Market Watch

Telefonica Loses IPTV Subscribers


Display Driver IC Forecast

Spanish IPTV service Imagenio ended Q1 2011 with two thousand fewer subscribers than the previous quarter. The platform experienced its first decline in subscribers in two years, ending Q1 2011 with 786,000 subscribers.

Despite an increase in Telefonica's overall profits from its global operations, it experienced a fall in revenues earned from its Spanish operations.

Analysis
Although the loss in subscribers experienced by Telefonica is not large, it highlights the high level of competition it faces from rival pay TV operators.

The loss in subscribers and revenues comes as both satellite operator Digital Plus and cable company ONO begin to recover subscriber losses seen in recent years. Digital Plus experienced a decline of more than 320,000 subscribers between Q1 2008 and Q3 2010, impacted heavily by the economic crisis before returning to growth in Q4 2010. In 2011, Digital Plus halved the prices of its packages (set to last until October 2011) in an attempt to drive subscriptions.

Cable operator ONO, which also saw operations affected by the recession, saw a fall in subscriptions of 63,000 from Q3 2008, with the first increase in Q4 2010 as it expanded its channel offerings. Imagenio is undoubtedly feeling the effects of these changes; however it is important to note that while other operators faced declines in subscribers in the two years (including IPTV competitor Orange TV), Imagenio saw a rise in customers overall in the same period, partly driven by its inclusion of sports channel GolTV in the basic channel package.

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