Cabovisão still weighs on Cogeco

By Julian Clover

July 13, 2009

Portuguese cablenet Cabovisão is continuing to pile on the misery for its Canadian owners Cogeco Cable. The launch of digital terrestrial services and heavy promotion from rival operators in Portugal have lead to a fall of 31,337 Revenue Generating Units (RGUs) between August 31, 2008 and May 31, 2009.

The higher than expected losses resulted in a C$383.6 million impairment loss on the Cabovisão investment in the third quarter 2009.

The company has warned there may be further erosion of its subscriber base during the rest of 2009 with management having put in place a new short-term strategic plan in a bid to stymie losses. Management hopes that the launch of new channels and its own retention strategies will reduce the pace of subscriber falls, but the company is admitting that growth within Cogeco will be slower than in previous years.

Basic subscribers at Cabovisão fell from 296,135 to 264,798, while pay-TV climbed from 57,715 to 66,295.