Belgacom TV reports strong gains

06.21 Europe/London, October 28, 2011 By Robert Briel

Despite losing the rights to first-division football championship games, Belgacom TV reported that it customer base rose sharply by 52,000 to a total of 1,139,000 at the end September 2011.

Belgacom’s convergence strategy reports a growth in sales of 47,000 in the third quarter, the milestone of 1 million packs has been passed (1,024,000 end September).
As for fixed internet, there are a total of 1,572,000 customers (1,000 fewer than at the end of June). The number of fixed lines totals 3,238,000 (compared to 3,282,000 in June).
Revenue from Belgacom TV was impacted due to the loss of the exclusive broadcasting rights for football. In the football bidding process of June 2011, Belgacom made an offer to the Belgian football league based on an analysis of expected return, but was outbid by cable competitors who offered about €49 million per year for the exclusive rights to the top three weekend matches. Belgacom was granted the remaining five weekend matches, for which it paid €1 million per year.
With more than 180 football matches per year offered for free to all TV customers, Belgacom is confident its football offer remains attractive. As a consequence, churn of the former 70,000 Belgacom TV football subscribers remained limited to 8,100 since the announcement in June, but some customers churned with voice and internet services as well.
The additional churn, and especially the free football offer for former football subscribers and all other Belgacom TV-customers, has so far reduced the revenue by €6.6 million, with fairly equal impact on the Group EBITDA
In a statement, CEO Didier Bellen said: We could also once again welcome many new households on our TV platform, more than offsetting the football-related TV churn as the greater part of our former football subscribers remained loyal to Belgacom. However, as some of the churned TV-customers were multi-play customers, the fixed internet and fixed voice operational result was negatively impacted in the third quarter.
“This offset the positive results we saw from our segmented marketing approach, e.g. “TV with fixed line” oriented towards our senior customers. Our convergence strategy continues to prove to be the right one, with the number of customers subscribing to one of our convergent packs now crossing the 1 million mark.”
For the third quarter 2011, Belgacom Group reports a revenue of €1,596 million, i.e. 2.7% lower than for the same period of 2010. Regulation impact softens in the third quarter, reducing the revenue by €18 million. Excluding regulation, the Belgacom Group’s underlying revenue was down year-over-year by 1.6%.
The Belgacom Group EBITDA for the third quarter 2011 decreased year-over-year by 3.6% compared to the same period of 2010, including €8 million (-1.6%) of negative impact from regulation. The EBITDA margin for the third quarter decreased year-over-year by 0.3% to 29.6%.