German Cable Companies Back in Black

Little sign of cord cutting as Kabel Deutschland and Kabel BW report strong first half results.

COLOGNE, Germany - Cord cutting? What cord cutting? First half results from Germany's Kabel Deutschland (KDG) and Kabel BW provided further evidence that, in this territory at least, cable remains king. Both companies booked strong revenue and profit growth. Sales at market leader KDG were up 5.8 per cent year-on-year to $592 million (€412.1 million) and the company turned its $3.5 million loss in H1 2010 into a $12 million (€8.5 million) net profit. While the total number of KDG customers slipped slightly, to 8.7 million from more than 8.8 million a year ago, more Germans signed up for KDG's broadband, telephony and pay-TV services, boosting revenue overall.

It was a similar story at regional cable operator Kabel BW, which saw revenues jump 10.7 per cent to $431 million (€300.2 million) and pre-tax profits top $144 million (€100.4 million), a 28.4 per cent increase. Again it was premium services driving the numbers, as pay-TV subscriptions jumped 39 per cent to 324,000 and broadband/telephony subscriptions were up about 25 per cent to 740,000. Kabel BW even managed to increase its total customer base, adding 48,000 new subscribers to make nearly 2.4 million overall. John Malone’s Liberty Global bought Kabel BW in a $4.5 billion deal earlier this year.