Liberty Global Suffers Pay TV Losses in Q1

Liberty GlobalMultinational telco Liberty Global reported mixed Q1 results in which rebased revenue for its continued operations was down 0.6 percent year-on-year to $2.87 billion, as the company prepares to offload substantial parts of its business. The discontinued section of its business (the operations in Germany, Hungary, Romania and the Czech Republic which Liberty has agreed to sell to Vodafone), had an even tougher quarter, with rebased revenues down 2.6 percent.

Video subscriptions across Liberty’s businesses fell by 60,500, an acceleration of losses from last year when video subscriber count fell by 45,200. These losses were heaviest in the UK, Belgium and Switzerland. While Liberty’s UK subsidiary Virgin Media was one of its better performing units, with rebased revenues down just 0.1 percent year-on-year, total subscriptions to video services in the UK hit 3,846,700, a fall of 25,000 since December 31st. In Belgium, video subscriptions were down by 23,100 in the same period, while in Switzerland, video subscriptions fell by 22,800. Proportionally, the drop in Switzerland was especially steep, with two percent of its video subscribers dropping off within the first three months of the year. Perhaps tellingly, CEO Mike Fries hardly touched on the losses to video subscriptions when discussing the results, focusing instead on his company’s strengths in other areas.

However increased voice and data subscriptions (subscriptions to Liberty Global’s various telephony and internet services) were a bright spot in the financial report. The company reported overall (voice, video and data) subscriber growth of 24,700. This marks a significant turnaround for the company from last year where subscriber count fell by 10,300 overall.

Liberty Global is of course not alone in battling falling subscriber counts for its pay TV services. Vodafone Ziggo, a joint venture of Liberty Global and Vodafone, similarly reported accelerating losses for its video subscription count. Total video subscriptions fell by 53,100 to 3.88 million, contributing to a total revenue decline for the company of one percent. And US telco AT&T in its Q1 results posted a net loss of 544,000 subscribers to its premium TV packages.

There was better news for the company elsewhere though as it seeks to sell off its German, Hungarian, Romanian and Czech operations to Vodafone. Vodafone today offered to give rival telco Telefonica wholesale access to its entire German cable network in an effort to alleviate the EU’s competition concerns, a move which Vodafone says would enable Telefonica Deutschland to offer internet and TV services to 23 million German customers. A decision on the deal is expected by July 9th, with Mike Fries claiming that Vodafone and Liberty have “cross a number of key milestones”, and that the European Commission is in the final stages of its review.


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