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Com Hem adds 5,000 TV subs in Q1

Com Hem, the Swedish telco, has reported Q1 revenue totalled SEK 1,276m (1,228), up 3.9 per cent. The number of unique consumer subscribers rose 9,000 to a total of 920,000. There was a continued strong volume growth in broadband, up 11,000 to 669,000 RGUs.

Digital-TV RGU’s totalled 635,000, affected by price adjustments in the quarter, with a continued growth in the number of TiVo customers which increased to 228,000 (penetration rate of 36 per cent).

Anders Nilsson, CEO at Com Hem, commented: “The increased customer satisfaction we saw during 2015, after product improvements, such as the introduction of Com Hem Play and extensive investments in the quality of our broadband services, paired with improvements in our service levels, have made it possible to implement price adjustments. Despite our price rise activity carried out in the first quarter 2016, our customer base grew by 9,000 customers in the quarter with strong broadband growth of 11,000. The price rise activity led to DTV subscribers remaining flat in the quarter, while our TiVo base grew by 5,000 customers reaching 36 per cent of our total DTV base.

Price rises had a limited impact on Q1 consumer ARPU, with the bulk of pricing implemented on March 1st and a minor part on April 1st, driving an increase of ARPU of SEK 1 to SEK 364 (Q4 2015 SEK 363). The full effect of the price rise will be seen in the second quarter revenue. In total, over half of our customers were affected by this year’s price rise programme which on average was somewhat larger than 2015. We continued to focus on the elimination of discounts, rather than raising frontbook prices, and left the prices of our most popular broadband and TiVo services unchanged.

Consumer churn was significantly better than our expectations at 13.9 per cent for the quarter, only one percentage point higher than the record low churn of 12.9 per cent we recorded for both Q3 and Q4 2015. Underlying consumer churn trends are positive, and we expect to return to our prior underlying trend rate from Q2 and onwards.

Demand for our high speed broadband continued to be strong in the quarter, with more than 90 per cent of new subscribers choosing speeds of 100 Mbit/s and above. This brought average speeds in the base up to 125 Mbit/s, compared to 100 Mbit/s a year ago.

The Bredbandskollen report published in February showed that Com Hem’s fibreCoax infrastructure delivered the fastest average download speed in 2015 – beating all other infrastructures in Sweden. We also continue to lead other measures of broadband speed including Netflix Speed Index and Google Video Index.

Our focus for the coming quarters will be to use our new brand to shift the perception of Com Hem, and effectively communicate the scale of the transformation that Com Hem has undergone over the past few years. Our rebranding will drive additional marketing costs of approximately SEK20 million in the second quarter of 2016. We continue to invest in our broadband network and CPE to ensure our continued category leadership, and to increase customer satisfaction. Driving awareness and usage of Com Hem Play among all our eligible TV customers will be a central component of our 2016 marketing activity.

We are continuing our trials in the SDU market. We aim at making a decision during the second half of the year whether we will add this investment opportunity as another growth pillar of Com Hem, in addition to the ones we have been executing on over the past few years.”

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