Having improved its broadband capability with the deployment of DOCSIS 3 technology, Spanish cableco Ono believes it can do the same with improvements to its TV and telephony services.
Reporting its third quarter financials, the Spanish cableco declared 3,988,000 cable RGUs (Revenue Generating Units), up from the 3,929,000 of 12 months previous, though down on the previous quarter of 4,004,000. Churn of 15.1% also crept up by 1.7 percentage points in the quarter, though still an improvement on the 17.3% of September 2009.
Some 82.6% of the customer base took two or three parts of the triple play package in Q3, leading to ARPU that sat at €50.8.
There were 948,000 TV customers, representing a 13.5% penetration of homes and 52.4% penetration of customers. The bundle mix has improved with a higher penetration of premium bundles. However, the reorganisation of Spanish football rights has lead to less income from PPV, though the Gol TV football channel had 113,000 subscribers as of the end of September.
Revenues of €362 million, though 2.5% down on 2009, produced an EBITDA of €186 million and the company’s highest margin to date.
Close to 40,000 customers signed up to its 30 Mbps and 50 Mbps DOCSIS 3.0-delivered packages in the month after launch. To date 65% of the network has been upgraded and the operator is well underway towards completing the project by the end of Q1 2011.
“We have recently launched a pilot programme with speeds of 100 Mbps and we intend to commercialise these higher speed over the next few months depending on market demand,” said CEO Rosalía Portela.
Ono has continued to lose TV customers, 29,000 leaving in the past year, and Portela admitted that the service was proving to be the most vulnerable in the economic situation. However, she said that by focusing on mid and higher tier customers, the decision had in part been made by the operator rather than the customer.
“We realised two years ago that our lower quality TV product was very sensitive to price and a lot of customers decided that the quality for price was not good enough, so we started moving customers to the higher packages., because they were offering much better quality for the price,” said Portela. “We have proactively moved customers upwards on our TV packages, we have lost a lot of customers on the lower tiers, and a lot of the customers have left the pay-TV market because of price reasons. Portela added the situation had begun to change with the arrival of pay DTT services earlier this year.
Ono’s TV offer will be further improved with the arrival of the TiVo product in June next year, which Portela believes will offer customers a superior experience. She anticipated a stabilising in TV numbers before the end of the year leading to growth in 2011.
As with other Spanish pay-TV operators, Ono is faced with the RTVE advertising tax, 0.9% of revenues being required to help prop up the public broadcaster’s loss of spot advertising, with the European Commission waiting on Spain’s response to what it sees as an unlawful tax. In the meantime Ono withheld some €15 million until the first week of October while it challenged the decision itself in the Spanish Supreme Court.
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