Telenet foregrounds fixed-mobile convergence but struggles to attract new subs

Liberty Global-backed Belgian service provider Telenet saw continued benefits from its move to foreground fixed-mobile convergence take up in the second quarter but struggled to attract new subscribers, with only 300 net new broadband subs and 8,100 new post-paid mobile customers.

The group added 16,500 customers to its ONE(up) fixed-mobile convergence bundles.

The company posted revenue of €1,291.6 million for the first half, broadly flat compared to its H1 2021 revenue, which included certain one-off benefits.

Net profit for Telenet during the first half of the year was €793.4 million, up 275% year-on-year. The increase was attributable to the gain on disposal of assets related to the operator’s sale of its mobile towers business as well as an improved financial result during the reporting period.

The sale of the towers business to DigtalBridge for €745 million will provide Telenet with funds to invest in its planned FTTH rollout via a JV with utility group Fluvius.

Telenet and Fluvius aim to develop a network capable of 10Gbps across its footprint over time through a mix of DOCSIS-based hybrid fibre-coax and investment in full fibre FTTH networks

Under the joint venture agreement, which has been long in the works, Telenet will have a 66.8% stake in a new NetCo with Fluvius owning the remaining 33.2%, and Telenet will fully consolidate NetCo in its financial accounts.

The new NetCo intends to operate a fully open access network, providing wholesale access to Telenet and other telco operators in Belgium.

The ultimate goal is to create a full FTTH network covering 78% of Flanders by 2038, the company said.

Analysts at Jefferies downgraded the company’s stock ahead of the results on concerns about the investment requirements of the new JV and the threat posed by new mobile entrant Digi, which aims to replicate a disruptive approach that it has already implemented in launches in Italy and Spain.