Swedish cable operator Com Hem has managed both to achieve record cable ARPU and reduce churn in a second quarter that saw year-on-year revenue jump by 38% on the back of last year’s acquisition of digital-terrestrial TV unit Boxer.
Com Hem grew its cable ARPU by SEK8 (€0.32), or 2.3% to a record SEK376 on the back of price adjustments introduced in the previous quarter. The company said that consumer churn had declined from 13.6% in the first quarter to 12.4% in the three months to June, described as a record low.
Com Hem grew its cable base by 8,000 in the quarter. Its revenue-generating unit base also grew by 8,000, boosted by an 11,000 increase in broadband customers and a modest 1,000 increase in TV homes, more than offsetting a decline of 5,000 in its telephony base.
Com Hem said its TiVO-based advanced TV service now accounted for 40% of digital TV homes, adding 4,000 customers in the quarter.
The cable operator said its base of addressable homes now numbered 2.6 million, having grown 200,000 in the three months to June. Com Hem has added 600,000 addressable homes since the beginning of its network expansion programme a year ago, with about 200,000 of those being covered by Boxer.
The company has upgraded its footprint target from 2.8 million to three million by 2020. Com Hem is expanding its footprint by targeting the single dwelling-unit market and through the acquisition of Boxer, as well as by building out fibre iin selected areas. However, the company said that intense competition in building out fibre meant that it needs more time to evaluate whether it should scale up the latter programme. It said a decision would be taken later this year.
Com Hem posted revenues of SEK1.794 billion (€186.6 million) for the quarter, up 38.1%. Excluding Boxer, revenue grew by 5% to SEK1.364 billion. Operating profit was up 16% to SEK222 million. However cash flow from operating activities was down 13.6% due to the timing of interest payments and negative change in working capital. Operating free cash flow increased by 2.3% to SEK419 million, with Boxer’s contribution offsetting a decline at Com Hem.
“The Com Hem Group showed strong operational momentum with good performance across all KPIs. This translated into solid financial performance as revenue and underlying EBITDA for the Group grew in-line with guidance,” said CEO Anders Nilsson.
“In the Com Hem Segment, record consumer ARPU and churn in the quarter following our annual price adjustments give us confidence in our strategy to focus on customer satisfaction. For Boxer we see initial signs that the repositioning from a TV-centric to a broadband-led operator is getting traction, resulting in a slowdown of the RGU decline, as broadband sales grow while DTT churn is significantly reduced.
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