Euskaltel sees revenues fall but reports record penetration

Spanish regional cable operator Euskaltel saw its first quarter revenues and EBITDA fall year-on-year, but reported strong free cash-flow and solid operational progress.

Euskaltel posted sales of €139.5 million for the quarter, down 1.6%, and EBITDA of €68 million, down 1.5%. The decline was attributed by the company to the loss of a contract to supply services to the Basque regional government.

Operating cash-flow rose by 5.2% relative to the previous quarter to €44.8 million.

Euskaltel, which operates the cable network in the Basque Country, and Galician subsidiary R saw their revenue-generating user base rise by 3.7% to reach 1.9 million.

The group gained 53,000 mobile lines over the year to March, up 7.4% to 774,000, representing what Euskaltel characterised as a record penetration rate of 78.6% of its residential customer base, up from 74% a year ago.

Euskaltel added 4,100 pay TV customers, taking its total to 275,000 – a penetration rate of 58.5%.

Broadband penetration meanwhile reached 84.5% after Euskaltel signed up an additional 5,000 customers to take its total to 396,000.

CEO Francisco Arteche said that the record penetration of mobile, pay TV and broadband services was the result of its successful convergence strategy and highlighted the company’s forthcoming launch of a new Android set-top box and the modernisation of its broadband network.

Ardeche said that the company’s objective was to position itself to realize “a major increase in value” and confirmed the company’s guidance for the current year.

Euskaltel’s continued growth is however likely to be dependent on the success of its planned acquisition of Asturias region operator Telecable, which would give the company a significant boost in scale and help position it for growth outside its regional base in northern Spain.