Ziggo to focus on customer retention after tough quarter

Ziggo CEO Bernard Dijkhuizen

Dutch cable operator Ziggo plans to launch new customer retention programmes in the second quarter after suffering continued high churn in a competitive market in the first three months of the year.

The operator lost 22.3% of its analogue base over the year to March, leaving it with 591,000 analogue customers, while digital pay TV subscribers fell by 5% over the year to 909,000, with a particularly sharp drop of 20% in the first three months of this year. The overall TV customer base fell by 4.3% to 2.851 million over the year to March. Thanks to growth in bundling, total RGUs remained stable over the year at 7.097 million, but slipped by 5% in the three months to March.

The first quarter saw the Dutch operator attract 31,000 additional subscribers to its All-in-1 bundle, taking penetration to 52.2% of its overall customer base. Internet subscribers grew by 24,000, up 1.3% on the previous quarter.

While Ziggo was able to boast higher digital pay TV revenue, including video-on-demand, up 5% year-on-year, overall quarterly revenue was flat year-on-year at €387.8 million, boosted slightly by strong growth in the business services segment.

Ziggo will increasingly focus on developing mobility going forwards, following the launch of its cloud-based video user interface and the planned rollout of Ziggo WiFi hotspots.

“The first quarter of 2013 showed solid results with strong EBITDA margins in a continuing competitive environment. We have successfully stepped up our marketing activities in the consumer market with the launch of new sales campaigns in February. However churn remains high, so we will initiate new loyalty campaigns in the second quarter with a strong focus on customer retention. These should give support to our overall objective to reduce churn and create revenue momentum in the course of 2013. Meanwhile, we will focus on enhancing customer experience through new innovations and product enhancements. The recent launch of our cloud based user interface for set top boxes has resulted in a strong increase in the number of interactive receivers since its launch. With the rollout of Ziggo WiFi Hotspots this year we will prepare and position ourselves for converged services by adding mobility for our customers,” said CEO Bernard Dijkhuizen.

Ziggo reiterated its EBITDA guidance but anticipated that 2013 revenue growth would be at the low end of the EBITDA growth range of between 2.5-3.5%.