Liberty Global beats expectations, strong advanced TV growth

Liberty Global CEO, Mike Fries.

Liberty Global beat analysts’ expectations for its first fiscal quarter, posting solid revenue and subscriber growth, with strong operating performances in the UK and Germany.

The cable company added 156,000 revenue-generating units in the quarter, double the number added for the same period last year, with improvements across broadband, video and telephony, and posted revenues of US$4.6 billion, up 3%, led by Chile, with growth of 8%, and Germany and Belgium, each with growth of 5%.

Liberty Global’s Horizon advanced TV proposition now has over two million customers, with 190,000 added in the quarter, including 100,000 from Dutch operator Ziggo. In the UK, Virgin Media’s TiVo platform added 80,000 customers, taking the TiVo base to nearly three million, or 80% of the UK base.

In Europe as a whole, Liberty added 135,000 RGUs, with higher levels of broadband and voice additions combining with reduced video losses to deliver solid growth. The company also added 99,000 post-paid mobile customers in the quarter, boosted by its addition of BASE in Belgium.

Western Europe contributed 71,000 organic RGU additions, while central and eastern Europe contributed 64,000 additions, thanks in part to the expansion of the company’s networks.

Virgin Media in the UK added 110,000 RGUs, its strongest Q1 performance in six years, with four times as many net additions as for the same period last year. The growth was attributed to its successful marketing of high-speed broadband as well as homes added through its Project Lightning network investment.

In Germany, Unitymedia added 24,000 RGUs, in line with its 2015 performance despite significant price increases.

Switzerland and the Netherlands saw continued RGU losses, attributed to strong competition. Dutch unit Ziggo slowed down its rate of RGU losses to 40,000, down from 47,000 for the same period last year.

Overall, Liberty Global continues to lose video subscribers, with 142,000 losses in the first quarter. However, this was an improvement year-on-year from the 164,000 video subs lost in the first quarter of 2015, thanks to a better performance in central and eastern Europe and reduced churn in the Netherlands, the UK and Ireland.

Liberty’s partially spun-off Latin American and Caribbean operation, LiLAC, also performed well, with 21,000 broadband additions and 16,000 organic customer additions.

During the quarter, Liberty Global shareholders approved the acquisition of Cable & Wireless, boosting its presence in the Caribbean.

“We exceeded our own expectations for the first quarter with more than 150,000 new RGUs, a sharp increase from last year, as we demonstrated improved momentum across all products. At the same time, we successfully landed price increases across markets, laying the foundation for faster growth during the remainder of the year. The standout performer this quarter was Virgin Media in the UK, where record low churn12 and new build investments contributed to our best Q1 result since 2010,” said Mike Fries, president and CEO.

“Our innovation pipeline remains full, with a clear focus on further enhancing the customer experience. We are constantly improving our video products with great new functionality such as Horizon Go and Replay TV, along with additional HD content, while the new Connect Box provides our broadband customers with superior in-home connectivity, supporting speeds of up to 1 Gbps. These improving consumer value propositions, together with ongoing new build activities across our footprint, are expected to drive higher quarterly RGU additions during the balance of 2016.”