Horizon dawn lightens up video business as Liberty Global posts 'strongest quarter'

Joseph O'Halloran | 05-11-2012

Despite continued falling numbers in its video lines, Liberty Global (LG) has posted bullish quarterly figures for its third quarter of 2012, with the new Horizon TV platform providing a fillip to business.

Specifically, for the three and nine months ended 30 September 2012, LG’s consolidated revenue increased 4% to $2.5 billion and 7% to $7.6 billion respectively, as compared with the corresponding periods in 2011. Significantly driving both revenue counts were the periods’ acquisitions, principally that of Kabel BW.

For the three and nine months ended 30 September 2012, LG generated revenue generating unit (RGU) additions of 320,000 and 1.1 million. Even though this showed a 39% year-on-year increase for the nine-month period, it also represented a 2% year-over-year decline for the three-month period.

Moreover, for the three-month period it alsolost 90,000 video RGUs, largely consistent with the losses experienced during each of the first and second quarters of 2012 and compared with video losses of 59,000 for Q3 2011. LG partly attributed the falls to German video losses of 26,000 in Q3 2012 as compared with video losses of 7,000 in Q3 2011.

LG also conceded that such losses stemmed from a combination of a video price increase for certain single dwelling units and the loss of a housing association contract during the quarter. Additionally, it claimed to be impacted by heightened competitive environments in Poland and Chile, as Polish and Chilean net video losses increased by 18,000 and 11,000, respectively, on a year-on-year basis. Undeterred, in a bid to drive revenues LG said that it will continue to balance its bundles with selective price increases in markets like Germany and the Netherlands.

On a brighter note, LG said that it had already sold more than 50,000 subscriptions for the Horizon TV connected home digital cable TV play, what it called “a watershed event”, with over 125,000 unique online users. LG will launch Horizon TV in Switzerland later this quarter, followed by Ireland and Germany early in 2013.

The company also revealed that overall its third quarter rebased growth reflected its best top-line performance since Q3 2010. Western European operations of Germany, Belgium, the Netherlands and Switzerland generated rebased revenue growth of 11%, 6%, 5% and 5% respectively. The German, Dutch and Swiss businesses each realised their best quarterly rebased revenue growth of the year, with the German operation achieving its best result since LG acquired Unitymedia in 2010.

Commenting on the results, LG president and CEO Mike Fries said: “We delivered our strongest quarter of the year in terms of rebased revenue and OCF performance. In fact, our top-line rebased growth of 6% reflects our best quarterly performance in two years, fuelled by a record number of broadband Internet and telephony subscriber additions over the last 12 months. A key development for us in Q3 was the long-awaited launch of Horizon TV … which will help us differentiate our product offerings not only in the Netherlands in coming quarters, but also in markets like Switzerland, Ireland and our largest market, Germany … we should be able to maintain this momentum in the fourth quarter. As a result, we are confirming all of our 2012 targets today.”