2008 is likely to go down as a defining year for Liberty Global and its operations in Central and Eastern Europe.
The company’s first quarter results certainly point to an improved performance across the region, with one or two notable exceptions. In the Czech Republic, where UPC Broadband operates both a cable and DTH service, the take-up of the former’s digital offer, launched only last year, has been truly impressive. Already claiming 155,500 subscribers, it can look forward to further growth and could even double this total in the next 12 months.
On the other hand, UPC Direct has been squeezed by the success of the rival DTH platforms Digi TV and more especially CS Link, losing 6,500 subscribers in the first three months of the year.
This contrasts with the situation in neighbouring Hungary, where UPC Direct gained 5,000 new customers in the same period, but questions have to be asked about its likely future performance given the recently entry of the upmarket Hello HD into the Hungarian market.
Liberty Global will probably look at its performance in Romania in the first quarter much more positively than that last year. However, while the alarmingly large loss of analogue cable subscribers has slowed down, it still probably remains much higher than the company is willing to tolerate.
Although UPC has also been losing analogue cable subscribers in Hungary – 9,600 in the first quarter alone – it has since launched its long-awaited digital service. It remains to be seen how quickly, and indeed how many, subscribers will now choose to migrate, with the first to be targeted being those who use analogue converters and who receive premium services.
UPC is also set to launch its digital cable service in Poland sometime this month. Although the company has undoubtedly fallen behind its rivals Vectra, Multimedia Polska and Aster in the provision of additional services, this will probably signal the start of what will be a big fight back.
With the situation in UPC’s other CEE markets Slovakia and Slovenia relatively steady, the digital launches in Hungary and Poland could well be the pivotal events of the company’s year, and one to judge its performance by come December.
