How does Liberty Global assess its progress to date in Central and Eastern Europe? More importantly, what are its plans for the region?
Unfortunately, we learnt very little in the company’s latest set of results, accompanied by a conference call lasting just over an hour in which the focus was very much on the five core West European markets – Netherlands, Germany, Switzerland, UK and Ireland – and in which CEE barely got a mention.
In view of that, it is perhaps a good idea to examine the results themselves and perhaps draw some of our own conclusions.
Firstly, let’s look at the UPC DTH operation, present in four CEE markets. These all gained a modest number of subscribers in the third quarter, with the best performer being UPC Direct in Hungary (+7.900) and worst Czech Republic (+1,200).
Perhaps more importantly, the combined subscriber total of the four operations – the other two being in Slovakia and Romania – reached nearly three quarters of a million (747,100), which was certainly a landmark for the company.
The performance of UPC DTH, especially in such highly competitive satellite TV markets as Romania, has to be commended. However, it is unlikely to ever become a mass market operation in any of the four countries and could even be disposed of by Liberty Global at some future date.
The results also show us that UPC lost 20,700 TV subscribers in Poland in the third quarter, which was surprising, and smaller numbers in both the Czech Republic (200) and Slovakia (2,100). Other quarterly losses included 3,400 telephony customers in the Czech Republic.
On the other hand, there were notable increases in the take-up of its internet service in Hungary (11,200) and telephony in Romania (11,600).
In the CEE region as a whole, the company gained 49,000 RGUs in the third quarter, compared to 9,000 in Q2 and hardly any a year earlier.
Q3 revenues for the CEE operations totaled $279.1 million, or 5.2% more than a year earlier. However, these were a fraction of the $3,635.3 million posted by Liberty’s West European companies, with one market – the UK – accounting for a whopping $1,587.4 million of the total.
With Horizon now firmly established in four West European markets, we all now await its introduction in CEE, most probably first in Poland. This is likely to happen as soon as next year, and in due course it will become a cloud-based service in most if not all the markets it is available in.
