Belgacom Adds 49K IPTV Subscribers in 1Q09

Belgacom added 49,000 IPTV subscribers in 1Q09 giving it a total of 555,000 at the end of the quarter. Of these it added 5,000 homes with more than one IPTV set-top box leaving a total of 70,000. The ARPU for its TV service increased from 19.4 to 20.4 euros during the quarter. Its IPTV revenues remained flat during the quarter at 13 million euros. Belgacom said that its IPTV service is now EBITDA positive. It spent 27 million euros of capital on its IPTV service for set-top boxes, content, and infrastructure.

Belgacom continues to be successful in a very competitive Pay TV market. The Belgian cable companies fell behind Belgacom in services and technology and are now paying the price.

Belgacom Considering New IPTV Middleware

Light Reading published an article saying that Belgacom is considering replacing its Nokia Siemens middleware. Light Reading thinks that Microsoft is the leading contender. The other major vendors supporting Microsoft are Arris/C-Cor for video on demand, Amino for set-top boxes, and Verimatrix for content security.

The Nokia Siemens middleware came from its acquisition of Myrio. Myrio's middleware was originally designed for the small U.S. independent telcos.

This is an interesting situation. It does not appear that Nokia Siemens has made the investment in the Myrio middleware to allow it to scale to meet Belgacom's needs and to support the next generation of interactive applications.

Microsoft's Mediaroom is an obvious candidate. I expect that Alcatel-Lucent will use its strong relationship with Belgacom to push the MyView middleware that it acquired from Telefonica. Thomson's middleware that is used by France Telecom should be another strong candidate.

It will be bad news for Arris/C-Cor, Amino, and Verimatrix if Belgacom its replaces Nokia Siemens middleware.

Belgacom Adds 63K IPTV Subscribers in 4Q08

Belgacom added 63,000 IPTV subscribers in 4Q08, giving it a total of 506,000 at the end of 2008. It stated that it had a 30 percent share of the Pay TV market at the end of 2008. It now supports a second TV in the home using VDSL. There were 65,000 customers with a second TV at the end of the year. It IPTV ARPU grew to 17.2 euros during 2008 largely through the improved success of on demand services. Its total IPTV revenue grew to 86M euros in 2008.

Belgacom offers HD services using VDSL, which is available to 64 percent of the Belgian population. The ADSL-based IPTV service is available to 86 percent of the Belgian population.

Belgacom is making good progress and is showing how other operators in Europe can succeed in a cable-dominated market.

Belgacom Adds 52K IPTV Subscribers in 3Q08

Belgacom added 51,679 IPTV subscribers in 3Q08, ending the quarter with 443,139 subscribers, which gives it a 30 percent share of the Pay TV market in Belgium. Its ARPU was 17.9 euros at the end of September, an increase of 11 percent, year over year. More than 85 percent of Belgian households can be served by Belgacom's IPTV service, and 54 percent can watch HD. This number will increase to 60 percent who can watch HD by the end of 2008.

The continued roll out of VDSL-2 increased the take up of second TVs. At the end of September the total number of second TV users amounted to 53,651 of which 12,063 were added in 3Q08.

Belgacom has invested 55 million euros in its IPTV service in the first three quarters of 2008, including infrastructure and set-top boxes.

Belgacom's IPTV growth continues to be strong in a very competitive market.

Belgacom Adds 42K IPTV Subscribers in 2Q08`

Belgacom ended 2Q08 with 391,460 IPTV subscribers, an increase of 42,210 during the quarter. This compared to an increase of 43,931 in 1Q08. Its ARPU in 1H08 was 17.5 euros, up from 14.6 euros in 1H07. It stated that the increase in IPTV revenue has made a significant contribution toward offsetting its loss of voice revenue.

Belgacom continues strong IPTV growth. It is continuing to add more than 40 thousand new subscribers per quarter. It is achieving this success in a market that has been dominated by cable services.

