Unitymedia’s “well priced” services deliver growth

German cable operator Unitymedia’s “well priced” triple-play offering means the company will benefit from the current economic crisis, according to CEO Parm Sandhu.

“For consumers that are looking to make savings, switching from a provider that is 30-50% more expensive than Unitymedia is a natural thing to do. We’re benefiting from it to-date and will continue to do so,” he said. “We’ve established a broadband speed leadership in our Unity3play triple-play product and are delivering exceptional value for money in what is a recessionary environment.” His comments came as the operator reported strong quarterly results, with cable revenue up 11% year-on-year to €223m in the first quarter, while cable EBITDA was up 13% to €107m.

Total RGUs at the end of March stood at 6.3 million, up from 5.8 million a year earlier. Of those, 4.6 million took basic cable services, while 1.7 million took ‘new services’. The number of digital pay-TV RGUs was up 23% year-on-year to 595,000 but ARPU from pay-TV services decreased slightly to €9.17. Unitymedia saw the biggest growth from its broadband business, with revenue doubling in 12 months to €20.4m from €8.9m a year earlier. Broadband RGUs reached 438,000 at the end of March, up 79% on the previous year.

Sandhu said the company was benefiting from the digitisation of its network, which now stands at 86% and will reach 90% by the end of the year. This, he said, is allowing Unitymedia to increase the number of subscribers to its Unity3Play triple-play service. “Today, a basic cable customer generates ARPU of about €10. Triple-play ARPU is €40-60. A great way to grow your business four-fold is to upgrade all your basic subscribers to triple-play,” he said. “Of course, that’s not going to happen overnight but in the long-term I think we’ll end up with a fully converged digital market place.”