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Dutch telco KPN continues push into pay TV

The Netherlands’ incumbent telecom operator KPN has continued its aggressive push for growth in pay TV by acquiring local cable operator Caiway for an undisclosed amount. Caiway delivers TV, broadband and telephony services in several parts of the Netherlands through cable and fiber infrastructures and had intended to get into IPTV to expand its footprint. Instead it has been swept up by KPN’s grander plans to become a major player in the Dutch pay-TV market by reaching cable as well as its own IPTV and DTT subscribers.

KPN’s recent fortunes in pay TV have been mixed, with strong growth in IPTV balanced by slight decline in DTT and continued erosion of its subscriber base for mobile TV based on the ill-fated DVB-H standard. As of June 1, KPN will follow the lead of many other operators by stopping its DVB-H-based mobile TV service. And like some other operators, KPN’s mobile TV service got off to a good start in 2008, registering 40,000 customers in the first year, but since then, subscriber numbers have fallen steadily in the absence of compelling content and lack of sufficient quality. There are currently 20,000 customers left. KPN wants to use the frequencies allocated to DVB-H for its DTT service Digitenne and hopes to increase subscribers there, which declined by 13,000, or 1.5 percent, over the first quarter of 2011 from 895,000 to 882,000 by March 31.

However, IPTV subscriptions rose strongly by 19.2 percent from 302,000 to 360,000 over the same period. This took KPN’s total number of pay-TV subscribers to 1.242 million, or 16 percent of the Dutch pay-TV market. The Caiway acquisition brings an additional 143,000 TV subscribers, raising KPN’s share to 18 percent.