Euskaltel puts positive spin on Q3 results

Spanish regional cable operator Euskaltel put a positive spin on year-to-date and Q3 results that saw significant increases in revenue and profit over the year-to-date, with the top and bottom line masking the impact of intense competition in the Spanish service provider market.

Euskaltel posted group revenues of €521.1 million for the first nine months, up 17.4% , with EBITDA up 15.3% to €252.9 million

However, on a proforma basis, Euskaltel saw fixed subscribers decline by 1,700 to 573,600, with ARPU falling by 0.9% to €60.10. Total revenue-generating units increased by 39,000 to 2.363 million.

The decline occurred during the third quarter. After adding 3,100 customers in the first half, Euskaltel dropped by a net 2,100 in July and 3,900 in August, before recovering slightly in September.

The operator said that the third quarter had been characterized by an unprecedented level of competition, intensified by the battle for football rights, in which it decided not to participate to avoid a surcharge for customers.

Euskaltel nevertheless claimed that all its products achieved record penetration rates of its own base, with broadband penetration of its base standing at 85.9%, up 15 points, mobile penetration standing at 80.2% and pay TV penetration standing at 70.9%, up 36 points.

Q3 revenues were up 4.3% to €164.7 million. However, those figures masked slight like-for-like declines if the comparative figures for Asturias region operator Telecable, acquired in 2017, are taken from the start of the year.

Euskaltel said it was making “satisfactory” progress with plans to expand into neighbouring regions to its core markets of the Basque Country, Asturias and Galicia, starting with Navarre, where it is providing services over Orange’s network. Here, Eutelsat said it had signed up 2,000 customers so far, with a target of surpassing 4,000 by the end of the year. Euskaltel has said it hopes to gain an additional 90,000 customers in contiguous markets by 2022. The company also hopes to pass an additional 100,000 subscribers with its network in its core markets.

Former Telecable owner Zegona Communications is currently bidding to double its stake in Euskaltel by making a tender offer for up to 14.9% of the company. Zegona has been critical of Euskaltel’s performance since acquiring a stake in the company following the merger with Telecable. The UK-based investment outfit has been in talks to hire former Jazztel CEO José Miguel García and to bring the Virgin brand to help Euskaltel target opportunities in neighbouring market.