UPC “back to positive growth”
November 5, 2020
UPC, the Swiss cable operator, returned to a state of growth in Q3 with increased subscriptions and record broadband sales, but revenues were still down 5.8 per cent.
Baptiest Coopmans, CEO of UPC Switzerland, commented: “The results for the 3rd quarter of 2020 show that our growth plan is working: the various measures have contributed decisively to bringing UPC back to positive growth in the third quarter with the best sales figures in more than three years. Pivotal factors included the powerful and reliable Giganet, the Mobile portfolio that was successfully launched in September, and the digitisation and simplification of operative processes with a view towards optimising the customer experience. The success of these initiatives is reflected in the high level of customer satisfaction which has remained at an all-time high for the last several quarters and continues to rise. The positive customer experience results in a significantly lower churn rate. The growth plan is bearing fruit, despite the ongoing coronavirus pandemic. In addition, through the merger with Sunrise we will soon be able to create an even stronger national challenger.”
In the 3rd quarter of 2020, revenue dropped by 5.8 per cent compared to the same quarter of the previous year, from CHF307.3 million (€286m) to CHF289.6 million, with the company attributing this to the competitive market, the environment marked by the Covid-19 pandemic, and the lack of live sports content on MySports. The operative result (OFCF) nevertheless improved in Q3 2020. Besides a simplified cost structure, another factor is that all UPC customers have the opportunity to benefit from the powerful UPC Giganet and the majority of them already have UPC TV, so the associated investments have already passed their peak.
Achievement of the turnaround was significantly supported by the record sales figures in the areas of fixed-line Internet and Mobile. In September, over 50 per cent more contracts were concluded with UPC than in the same period a year ago, and over 90 per cent more than two years ago. UPC thus achieved subscription growth once again in the 3rd quarter of 2020. The total number of subscriptions increased by 5,000 overall. The new Mobile portfolio which was launched in September is a great success – it appeals to a broad range of customer segments and wins customers over with outstanding value for money. The nationwide gigabit Internet on the UPC Giganet has also become established. The average Internet speed of all customers in the last three months was over 350 Mbit/s, further strengthening UPC’s position as the speed leader in Switzerland. Moreover, the UPC TV Box continues to be extremely popular. More than 350,000 UPC TV Boxes are on the Swiss market by now – about 77 per cent of the UPC customer base already enjoys the innovative TV experience.
To further optimise the customer experience, over the last months a variety of customer processes have been digitised and simplified. This has an impact on the availability of the Call Center, which is consistently over 90 per cent, and also on customer satisfaction, which has remained at a record level for several months and which rose once more in Q3 2020 across all areas (brand, products and customer service). These positive developments lead to significantly fewer cancellations: In Q3 2020, UPC had 25 per cent fewer cancellation requests than a year ago.
A further milestone is the distribution agreement between UPC and Swisscom about the reciprocal activation of MySports and blue Sport (formerly Teleclub) on the platforms of each contract partner. Thanks to this, since 20 October 2020 both parties have been enabling mutual, equal and full access to one another’s live sport content. This agreement will benefit 1.8 million Digital TV customers of UPC and the MySports distribution partners from Suissedigital, as well as 1.55 million Swisscom TV customers.
The B2B segment of UPC has been strongly affected by the coronavirus pandemic over the last months, but continued to demonstrate stable performance in Q3 2020 despite the challenges. Although revenue dropped by 3.9 per cent compared to the same quarter last year – mostly due to Wholesale Voice with a lower profit margin in Q3 2020 – the core business of UPC Business as a whole continues to grow.