Kabel Deutschland in trouble for HD cable carriage conditions

The current HD carriage distribution model of Germany’s largest cable operator Kabel Deutschland doesn’t comply with the principle of equal chances and poses unreasonable obstructions to smaller and new TV channels.

This is the result of the evaluation of the large platform operators’ carriage contracts by the German media authorities’ licencing and supervision commission ZAK. The examination includes the contracts for encrypted HD distribution of commercial TV channels offered to viewers for an additional reception fee.

The usage of the so called CPS model (coins per subscriber) to gain access to the HD platform obstructs variety in the broadcast market as it makes economically sense only for strong market players in its current constitution, argues ZAK.

The media regulators have, thus, requested Kabel Deutschland to change the CPS model for encrypted HD distribution to achieve compliance with the prohibition of discrimination prescribed in the broadcast law and to end the unequal treatment. Federal network agency Bundesnetzagentur will be included in this procedure.

ZAK will evaluate the carriage conditions of further platform operators including Astra platform HD+.

Kabel Deutschland reports 4Q 2014 results

Premium TV RGUs increased by 55 thousand net adds quarter on quarter to a total of 2.5 million Pay TV and DVR RGUs

UNTERFOEHRING — Kabel Deutschland Holding AG (‘Kabel Deutschland’, ‘KDH’ or ‘the Company’), Germany’s largest cable network operator, today released its consolidated financial results for the third quarter and nine months ended December 31, 2014 of fiscal year 2014/15 ending March 31, 2015.

In Premium TV, Kabel Deutschland recorded 55 thousand RGU net additions in the third quarter of fiscal year 2014/15. Both Pay TV and DVRs contributed to the increasing overall RGU base, which reached 2,480 thousand as of December 31, 2014. HD Private increased to 1,991 thousand activated smartcards (versus 1,610 thousand one year earlier). As a result of a better subscriber mix and growing Premium TV penetration, the total blended TV ARPU per subscriber improved to €11.09 in the third quarter.

Kabel Deutschland’s direct subscriber base expanded to 7.7 million (growth of 65 thousand net adds year on year) out of a total of 8.3 million unique subscribers. The overall RGU base increased by 824 thousand or 5.6% from the previous year to 15.6 million at the end of December 2014. Due to the increasing penetration of our growth business activities, the RGU per subscriber ratio climbed to 1.87 (1.76 one year ago) and the total blended ARPU per subscriber increased to €18.52, up by €1.22 or 7.1% year on year.

Kabel Deutschland Cable Subscribers and RGUs (‘000)

                                   Mar-13  Jun-13  Sep-13  Dec-13  Mar-14  Jun-14  Sep-14  Dec-14
                                   ------  ------  ------  ------  ------  ------  ------  ------
Subscribers
 Direct Basic Cable subscribers     7,194   7,179   7,165   7,149   7,134   7,116   7,111   7,114
 Indirect Basic Cable subscribers     897     822     805     798     747     729     708     690

RGUs
 Premium TV                         2,070   2,094   2,149   2,235   2,302   2,372   2,425   2,480
  thereof Pay TV                    1,303   1,290   1,306   1,343   1,365   1,389   1,402   1,417
  thereof DVR                         767     804     843     892     938     983   1,023   1,063
 Basic Cable                        8,617   8,498   8,440   8,392   8,301   8,251   8,210   8,176

Kabel Deutschland adds 76,000 pay TV subscribers in 2013

(Kabel Deutschland erneut mit kräftigen Zuwächsen im Internetgeschäft)

Wednesday, February 5th, 2014 

UNTERFOEHRING — Kabel Deutschland Holding AG (‘Kabel Deutschland’, ‘KDH’ or ‘the Company’), Germany’s largest cable network operator, today released its consolidated financial results for the third quarter and nine months ended December 31, 2013 of fiscal year 2013/14 ending March 31, 2014.

The recovery of the Premium TV business continued in Q3 with 86 thousand RGU net adds quarter on quarter after a weaker H1: The Company added 24 thousand RGUs in Q1 and 55 thousand RGUs in Q2; both quarters were impacted by the un-encryption of private SD channels and extraordinary churn of Kabel BW Pay TV wholesale customers. In total, Premium TV RGUs grew to 2,235 thousand end of December 2013, plus 265 thousand or 13.5% year on year. HD Private increased to 1,610 thousand activated smartcards (versus 1,068 thousand one year earlier). As a result of better subscriber mix and growing Premium TV penetration, the total blended TV ARPU per subscriber improved to €10.83 in the third quarter, up by €0.40 or 3.8% from €10.43 in the previous year.

Kabel Deutschland’s direct subscriber base expanded to 7.6 million (plus 24 thousand net adds year on year) out of a total of 8.4 million unique subscribers. The overall RGU base increased by 641 thousand or 4.5% from the previous year and totaled 14.8 million end of December 2013. Due to the rising penetration of New Services, the RGU per subscriber ratio climbed to 1.76 (1.66 one year ago) and the total blended ARPU per subscriber increased to €17.30, up by €1.25 or 7.8% year on year.

Kabel Deutschland Cable Subscribers and RGUs

                                                 December 31,
                                          -------------------  
As of                               Unit   2009   2010   2011
                                   -----  -----  -----  -----
Subscribers
 Direct Basic Cable subscribers    #'000  7,337  7,309  7,214
 Indirect Basic Cable subscribers  #'000  1,451  1,278  1,151

RGUs
 Premium TV                        #'000  1,039  1,222  1,548
  Thereof Pay TV                   #'000    860    962  1,082
  Thereof DVR                      #'000    179    261    466
 Basic Cable*                      #'000  9,052  8,936  8,810

                                          Dec-12  Mar-13  Jun-13  Sep-13  Dec-13
                                          ------  ------  ------  ------  ------
Subscribers
 Direct Basic Cable subscribers    #'000   7,207   7,194   7,179   7,165   7,149
 Indirect Basic Cable subscribers  #'000     934     897     822     805     798

RGUs
 Premium TV                        #'000   1,970   2,070   2,094   2,149   2,235
  Thereof Pay TV                   #'000   1,267   1,303   1,290   1,306   1,343
  Thereof DVR                      #'000     704     767     804     843     892
 Basic Cable                       #'000   8,659   8,617   8,498   8,440   8,392

On October 14, 2013, the voluntary public takeover offer for KDH by Vodafone was settled and completed.

On December 10, 2013, Kabel Deutschland introduced triple play packages for new customers combining Internet & Phone with Premium TV and Basic Cable.

Strong Q2 for Kabel Deutschland

Kabel Deutschland has seen a second quarter recovery in its premium TV subscriptions, adding a further 55,000 units in its second financial quarter.

The Vodafone-owned cablenet had previously announced the addition of 84,000 new subscribers to its Internet and Phone services, resulting in its strongest second financial quarter for several years.

KDG said revenues had returned to a quarterly growth track, increasing by €7 million in Q2. Year on year, revenues rose by 4.0% to €471 million

However, the company posted a net loss of €129 million or minus €1.46 per share due to a negative net income effect of €206 million from the Vodafone transaction.

In the first quarter KDG added just 24,000 premium TV units after a decision by Germany’s private channels reduced the opportunity to upsell.

Kabel Deutschland’s direct subscriber base expanded to 7.6 million (plus 35 thousand net adds year on year) out of a total of 8.4 million unique subscribers.

Encryption changes hit Kabel Deutschland subs

Changes in encryption and its TV product portfolio, coupled with the cost of investment in broadband and marketing made for an unhappy first quarter and Kabel Deutschland.

The operator, in the process of being acquired by Vodafone, reported an increase in EBITDA of 3.8% at €217 million.

Premium TV added an additional 24,000 RGU net additions in KDG’s financial first quarter. Demand was generally soft following the decision of key private channels to remove the encryption from their standard definition channels.

Subsequent changes in the portfolio in April has meant the standard definition product has become ‘plug and play’ for the latest TV sets, reducing demand for basic pay-TV services.

KDG says that amid a pent up demand for HD and PVR services its general positive outlook on Premium TV remains unchanged.

In total, Premium TV RGUs amounted to 2,094,000 at the end of June, plus 312 thousand year on year.

HD Private more than doubled to 1,380,000 activated smart cards (versus 688 thousand one year earlier). As a result of better subscriber mix and growing Premium TV penetration, the total blended TV ARPU per subscriber increased to €10.66 in the first quarter, up by €0.46 or 4.5% from €10.20 in the previous year.