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MTG’s pay-TV business continues to grow

Modern Times Group added 24,000 premium subscribers in Scandinavia during the third quarter as the company’s pay-TV business continued to hold up well against the global recession. Hans-Holger Albrecht said well over half of all group revenues come from the “non-cyclical, resilient and well positioned” pay-TV business.

Of the premium subscriber additions, 9,000 signed up to DTH services, giving MTG a total of 675,000 at the end of September, while IPTV net additions reached 15,000, giving a total of 128,000. The growth in DTH customers was driven by analogue switch-off nearing completion in Norway and Denmark as well Viasat’s enhanced sports offering, according to Albrecht. He said 100,000 Danish households were still to switch to digital services despite the analogue signal being turned off on November 1, and that most households taking pay-TV services in the country were choosing Viasat.

MTG saw an 11% increase in premium DTH ARPU to SEK4,401 (€428) during the quarter, driven by price increases and greater penetration of value-add services including multiroom, (now taken by 27% of premium customers), DVR (taken by 20% of customers) and HDTV (taken by 12% of customers). “In-home entertainment is a sticky consumer item and DVR, HD and multiroom increase its resilience,” Albrecht said. He added that DTH premium ARPU is expected to grow further due to ongoing take-up of value-add services and price increases. All pay-TV packages in Sweden that include sports channels will increase by SEK30 each month due to the addition of coverage from the Ice Hockey League on November 3, for example.

Net sales for the Scandinavian pay-TV business reached SEK1.1bn, up 10% year-on-year. Moving forward, Albrecht said, “subscriber acquisitions would be driven by rising IPTV penetration and potential DTH gains in Denmark around the analogue switch off.”

Viasat’s emerging markets pay-TV operations, comprising the DTH satellite platforms in the Baltics and Ukraine, as well as the 11 Viasat channels that are distributed through third party pay-TV networks to subscribers in 25 countries across central and eastern Europe and the United States, saw sales up 26% year-on-year to SEK211m.

Viasat’s Baltic and Ukrainian DTH satellite pay-TV platforms added 14,000 net premium subscribers year on year, and 3,000 quarter-on-quarter, following continued subscriber intake in Ukraine and a smaller net loss of subscribers in the Baltics than in the second quarter. The wholesale mini-pay business added 6.5 million subscriptions year-on-year, but lost 562,000 during the third quarter, which reflected the loss of contracts with two major cable network operators, Albrecht said.

MTG reported overall net sales of SEK3,177m for the quarter, up 7% year on year, and operating income of SEK377m.