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Com Hem Q1 revenue up 38%

Swedish multi-play operator Com Hem’s Q1 revenue saw a strong increase of 37.7 per cent to SEK 1,757 million (€183.2m) while organic revenue rose by 3.5 per cent to SEK 1,321 million. Digital-TV RGUs totalled 644,000, with a continued growth of 6,000 TiVo customers (penetration rate of 39 per cent).

Boxer, the pay-TV operator that Com Hem acquired in September 2016, reported 3,000 broadband RGUs were added in the quarter. Unique subscribers fell by 16,000 to 479,000 while RGUs fell by 13,000 to 498,000. Boxer delivered a revenue of SEK 436 million in the quarter.

Anders Nilsson, CEO, Com Hem Group commented: “The Com Hem Group saw very strong growth in all financial KPIs as we consolidated Boxer. The Com Hem segment grew in-line with our expectations since Q1 is driven only by volume growth, whereas the price adjustments conducted in the quarter will translate into revenue growth in Q2 and onwards. In addition, the B2B integration is already improving Underlying EBITDA and operating free cash flow, and Boxer is realising cost synergies as we progress through the integration.”

“Price adjustments in the Com Hem segment were successfully implemented as customers are willing to pay more for higher quality of service. Despite price adjustments in the quarter our customer base grew by 7,000 in the segment. This was made possible by product improvements in 2016 such as the introduction of Com Hem Play as a core part of all of our DTV packages with added support for Chromecast, introduction of our new router and a speed upgrade for most of our customers with 50 Mbit/s. In addition, we have continued investing into network to maintain high speed and capacity. Com Hem is still the highest ranking amongst our peers according to external tests such as Netflix Speed Index and Google Video Index.”

“Trends across our product lines remain similar to previous periods with very strong growth in broadband, up 11,000 RGUs, modest growth in DTV, up 1,000 RGUs, and steady decline in telephony, down 5,000 RGUs. Our TiVo base grew by 6,000 customers, now at 39 per cent of our DTV base.”

“Price adjustments had a limited impact on Q1 consumer ARPU in the Com Hem segment, down from SEK 371 in Q4 2016 to SEK 368. The sequential decline is largely due to weaker seasonality as well as a larger portion of group agreements. While group agreements have a positive absolute effect on revenue as we sell services to all tenants in a building, there is pressure on per-user revenue as each tenant generally comes in at lower ARPU. The full effect of the price adjustment will be seen in Q2 2017 revenue.”

“Consumer churn of 13.6 per cent for the quarter was significantly better than our expectations, only 0.9 percentage points higher than the record low churn of 12.7 per cent recorded in Q3 2016. We expect churn to return to the underlying declining trend in coming quarters.”

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