Published:
15-Mar-07
Spanish Cable operator Ono celebrated its first profit in the last quarter of 2006, earning €8m. the company said revenues had decreased slightly to €1,600m, as it focused during the year on increasing profitability and margins. Ono expects EBITDA to rise to between €650 million and €680 million in 2007.
Ono bought cable operator Auna in 2005 and concentrated during 2006 on the unification of its service portfolio and on upgrading Auna's network. Ono closed the year 2006 with 1,802,197 unique cable homes, up 140,000 on year end 2005. More than 68 per cent of homes now take two or more services. Significant growth has taken place in triple-play, with 31.1 per cent of homes taking telephony, Internet and television at the end of 2006, up from 25.9 per cent in the previous year. Figures were helped by the November 2006 launch of a two month free telephony promotion, including telephone line plus flat rate national calling. At the end of 2006, Ono had 924,000 TV subscribers, 88 per cent of which are digital, and more than 1,000,000 broadband Internet customers. Telephony continues to account for the largest portion of Ono's RGUs, with 87 per cent of the cable homes subscribing to the service (1,568,000 subscribers).
Our take...
Spain is together with the UK one of the highest countries in terms of triple play penetration and Ono is to follow in the footsteps of the UK's Virgin Media after signing an agreement with Telefonica to launch a mobile virtual network operator (MVNO) during 2007, bringing quadruple-play to its clients. This expansion of service offerings is crucial to Ono's continued growth in the competitive Spanish market.
Although ARPU has increased from €50.70 at the end of September 2006 to €51.40 at the end of the year, it is €0.50 lower than year end 2005. Ono launched its VOD service (ojo) in Madrid and Barcelona in November 2006, this service was already available in all the old Ono home and on-demand will not contribute significantly to revenue growth. Ono is increasingly seeing competition from digital terrestrial television. Spain recently eliminated the must carry obligation for the DTT channels, and ONO is beginning to witness the loss of lower value subscribers as they migrate to the free DTT service. Focus must now be on maintaining revenue growth by increasing the number of services and packages taken by its clients.
Spain,
