Record Horizon sales offers bright spot in disappointing quarter for Liberty Global

Mike Fries

Liberty Global recorded a record number of additions to its Horizon advanced TV platform in the first quarter, boosted by strong uptake in Germany, while Liberty Global-owned Virgin Media posted solid growth for its TiVo service in the UK. However, Liberty’s overall RGU growth underperformed, thanks in large part to video subscriber churn.

Liberty Global added 171,000 Horizon subscribers in the first quarter, with the figure boosted by 80,000 net additions in Germany. Horizon was made available to Ziggo subscribers in the Netherlands and UPC subs in the Czech Republic in April, after the end of the reported period.

In the UK, Virgin Media added over 100,000 subscribers to its TiVo service in the quarter.

Strong growth in advanced TV failed to offset video losses elsewhere, however. Liberty Global lost 169,000 video subs in the quarter, 98,000 more than it lost in the same period last year. The company attributed this to underperformance in Ziggo’s footprint and the loss of MDU contracts in Germany, as well as the impact in the prior year of the launch of new digital services in the Geneva region in Switzerland.

Overall, Liberty Global added 68,000 revenue-generating units in the quarter, well down on the 345,000 added in the same period last year. The company’s performance was affected negatively by price rises in broadband in Germany and the loss of MDU contracts, as well as competition in Ireland and losses in the Netherlands as an effect of the harmonisation of Ziggo and UPC services.

The company added 154,000 broadband RGUs, taking its total to 17.424 million. Overall Liberty Global’s RGU total stood at 24.178 million, down 0.6% quarter-on-quarter. The company added 41,000 mboile customers in the quarter, taking its total to 4.6 million.

“Although our Q1 subscriber additions were impacted by higher video losses due to increased competition in certain markets and other factors, consumer appetite for our next-generation services remained strong with 150,000 new broadband subscribers and record Horizon TV additions. Price increases across our footprint contributed to a 5% ARPU increase and provide a foundation for further growth in 2015. We remain in a strong competitive position with our market leading broadband speeds and our advanced video platforms, and expect to add over one million net new RGUs this year,” said CEO Mike Fries.

“We continue to make steady progress with the integration of Ziggo in the Netherlands with a substantial increase to broadband speeds and the introduction of Horizon TV across the former Ziggo footprint. We did, however, experience lower sales and higher churn in the former Ziggo footprint due in part to our network and product harmonization in March. In the UK, we are seeing early success from Project Lightning before network construction kicks off in earnest during the second half of this year. We continue to see excellent traction in our trial areas as penetration is in-line with and ARPU is ahead of expectations.”

Overall, Liberty Global posted revenues of US$4.517 billion for the quarter, down 0.4% year-on-year, while operating income stood at US$557.5 million, down from US$581.7 million.