Ziggo targets mobile and WiFi amid weak TV performance

Dutch cable operator Ziggo said it expects improved revenue momentum to come from further investments in WiFi hotspots and mobile, after reporting “limited growth” in digital pay TV.

Announcing its second quarter results, Ziggo said that the already-started rollout of Ziggo WifiSpots “will result in over 850,000 hotspots by the end of the third quarter and close to 1 million before the end of the year.”

It added that it would launch its mobile offering to existing customers in the second half of this year, offering a bundle of call minutes, SMS and mobile data combined with internet access through the Wifi hotspots. It is also investing in customer retention.

The news came as Ziggo reported this its total TV customers – analogue and digital – dipped 4.8% year-on-year to 2.818 million. However it said that digital TV subscribers increased by a slight 3,000 to 2.24 million.

“The number of TV-only subscribers decreased by 21.4% compared with the same quarter last year, to a total of 848,000 as at June 30, 2013. The decrease was mainly caused by the up-selling of the All-in-1 bundle to our TV-only subscribers as well as by churn among TV-only subscribers,” said Ziggo.

“Churn among TV-only subscribers was higher compared to last year as a result of the market moving towards triple-play and increased competition. Churn on all other product lines, and for All-in-1 in particular, is significantly lower compared to churn among TV-only subscribers.”

CEO Bernard Dijkhuizen added: “Our focus on sales of All-in-1 bundles and retention had an adverse effect on marketing initiatives for premium TV, contributing to a limited growth in digital pay TV this quarter.

Overall for the quarter, Ziggo’s revenues were up 1.4% year-on-year to €391.9 million. Net profit was up to €88.9 million, from €64.4 million in Q2 2012. The firm said it now anticipates 2013 organic revenue growth, excluding ‘revenues from other sources’, to be around  1%, whilst adjusted EBITDA is expected to be in line with last year.