that we are clear one today now we’ve got the Champions League in sports in France as soccer is obviously the main sport in terms of audience for the customers. And the third one is around series. And as you know, we are about to launch an appealing proposition by the summer in cinema and series.

So we now have a very appealing proposition, which should allow us to deliver what I’ve mentioned up to now. In terms of financials for that, it’s obvious that we want to leverage this content to provide this content to our existing customers. But we are charging for that. That allows us to sustain a higher ARPU than our competitors.

And that will allow us to continue to increase our ARPU moving forward. And second, of course, to provide this content to non-existing SFR customers through OTT offers. And we have launched OTT offers and the customers, of course, are billed for those offers. And we start to get some good traction on these offers as well.

So we totally believe that we are in the right path and that those investments will generate a great return for our company..

Next question comes from Vincent Maulay from Oddo..

Two questions. The first one, on the – a follow-up on the content in France for the Champions League. Do you assume to set up a real distribution with your peers? Or do you expect OTT user friendly enough to gain content clients up to EUR9.9 per month? And a follow-up on the cost embedded with this Champions League rights.

For the technical side, do we talk about EUR50 million per year roughly on top of the amount of EUR250 million per year? And practically, does it mean that it’s the appropriate timing to be the – on – be in sports? And a second one on the U.S. wireless.

Dexter, what’s is your leeway to join a wireless partnership with Comcast and Charter? And how to leverage your own know-how in mobile into several countries in Europe..

So on your first question, distribution of the content. Our priority is clear, to provide, first, this new content to our customers; second, to make sure that any single household or mobile customer in France gets access to those content. We believe that OTT is the right way to do so.

We’ll see whether some additional alternatives will be considered, but we believe that by incorporating content in our offers, that being quite, let’s say, strong OTT offer, will allow us to reach of those two goals. From a cost point of view, well, I will not comment on the price of those rights. I have seen a few amounts.

We mentioned the price, which are probably consistent. Nevertheless, it was EUR15 additional. What you have to keep in mind is that those rights will be used within our existing channels.

I’m not sure if that’s exactly what you refer to with this strategical course because we intend, in fact, to, let’s say, insert and use those rights within the five sports channels that we already have. Which wil allow us to expose all the games that we have captured right now.

We’re being, let’s say – I mean, we are very happy with what we have in hand. We have built a very strong and appealing offer, and I guess that we just want to leverage now our sports – SFR Sport channels.

Dexter, for the U.S.?.

Sure. I mean, and on wireless, we’ve been pretty open to say that we are exploring all of the options available to us to think about a wireless offering here in the U.S.

And it’s clear that any alternative that we choose will involve the wealth of experience that we have in our international markets on mobile, both in terms of customer experience, customer offers, relationships with key suppliers, and technology.

That’s something that is really differentiated for us as a global group relative to some of our peers here. So – and I think it’s more of a wait-and-see. We continue to evaluate all the various options that we have in front of us..

And I’ll take the next question from Dimitri Kallianiotis from Redburn..

Just – my first question is for Dexter on the paid unit additions at Suddenlink. It got slightly worse, obviously, this quarter. So I’d like ask you if you see any change in terms of customer behavior due to cost cutting or if, as you mentioned, we should expect the net adds to get better in Q2 although Q2 is seasonally quite weak at Suddenlink.

And my second question is just regarding the useful slide you put on the network upgrade in the U.S. My question is just on the – on this wireless gateway to a further 10-gigabit speed. How is that going to work exactly? Because I’m not aware of any WiFi or WiMAX solution that can deliver that kind of speed.

I just wanted to understand a bit more technically how it’s going to work, what sort of speed your customer will get once they get upgraded..

Sure. On the first question regarding pay TV, it’s clear in what we’re seeing in terms of the dynamics that the aggressiveness, particularly of satellites, in our footprint on Suddenlink, which is being bundled with wireless, is driving some of the increased churn numbers that we’re seeing. Much less so than cord cutting.

It’s more about voluntary churn or gross adds not going our way on the video side. We’ve seen a decrease just mathematical in terms of gross adds. Q2, I don’t expect that to improve.

It is a – seasonally the weakest quarter for Suddenlink given the high amount of university talents that we have at Suddenlink, and the launch of our home hub entertainment center won’t be until the end of the second quarter.

So we’ll start seeing impacts most likely toward the end of the year in Suddenlink as we roll out primarily in a concentrated way on the Optimum footprint to start off with throughout the summer, and then start doing a – more of a nationwide footprint rollout towards the end of the summer as we go into the back-to-school campaigns on the home entertainment center.

So I think that is more of a let’s see what the numbers look like in end of third quarter, beginning of fourth quarter in terms of any impact on video RGUs. In terms of the technicalities around the fiber rollout, there’s clearly a push from our standpoint to go to a WiFi-only experience inside the home with the headless gateway technology.

We are testing levels on the WiFi that get us to 1 gig in terms of performance. Now obviously, there are very few devices out there that today can receive 1 gig in many respects inside the household.

