Canal Digital DTH under pressure

Telenor Broadcast CEO Patrik Hofbauer reported a “strong quarter” for his division, which includes Canal Digital’s DTH operation, Conax ‘smart cards’ sector, Telenor Satellite Broadcasting and transmission division Norkring.

Telenor Broadcast has three consecutive quarters of improved results, compared to the same quarters in 2011. Lower costs in the third quarter of 2012 is one of the reasons that the margins have increased, says Hofbauer.

Canal Digital’s DTH business achieved a 17.3 per cent EBITDA margin, up 3 percentage points from the same period last year although lost 4,000 subs during Q3. Canal Digital, which serves Norway, Sweden, Finland and Denmark, and despite losing market share achieved record monthly ARPU levels of NoK 353 (up Nok 20). Overall this past year Canal Digital has seen a loss of some 25,000 subscribers.

“We work very hard at stabilizing the customer base for Canal Digital, better products and an important focus on customer service, are some of our tools. During this past quarter, we also announced our collaboration with NDS, Conax and Kaon, in order to develop our next-generation TV platform. In addition to this, we have a strong focus on costs, which is one of the reasons why our EBITDA increased by 30 per cent from the third quarter last year, says Hofbauer who is also CEO of Canal Digital.”

Conax saw continued EBITDA performance, achieving 41 per cent margin. But revenues for Q3 were down 18 per cent to NoK 121 million (NoK 141m for Q2, and Nok 144m for Q3/2011).  “Conax has slightly lower revenues this quarter, due to the advancements of card orders, but still delivers a most solid EBITDA margin of 41 per cent. Conax is Telenor’s most international company with customers in over 80 countries, and during this quarter the company has consolidated its position in India, says Hofbauer.

Telenor’s Satellite Broadcasting Division is still hurting from lower revenues from its broadcasting clients, notably new contracts negotiated last year from its Canal Digital DTH client as well as currency fluctuations, but y-o-y revenues for Q3 fell to NoK 242 million, down from NoK 259 last year. TSatB was, however, helped by temporary revenues from the London Olympic Games and UEFA’s Euro 2012 soccer championship.

Indeed, CEO Cato Halsaa reported that 2012 was proving to be a record year for satellite occasional use demand. There was also good news on TSatB’s EBITDA numbers, which at 70 per cent were a near-record for the business and three basis points better than Q2.

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