337,000 digital TV subs for KPN

Satdude

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337,000 digital TV subs for KPN

Dutch KPN reports the number of TV subscriptions increased in the second quarter with 41,000 net additions, an increase of 47% compared to Q2 2006, to 337,000. KPN has realized this growth mainly through their DTT service Digitenne by increased and improved marketing and by growing its network coverage throughout the Netherlands. KPN’s market share of the digital TV market at the end of Q2 was 14%, equivalent to 5% of the total TV market.

TV is a strategic pillar in KPN’s multiplay offer, with low-cost DTT as challenger to cable while IPTV, a proposition called ‘Interactive TV’ (formerly Mine) is positioned as a premium product with value added services such as video on demand and a larger number of optional channels. As of August 1, KPN will implement a new TV (pricing) strategy based on triple play. The DTT proposition will start at EUR 6.95 for the basic package, an average 50% discount compared to cable and the IPTV proposition will start at EUR 9.95 for the basic package, available only in combination with DSL/VoIP.

After approval by the NMa, the Dutch competition authority, KPN and Télédiffusion de France (TDF) closed the sale of 24 towers on May 16, resulting in EUR 75m of sales proceeds and a EUR 51m real estate book gain.

In the Netherlands, building corporations are increasingly investing in so called Fiber-to-the-Home (FttH) projects to increase the perceived value of their real estate. These building corporations account for some 25% of Dutch residencies. KPN is selectively participating in FttH initiatives where the business case is profitable. Typically, in partnership with these building corporations, KPN invests in fiber to the street cabinets and the partners invest in the fiber connection to the home. So far KPN has installed FttH in new build houses since 2006 and started a joint project in Enschede.

In broadband, the KPN retail market share increased by 4% points to nearly 45% following the acquisition of Tiscali. Excluding Tiscali, KPN’s market share would have been relatively stable at 41%, partly as a result of the lower VoIP uptake in Q2 2007. By effectively using the multi-brand strategy and intensifying the sale activities for ADSL only offerings, KPN saw a recovery in June which it expects to continue.

The acquisition of Tiscali in the Netherlands was closed June 19 and adds 249k customers, of which some 200k are retail subscribers. Corrected for intercompanies, the anticipated contribution from Tiscali for 2007 is about EUR 35m in revenues and EUR 7m in EBITDA including integration costs.

Regards Satdude.
 
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