Liberty Global’s performance in CEE in the first six months of the year was something of a mixed bag and the company needs to act quickly if it is not to fall behind its competitors.
Although UPC Broadband has yet to introduce digital cable services in Poland and Hungary and only made significant progress in one other market – the Czech Republic, where it had 44,000 subscribers at the end of June – there has been a worrying loss of analogue cable subscribers in recent months. In Romania alone, 51,500 stopped receiving its offer in the second quarter, forcing the company into “an acceleration of our upgrade plans and offering loyalty discounts for customers that sign contracts.”
There are also worrying signs in the DTH sector, where UPC Direct, which was launched in 2000, had up until last year being making slow but steady progress in Hungary, the Czech Republic and Slo*vakia.. However, the introduction of the Romanian-backed platform DigiTV into all three markets has impacted strongly on the Liberty Global operation, which lost 4,800 subscribers in Hungary and 5,900 in the Czech Republic in the second quarter alone.
Liberty Global believes UPC Direct is a better quality service than DigiTV and that this slide in subscriber numbers will eventually be halted. There are also doubts in the wider industry as to whether the DigiTV business model is sustainable, and talk about a possible sale of the platform has been around for some time. In the short term it nevertheless looks likely that DigiTV will continue to outperform UPC Direct, certainly in terms of subscriber growth.
There are much more positive signs for UPC Broadband in other sectors, with the take-up of broadband Internet access and telephony growing in all of its markets in CEE in the second quarter. This, surely, is something that Liberty Global has to build on, as well as, of course get cracking with the roll out of digital cable and such additional services as VOD and HDTV.