Belgacom Ends 1Q08 with 349K IPTV Subscribers

Belgacom added 43,931 IPTV subscribers in 1Q08, ending the quarter with 349,250 subscribers. It added 200 thousand IPTV subscribers since the end of 1Q07.

The ARPU for its IPTV service grew to 17.4o euros in 1Q08 compared to 13.40 euros in 4Q07. Its IPTV revenue grew from 8 million euros in 1Q07 to 18 million euros in 1Q08.

Belgacom's IPTV service picked up momentum in 1Q08. It appears to be doing well against the entrenched cable services.

Belgacom at 305K IPTV Subscribers

Belgacom ended 2007 with 305,319 IPTV subscribers. It added 165,654 subscribers during the year, which more than doubled its subscriber base. It added 55,885 of these subscribers in 4Q07. Its IPTV revenues grew from 15 million euros in 2006 to 43 million euros in 2007.



The ARPU for Belgacom's IPTV service increased from 12.0 euros at the end of 2006 to 16.1 euros at the end of 2007. It stated that this increase in ARPU is the result of the end of its "Try&buy" offer and increased usage of new services.



Belgacom also stated that it invested 109 million euros in 2007 for its Broadway VDSL FTTN project. It invested 91 million euros in 2007 for its TV service.

Belgacom added more new subscribers in 2007 (166 to 128 thousand) than Telefonica, which serves a much larger market in Spain compared to Belgium. Belgacom is doing well against strong cable competition. I expect that this trend will continue through 2008.

Belgacom Added 58K Subscribers in 3Q07

Belgacom added 109,769 IPTV subscribers in the first nine months of 2007 and 58,086 in 3Q07. It stated that this increase was due to promotions that it introduced in 2Q07. It now has 249,434 subscribers. Its additions in 3Q07 were a significant improvement over the 41,857 added in 2Q07. It added less than 10 thousand new subscribers in 1Q07 largely due to churn caused by a "try & buy" program.

Belgacom received 29M euros revenue in the first 9 months of 2007 compared to 10M euros for the first 9 months of 2006. The ARPU for its TV service increased to 15.8 euros in 3Q07 compared to 11.6 12 months earlier.

Belgacom has gotten itself back on track. It is doing well picking up subscribers in a very competitive market with strong cable competition.

Belgacom to deploy Alcatel-Lucent VDSL

Belgacom will deploy 14 thousand VDSL nodes using Alcatel systems. It will use Alcatel-Lucent VDSL systems to support HD services starting in 2008. Belgacom had 190 thousand IPTV subscribers at the end of June 2007.

This shows that HD is about to become an important factor in Europe and will cause service providers to upgrade their networks, often to VDSL. The shorter loop lengths in Europe make VDSL a better approach than it is in the U.S.

Belgacom Retaining Nokia Siemens Middleware

Belgacom has extended its contract with Nokia Siemens for middleware software and integration services for another three years. Nokia Siemens will also provide set-top boxes to Belgacom to support HD services using MPEG-4 compression. Nokia Siemens has been providing these services to Belgacom since 2004. Belgacom had 191 thousand IPTV subscribers at the end of June 2007.

This settles this issue for Nokia Siemens. We had picked up rumors that Belgacom would move to the Alcatel-Lucent MiView middleware software. Clearly, this has not come to pass.

Belgacom Approaches 200K IPTV Subscribers

Belgacom reported that it had 191,348 IPTV subscribers at the end of 2Q07, an increase of 51,683 in the first half and 41,857 in the second quarter. It generated 16 million euros in revenue from its IPTV service in 1H07, which is up 11 million euros from 1H06. It achieved a 14.6 euro average monthly customer spending for its IPTV service in 1H07 compared to 10.9 euros in 1H06.

Part of this increase can be attributed to double play and triple play bundles that Belgacom introduced in 2Q07. The double play bundle consists of Internet plus IPTV and the triple play bundle consists of Internet plus IPTV plus mobile. Both of these bundles can be acquired with without a voice line.

