European IPTV based telcos are just starting their reporting season, alongside cable companies like Liberty Global, and all the major trends are continuing ‘ cable is losing customers, gaining ARPU, while IPTV continues to grow even after 5 straight years of growth, though the percentages are smaller these days.
Telefonica this week reported that its Imagenio IPTV network in Spain and around the rest of the world, including the Czech Republic, Brazil, Chile and Columbia was now up to 2.7 million which is only a rise of 8% year-on-year. But it had 45,000 net adds in its native Spain, which compares to a net loss in the first half of 2009, so that total TV customers are now 748,000, which it calculates is up 22.7%.
Pay TV in Telefonica in Latin America climbed far more slowly at 3.3% year-on-year to 1.7 million with Telesp in Brazil rising by 173,000 to finish at 469,000 and TV customers in Columbia reaching 171,000 at Telefonica Telecom.
Back in Europe at France Telecom Digital TV services which includes both a minor amount of satellite TV and mostly ADSL TV, grew far faster at about 30% over the year across all Europe, to 3.6 million up from 2.7 million a year ago, and in France they rose from 2.4 million to 3.1 million over the year and a rise during the last quarter alone of 161,000 and over the four quarters more like 730,000. The company said that it experienced 5.3 million paid instances of VoD, a rise of 48% year on year.
Still in France we see that Iliad, the company that runs the Free network saw a similar rise to TV viewing even though it tends to bundle it into its broadband lines. ADSL subscribers were up to 4.5 million up from 4.37 million from a half year ago, a rise of 143,000 over the six months, with Free rising in customers and Alice, the French broadband business it acquired from Telecom Italia, falling by some 67,000 lines to 611,000.
Over the first half Free customers bought nearly 4.9 million VoD subscriptions a rise of 24% over this half in 2009.
There is something disingenuous about the way in which cable companies instead of counting video customers, talk about RGUs. To us it seems to ignore the fact they are losing customers who will probably never come back. Instead they talk about the number of services they sell to those who remain with the company.
Thus Liberty Global CEO Mike Fries talked about steady growth adding 544,000 advanced service RGUs up 15% compared to Q2 2009. Most of this was broadband additions, some 59% of the total.
But the company lost another 108,000 video customers during the quarter, while adding 152,000 broadband internet and 126,000 telephony customers. Last time it also lost around 100,000.
It seems to us that there has to be a point when picking the low hanging fruit of additional services to existing customers, no longer outweighs the loss of basic video customers, who, after all, cost a fortune to find and are the bread and butter of the other two services in the triple play.