KPN beats UPC and Ziggo on TV market

Tuesday 19 February 2013 | 15:27 CET | Background

The Dutch TV market saw some remarkable developments during the fourth quarter of 2012. Ziggo, the largest cable operator, did not add any new digital TV customers, while the largest challenger, KPN had its best quarter ever in terms of customer wins. The second-largest cable operator, UPC had a reasonable quarter compared with the third quarter, but the introduction of its new Horizon box did not have much of a visible effect. KPN also passed UPC to become the second-largest TV provider in the Netherlands

KPN larger than UPC

First the numbers: KPN was able to add almost 200,000 new TV customers during the fourth quarter to end 2012 with 1.76 million, of which 1.01 million used IPTV services. In comparison, Ziggo saw its total TV customer base decrease by 46,000 to 2.78 million, with no growth in digital TV customers. UPC saw its TV customer base drop by 30,000, despite a gain of 12,000 digital TV customers, ending 2012 with a total base of 1.73 million, thus losing its second place on the Dutch TV market to KPN.

Problematic analogue to digital conversion

The cable operators are having problems getting their analogue TV customers to switch to digital TV services. The digital/analogue conversion ratio (digital TV growth divided by analogue TV loss) has dropped from more than 60 percent at the end of 2011 for both Ziggo and UPC to almost 30 percent for UPC and zero for Ziggo at the end of 2012. Ziggo blamed the bad quarter on increased competition. At the same time the conversion of analogue to digital has become more difficult, as 80 percent of its TV customers already have digital TV services. UPC has a larger potential base, with digital TV penetration at only 63 percent, but has seen more analogue customers leaving for other providers.

Figure 1: Quarterly change in Ziggo and UPC TV and digital TV customerrs; digital/analogue conversion rate at Ziggo and UPC (Sources: Ziggo, UPC quarterly reports, Telecompaper calculations)

KPN buys customers, organic growth also high

KPN won 196,000 new TV customers during the fourth quarter of 2012, the highest quarterly growth since the operator started offering TV services. The increase includes 109,000 TV customers from FTTH service providers Concepts, Edutel, KickXL and XMS, whose acquisition was completed in the beginning of the fourth quarter. Among these acquired TV customers, 60,000 use IPTV services and 49,000 have analogue TV connections. Without the acquisitions, KPN won 97,000 new TV customers during the quarter, with 123,000 new IPTV customers clearly making up for the loss of Digitenne (DVB-T) customers. The organic quarterly growth is still the highest ever for KPN.

Figure 2: KPN quarterly growth in TV and IPTV customers, with and without FTTH acquisitions (Source: KPN quarterly reports)


Ziggo seems to have reached the limits of simply talking analogue customers into staying as customers while changing to digital TV, based on the drop-off in its digital/analogue conversion rate. UPC has more room to win its analogue customers over to digital TV, as its digital penetration is much lower. But the new Horizon set-top box has not yet had a positive effect on digital TV intake. This leaves KPN as the current winner on the Dutch TV market, with the highest organic growth, fed by the increasing coverage of FTTH services.

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