But in terms of the technology, we’re clearly there and the modem technology and the WiFi router technology that’s inside and embedded in our home entertainment center is going to be able to deliver the best WiFi experience in the market today..

And I’ll take the next question from Jonathan Dann from RBC..

Two questions. The first, on U.S. content costs. I see you’re guiding for high single-digit content costs. I guess that’s going to be faster than revenue growth. Are you confident that there’s more cost cutting to be taken out this year? And then my second one is on French broadband. You mentioned cable or DSL-to-cable migrations.

I mean, it looks like we’re getting close to broadband parity where broadband adds are, give or take, 0.

I mean, how many cable – DSL-to-cable migrations can we expect in a sort of run rate, 2018, 2019?.

On the first question, we have been quite public when we made the acquisition about our longer-term cost cutting targets. As I mentioned in the last quarter earnings call, we’re well on our way on that and have executed over half of those targets already. That continues. You’ve seen it in our improved margin numbers in the first quarter.

And the expectation is for us to continue nicely along the track going forward. I don’t think we’re giving any guidance on speed of execution, other than continuing to reiterate what we originally said when we made the acquisitions.

In terms of content costs, yes, I think this is an industry issue where increased cost of programming continues to outpace increased revenue growth on the video side.

So this is a problem that we collectively face as an industry, but we’re very focused here on stemming that trend with the launch of our home entertainment hub center, where we think the user experience will materially change the perception of our video product going forward.

So that’s something, as I mentioned to your colleague in the previous question, that we expect to see some impact on that going into the end of this year..

Yes, on the French broadband, I mean, in fact, there are 2 points. The first one is we are – as you know, we started to push more the DSL for different reasons. What we mean by that, we mean that we have couple of new offers on the market to be able to create more DSL attraction to our offers.

And we are convinced that it creates a reservoir of homes passed we can after migrate to broadband based on fiber or on cable.

And as we are deploying more and more FTTH and we have accelerated the FTTH, I mean, deployment, we believe that also, with the second point, which is the simplification of the migration going from DSL to the fiber, we can also accelerate the migration of these customers.

How we are simplifying the migration of the customers? In fact, we have put a few initiatives and projects. The first one, as you know, we have launched new boxes, a new set top box using WiFi and the same box for our fiber and DSL, and we do believe it simplifies technically the migration from a customer perspective on the customer premises.

And secondly, due to the fact we are migrating all our base on one unique IT system and it will be finished before the end of Q3, it will help to have a smooth migration technically and from an offer perspective. And we hope that it would be 100% digital. So that’s the two reasons why we believe we can boost this migration from DSL to fiber..

Next question comes from Daniel Morris from Barclays..

I’ve got a couple of quick follow-ups on SFR, if I may.

The first one is just on – you mentioned that you now have roughly 90% ownership of the SFR asset now, and I just wondered how you weigh up the potential small cost-benefit of cleaning up the minority but also remove a small amount of dividend, I guess, if you were to pay dividends, against the multiple that, that was trading at and also, of course, other uses potentially of cash.

So just your thoughts on that. Second of all, management fees in France.

Can you just give us an update on what the process is there and any timing for that?.

Thank you. So on your first question, as you know, yes, we have the – right, it’s at 90% level through private transactions. And what we would do as a private business is not something that I intend to discuss in public, so I will not comment anymore on this first question.

As far as the management fees are concerned, we have said that, let’s say, we intend to introduce management fees or franchising fees at the SFR level. This is still under discussion, and we will update the market in due course. but that remains, obviously, the intent..

Your next question is from Jakob Bluestone from Crédit Suisse..

I’ve got a few brief questions as well. Firstly on France. Can you maybe just comment on the ARPU levels from the FAMiLY! plans, which, I guess, are sort of becoming a more important driver for your mobile net adds? And secondly, question for Dennis. Your net debt rose by about EUR300 million versus Q4 despite your strong EBITDA minus CapEx.

Can you maybe just comment on what were some of the items that came below EBITDA minus CapEx? I guess there were some timing issues related to interest, but any color you can give on why net debt rose. And then finally, just on the U.S. You obviously had quite low U.S.

CapEx this quarter, and you – and Dexter put up a slide showing your plans for – you can relatively cheaply upgrade your U.S. infrastructure. I think last quarter, you mentioned that you expect CapEx to be roughly flat versus the 2016 level.

Is that still your expectation? Or is that perhaps a little bit conservative at this point?.

Michel, FAMiLY! first..

Yes. As you’ve seen in the presentation, in fact we have a successful new offer called SFR FAMiLY! with two unique items in the market. The first one, of course, is a price incentive, which allow our customers to have a better price if they take all the services from SFR convergent services.

But on top of that, we have unique features which is that you can share data among the family. And you can give to your kids or your other elements or a person of the family data, and that can generate – generally can be shared. We believe today this is a strong asset to be able to have 100% of the family.

And we have added new offers in our SFR mobile portfolio to be able to attract the kids’ mobile and to be able to have ARPU on the FAMiLY!, which is about EUR70 per month. And definitely, this is the way we want to do so.