Belgacom's "try & buy" program generated significant churn in 1Q07, which was absorbed by mid-May. The end of the “try & buy” promotion positively impacted the Belgacom TV ARPU, which grew to EUR 14.6 over the first six months of 2007, equal to a year-on-year increase of 34%.

The factors that contributed to Belgacom's success in 2Q07 were the:

• Introduction of Comfort View (Pause TV, instant Rewinding, PVR) in February
• Introduction of Belgacom TV over ADSL Time in March
• Additional channels (MTV, Nickelodeon) in Classic+ offer in April
• An extended video-on-demand offering -including concerts-, increasing the VoD usage
• Introduction of 'Internet +TV' packs at EUR 40 (ADSL Light) and EUR 50 (ADSL GO) in
  April, with option to include Mobile services (Smile 10)
• Launch of Walled Garden applications (yellow/white pages, railway schedules,
  holidays, news etc) in May

Belgacom has a major FTTN program underway and increased the penetration of its VDSL service from 44 percent to 52 percent of its households. Its IPTV service is available to 80 percent of Belgian households. In 1H07 Belgacom invested 53 million euros in its FTTN deployment and 45 million euros in its IPTV service.

Belgacom seems to be on track for significant growth with its IPTV service. I think that this shows that an IPTV service can compete well in a saturated cable market where the bulk of customers receive only analog services. Cable companies that want to defend against IPTV services need to upgrade their customers to digital services as quickly as they can.

Belgacom Adds 9.8K IPTV Subscribers

Belgacom added 9,826 IPTV subscribers in 1Q07 bringing its total to 149,491. The net adds in 1Q07 was nearly identical to its 9.6 adds in 1Q06 on top of a base of 33 thousand IPTV subscribers. It stated that the churn from its Try&Buy program affected its 1Q07 IPTV numbers. This program lasted from April 2006 through the end of January 2007.

Belgacom's IPTV revenue was 8 million euros in the 1Q07 compared to 2 million euros in 1Q06. The increase was due to the much larger number of subscribers as well as higher ARPUs. Its ARPU in 1Q07 was 13.40 euros compared to 11.90 euros in 1Q06.

Belgacom expects to add 100 thousand new IPTV subscribers in the full year 2007, which is the same as its 2006 results. It expects that its IPTV ARPU will be 15 euros in 2007.

Belgacom is making good progress and should be able to achieve its goal of 100 thousand new IPTV subscribers in 2007.

Belgacom Adds 100 Thousand IPTV Subscribers

Belgacom announced that it had 139,665 IPTV subscribers at the end of 2006, which is an increase of 100 thousand subscriber over the end 2005. It achieved its original target of 100 thousand IPTV subscribers for 2006 by the end of the third quarter. Belgacom stated that it added nearly 34 thousand IPTV subscribers in the fourth quarter.

Belgacom's IPTV monthly ARPU increased from 11.9 euros per month at the beginning of 2006 to 12.6 euros per month at the end of the year due to increasing use of video on demand services. It expects to add IPTV subscribers in 2007 at the same pace as 2006 and expects its monthly IPTV ARPU to grow to 15 euros.

Belgacom's IPTV business generated revenue of 15 million euros in 2006 with costs of 53 million euros. This gives an EBITDA loss for its IPTV business of 38 million euros.

Belgacom deployed ADSL-2+in 2006 in additon to VDSL and now is able to provide TV service 79.5 percent of the population of Belgium by the end of 2006.

You can get Belgacom's full fourth quarter 2006 release at

http://www.belgacom.be/company/com/jsp/static/20070302_ar2006.jsp

Belgacom is doing very well with its IPTV deployment in a very competitive market. It is winning its customers away from the cable companies by introducing digital services before the cable companies and leading the market in terms of services such as video on demand.

Belgacom is a good example of how IPTV should be deployed, especially in Europe. There is no reason why its success cannot be replicated across the continent.