Market Watch

Cablecom Brings in 'Try Before You Buy' Offer



Cablecom, the Swiss cable operator owned by UPC, is introducing a 'Try and buy' offer in a bid to woo subscribers. Launching this autumn, the campaign will allow customers to try any Cablecom product for up to 60 days without a contract. Customers wishing to cancel the service need to do so before the expiry of the trial period, and return all equipment to the company.

Analysis
The 'Try and Buy' offer could be the shot in the arm needed for Cablecom and the Swiss cable industry to boost its customer acquisitions and reduce churn. Screen Digest estimates reveal that Cablecom, and the Swiss cable industry, has been slowly churning subscribers since 2007.

In the past several months, Cablecom has been busy improving its service, including rolling out its video on demand (VoD) and catch up services across the country, as well as boosting its HD offering. Its 'Try and Buy' offer is meant to give Swiss consumers a chance to experience these new services without tying into a long term contract. Cablecom's services are priced relatively cheaply when compared to the competition from incumbent telco Swisscom (which offers IPTV, DSL/Fibre based internet and telephony services) and rival cable consortium Quickline. Cablecom will be banking on the fact that its trial period, combined with a discount of around 30 per cent over Swisscom prices (on equivalent triple-play bundles) will help drive customers to its services. Cablecom's bundled prices currently include a PVR box and access to VoD services, for which Swisscom charges an additional fee.

We expect the offer to increase fourth quarter sales for Cablecom. However, what percentage of these subscribers choose to remain with Cablecom, and the impact of the offer on the operator's SAC (subscriber acquisition cost) on account of additional marketing (targetting short term subscribers) and hardware costs will be fully known only at the end of Q1 2011.

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