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Deutsche Telekom sees modest growth in pay TV while fibre proves a hit

Deutsche Telekom has reported an increase of 67,000 Magenta TV customers to tip it over 3.5 million pay TV subscribers in Germany.

Elsewhere in Europe, TV subscriber numbers increased by 9,000 net adds. This is a far smaller growth than the 35,000 TV net adds for Q3 2018, though it does take into account the merger of T-Mobile and UPC Austria to become a single integrated service provider – Magenta Telekom. 

In the company’s Q3 report, the telco saw growth across the board, including a significant increase in fibre customers of 3.7 million new homes in Germany and the rest of Europe. In total, the company now serves 34.6 million fibre households in Germany and 8.4 million for the rest of Europe.

The company noted that just shy of a quarter (24%) of its broadband customers now use its MagentaEINS converged product, compared to 21% a year ago. Mobile contract customers with MagentaEINS increased from 47% to 55%.

Data usage has also increased by 58% for the quarter, reaching an average of 3,876 MB per customer each month. 

While net growth has continued across the board, the company still recorded line losses of 231,000 – the most for any quarter in the past year. Though a significant amount are line losses triggered by IP migration.

Overall, revenue for the company is up by 4.8% in Q3 to €20 billion.

The company will likely anticipate an increased demand for Magenta TV going forward, having recently acquired exclusive rights to the 2024 Uefa European Championship. Deutsche Telekom CEO Dirk Wössner has also recently confirmed that the company is exploring a bid to the rights for the German Bundesliga.

Speaking to local paper FAZ, he said: “MagentaTV is synonymous for sports, where football plays an important part, which is why the Bundesliga rights are generally interesting for us and our viewers. We will see how we deal specifically with rights in the coming year. There are various possibilities, for example through cooperation.”

The telco also said that it will cut its dividend for 2019, with uncertainty surrounding T-Mobile’s proposed US$26.5 billion takeover of Sprint in the US. 

The acquisition has been proposed – and blocked on the grounds of being negative for customers  – for years. However, it was formally approved by the FCC days before the earnings call. The FCC said that the merger will “enhance competition” in the US and improve the adoption of 5G.

One caveat to the merger is that the Deutsche Telekom-owned T-Mobile must sell its stake in US TV provider Dish Network.

Despite this approval, more than a dozen attorneys general have filed a lawsuit seeking to halt the deal. The case will be presented before a New York on December 9. 

With the deal still facing opposition, Deutsche Telekom has said that it plans to pay a €0.60 dividend for 2019, down from €0.70 in 2018.