Unitymedia digital cable subscribers down 49k in 2Q09

Thursday, August 13th, 2009
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COLOGNE — Unitymedia, Europe’s third largest cable-based media and communications services provider, today announced results for the quarter ended June 30, 2009.

Unitymedia is the largest cable television operator in the German federal states of North Rhine-Westphalia and Hesse and the third largest cable operator in Europe, as measured by the number of television subscribers.

Unitymedia Cable

Unitymedia’s cable segment delivered strong growth, with revenue increasing by 11% and EBITDA by 13%, as the Company continued to deliver superior value to its customers while maintaining its disciplined focus on costs and capital investments.

New Services RGUs, comprising Broadband Internet, Telephony and Digital TV Pay offerings, increased by 44% year on year. Unitymedia increased the penetration of its basic cable subscriber base taking retail broadband services from 6% to 11% year on year – highlighting the significant upsell potential of its cable base. New Services subscription growth demonstrates the appeal of Unitymedia’s products in a market where consumers increasingly value integrated communication and entertainment services from a single source. This has been supported by strong brand awareness and a broadening sales channel mix, reflecting how increased investments into sales & marketing are being converted into New Services growth. Despite the underlying growth trend and in line with expectations, the Digital TV Pay business has seen a one-off reduction in its RGU base, primarily relating to Unitymedia ceasing to retail Bundesliga programming as of June 30, 2009 – with the majority of expected Bundesliga churn having occurred in the second quarter and further Bundesliga related churn
expected in the second half of the year.

Digitisation of its basic cable subscriber base stood at 28% at quarter end, as Unitymedia continues on its strategy to upsell premium content to its digital base. In line with this strategy, Unitymedia launched a rebranded suite of genre based Pay TV packages on July 1, adding a fourth “Lifestyle” oriented pay TV package and including additional premium channels such as Discovery and Animal Planet to its existing packages.

Business Review (in ‘000s unless otherwise stated):

                                     Quarter ended
                                          June 30,            Quarter ended
                                     -------------      YoY       March 31, 
                                      2009    2008   Change            2009
                                     -----   -----   ------   -------------
Basic Cable
  Analogue                           3,289   3,681     -11%           3,262
  Digital                            1,266   1,031      23%           1,315
    Total Basic Cable                4,554   4,712      -3%           4,577

  BCS in % of Homes Passed             52%     54%     -2pp             52%
  Digital in % of BCS                  28%     22%      6pp             29%
  Digital (w/Premiere) in % of BCS     32%     26%      6pp             33%

New Service RGUs
  Digital TV Pay                       469     516      -9%             595

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