The second thing is that because of our differentiators in content, we believe that we are able to fulfill most of the needs of the family in mobile, in fixed, in the data, in the connectivity, but also in the content.

And you will see some of the – or further initiatives to continue to be able to have a complete offer in the FAMiLY! to be able to have 100% of the persons of a family which are using our services, and to be able to increase the ARPU and the revenue per household. This is definitely our strategy – SFR’s strategy..

Go Dex..

On the net debt, I think there are three components why we have increased net debt in the first quarter. The first component is a slightly higher cash interest cost because some of the refinancing tranches we’ve put in place last year has an initial interest period of nine months versus six months.

So that’s why you have a disproportionate cash outlay with respect to interest, especially in France. In France, we also have the gun-jumping fee of EUR80 million. And the last item is Q4 is always a CapEx-heavy quarter for us, and that results in more working capital payments in the first quarter.

So that is clearly seasonal in – what has happened in Q1..

And then maybe with respect to the last question, which is the CapEx, I think we are still standing by, I think, our guidance for the year on CapEx, which is around EUR4 billion. So there’s clearly some seasonality with respect to CapEx within the group, but we’re still confident that’s the right level of this year..

On CapEx actually, specifically, you made a comment, I think, on the Q4 call that you expected U.S. CapEx to be slight year-on-year.

Can you confirm if that’s still the case?.

I think....

Yes, in terms of – sorry, Dennis, do you want me to grab that or it’s up to you?.

Yes, yes, I don’t think – at this stage where we are, I don’t know we’re going to give individual comments by country on CapEx outlay at this stage..

We’ll take the last question from Emmanuel Carlier from ING Bank..

I have three questions. First of all, on SFR, you seek some EUR2.4 billion in damages from Orange, which is quite significantly. Could you comment, one, why is that? And then secondly, I think WIG Telecom also paid or received a settlement from Orange.

Could you remind me on the amount of that? And maybe also remind me the difference in market share between WIG Telecom and SFR and the business market in France. That’s the first one. The second one is also related to SFR.

So is it a fair assumption to say that Q1 2017 hardly included any impact from cost savings? And if I look at 2018, should I expect the full run rate of the personnel layoffs, so the EUR400 million? And on top of that, some savings via call centers or part of these savings rather to come true over the next couple of years? And then the last one is on the acquisition of Parilis and Intelcia.

Could you then maybe disclose sales, EBITDA and CapEx for Q1 2016 and Q1 2017?.

So on your second question, Q1 2017, fair to say that you see there are really no effects from, let’s say, the major cost savings initiatives that I have mentioned. EUR2 million is from, well, let’s say, from the employee costs, from the people which have the left the company in the first quarter.

The full effect will be 2018, the EUR400 million that I have mentioned, because by that time, well, the employees would have left the company.

And for the rest, meaning call centers that will also come first half in 2019, that will take a little bit more time because cost savings generated by the reduction of costs from Orange, as I have mentioned, it will be the result of the migration of our customers from DSL to fiber.

Keep in mind that we are pushing a bit more DSL than we were pushing up to now, in order to capture short-term additional customers that we will migrate later on, on fiber. So that’s for – that’s all occurred. On the B2B side, I’m going to comment, let’s say, at that stage.

I mean, as you know, Orange was, let’s say, commanded by the Autorite de la Concurrence. Based on that, we have built our own case. And so we believe that it would have a material detrimental effect on us. And so that’s the reason of the EUR2.4 billion that we are requesting from Orange.

That will be then judged and then we’ll see what will be the outcome. For WIG – for the comparison between SFR and WIG in terms of market share, as you know, the French market is mainly a market which is shared in between Orange, which is the clear leader, and SFR.

I would say rather WIG has a very marginal market share in this market, which would explain why the amounts that you’re – for WIG is much lower than what we are asking for in terms of compensation for SFR. On your third question, I....

Yes, maybe the last question on Parilis and Intelcia. I don’t think we are providing the numbers for the first quarter 2016 because they’re not really significant.

And remember, these are two companies that predominantly do business with existing operating companies of the Altice Group, so there’s not a lot of external revenue and EBITDA with respect to these numbers. And as a result, most of the activity is already captured in the 2016 first quarter accounts..

Okay. Maybe one follow-up on the B2B part.

The fact that you raised the – yes, the amount is – on what is that based? Is that based on the payment WIG Telecom received? Or are these cases really separately?.

Oh, no. So, let’s say, based on our own assessment of the damage that we face, let’s say, due to these behaviors, which have been in place from a range of the past 10 years, so that’s actually based on, let’s say, on an assessment of what we believe was the impact on SFR.

Obviously, then, I was just giving you a point of comparison with WIG, as you were alluding to, but that’s really based on our own assessment..

That will conclude today’s question-and-answer session. I would like to turn the call back over to your hosts for any additional or closing remarks..

Thank you, everybody, for joining, and we look forward to catching up with you in the next few weeks. Thank you..

Thank you. That will conclude today’s conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect..