Swedish cable TV operators Com Hem, notable for recently incorporating the Scandinavian branch of Netflix into their service, have reported an unusual quarterly performance that will be the cause of a mixed bag of reactions for company executives.
A key figure in their quarterly measurements is the number of connected homes they have, with Q3 2013 offering a pleasing increase of 41,000, moving towards a total of 1.789 million homes in Sweden being covered.
Also positive for the company was their broadband revenue, with overall figures in that department slightly increasing. Dropping in revenue, however, was their total overall revenue (losing year-on-year from SEK1.133 billion to SEK1.104 billion between Q3 of 2012 and 2013), with an operating margin decreased to SEK569m from SEK582m, whilst a breakdown of figures showed that their ‘digital TV’ and ‘telephone’ services naturally fell given the overall figures and broadband’s success.
Com Hem’s capital expenditure, meanwhile, could be considered as the leading cause of those overall figures, with SEK267m becoming compared SEK167m in the course of a year, with investment in American set-top box providers TiVo (as seen below) being a lead reason for the numbers.
However, their performance subscriber-wise is not as reflective of this excuse, with quarter-on-quarter numbers for ‘triple-play customers’ dropping from 246,800 to 240,900 since Q2 2013, whilst digital TV-only subscribers dropped slightly to 603,000, though broadband again saw an increase, growing slightly to 550,700. With minor successes such as that making the company’s overall standing fairly hard to read (although still one of Sweden’s primary telecommunications providers), will the many negative points from Com Hem be a cause for concern, or will investment in services such as Netflix cause the release to be only a temporary blip?
Current Com Hem CEO Tomas Franzen, who is in early 2014 departing to take up a position at rivals Bonnier, said of his present employer’s success/failure of Q3: “I am happy to see increased revenue from our high-speed broadband services and the growing number of homes connected as well as the growing number of individual subscribers in the last quarter compared with the second quarter of 2013. Customer demand for higher speeds continues to grow. However, the market environment for digital-television and fixed-telephony continues to be competitive. I am convinced that our new digital-television products, TiVo and TiVoToGo, launched in October, will help us increase our digital-television revenue over time. We are currently in a phase of large investments in both our services and network in order to strengthen our position in the market.”