The termination of billing tenants’ cable TV subscription with the ancillary costs is taking its toll on Tele Columbus.
The total number of TV customers fell by 40.4% year-on-year in Q3 2024, dropping to 1.1 million, reports the German cable operator in its quarterly figures.
Within the 1.1 million TV customers, the share of individual user contracts increased by 130,000 in Q3, reaching 863,000. Tele Columbus expects the rise in individual user contracts to continue in the fourth quarter, driven by intensified sales activities.
In the internet segment, new customer growth saw a significant year-on-year increase of 113.1% in Q3. Over 50% of new internet customers opted for tariffs with speeds of at least 500Mbps, confirming the trend towards higher bandwidths.
Revenue declined slightly in the first nine months of 2024, down 2.3% year-on-year to €325.0 million. Meanwhile, normalised EBITDA remained relatively stable at €141.6 million. However, reported EBITDA fell by 14.2% compared to the first nine months of 2023, totalling €105.4 million.
The company adjusted its full-year 2024 forecast at the end of the quarter to account for a lower initial conversion rate when switching TV customers to individual billing and stricter capital allocation in sales channels. Additionally, the division of the group into a network company and a service company is largely complete, which has resulted in higher one-off expenses.
Consequently, the management board anticipates a decline in both revenue and reported EBITDA compared to the previous year, along with a better liquidity position than originally planned, primarily due to optimisation of working capital and capital allocation/investments.
A new law came in force in Germany on 1 July 2024, terminating housing companies’ possibility to charge the cost of the cable subscription with the ancillary costs, whether the tenant actually uses cable TV or not. With the new legislation, tenants can choose a TV provider of their choice, but have to sign individual contracts, if a subscription is required.
The new law has also led to strong TV customer losses at Vodafone, Germany’s largest cable operator.
