At €1.0 billion, VodafoneZiggo's revenue grew slightly last quarter compared to Q1 of 2022. The company made substantial investments in its networks, products and services in this first quarter. Due to increased operating costs, the operating result (EBITDA) fell 8.2% to €440 million. VodafoneZiggo reaffirms that it will achieve its stated financial targets for 2023.
Mobile subscriptions continue to grow, with VodafoneZiggo also doing well in the business-to-business broadband market. However, the number of households served by Ziggo with television, internet and telephony on the fixed network declined slightly. The reason for this is the competition in the consumer market, which remains intense.
The lower EBITDA – in spite of the slight increase in revenue – is a direct consequence of higher operating costs. These involve both higher energy costs and increased wage costs following the collective labour agreement (CLA) for VodafoneZiggo employees concluded at the end of last year.
Investments in networks
Notable in the last quarter is the relatively high percentage of CAPEX expenditure, or capital investment in networks, products and services, amounting to 23% of revenue.
CFO Ritchy Drost: “The telecom market is a challenging market, not just because of competition but also because of the impact of persistently high inflation. We consistently invest in our networks in order to continue to provide the best customer experience on both mobile and fixed networks. We’re already well ahead of the government's digitisation agenda, which requires everyone to be connected to 1 Gbit/s by 2030. We already made this happened since late last year. We continue to focus on providing value to our customers through the products we offer. Our customers will once again benefit from a substantial speed increase through Ziggo this year; we already provide 5G over Vodafone's mobile network and delivering the best content, soon including UEFA football, films and series through Ziggo Go and unique experiences for our customers through Priority."
More details for first quarter of 2023
The number of converged customers, combining products and services from Vodafone and Ziggo, rose again in the first quarter. The number of Ziggo customers who also have a mobile subscription with Vodafone reached a total of 1.5 million.
The total number of Internet connections remained stable at approximately 3.3 million. The number of B2B connections increased for the 25th quarter in a row, rising by 10,000 this quarter. Due to increased competition in the consumer market, VodafoneZiggo provided services to 18,500 fewer internet customers. This brings the net decrease to 8,500.
The total number of SIM cards (post-paid) increased by 38,500, of which 18,000 were for B2B customers. VodafoneZiggo’s mobile services now have 5.5 million customers.
VodafoneZiggo's share of the B2B market has grown for the ninth quarter in a row, with revenue growth of 3.1% achieved in the first three months of 2023. VodafoneZiggo also continues to grow in the SOHO and SME customer market.
Mobile revenue in the consumer market grew 7.3% compared to the first quarter a year earlier. Revenues at Vodafone Business are also up due to more handset sales, growth in customer numbers, higher roaming income and more “Internet of Things” revenue. This is offset by price pressure among large business customers and lower revenue from out-of-bundle usage.
At the end of 2022, VodafoneZiggo completed the mammoth task of being the first provider to offer 1 Gbit/s internet nationwide. Preparations for the internet of the future are now underway: this week, VodafoneZiggo is testing the Docsis 4.0 protocol – a major technical upgrade for the Ziggo network – at its Amsterdam TEC campus. Thanks to Docsis 4.0 and other adjustments to the network, VodafoneZiggo expects its internet speeds and network capacity to grow significantly. These speeds will become available to customers in the years ahead.
Speed & entertainment
Early this year, VodafoneZiggo announced speed increases for Ziggo customers from May 2023. This year in particular, upload speeds will increase by an average of 40 per cent. Customers are increasingly online for different purposes, such as streaming, working from home, video calling, gaming and shopping. Not only are they accessing the internet more often, they are also using more and more devices to do so. Research has shown that customers greatly appreciate the fact that the Ziggo internet is evolving with these needs. That’s why VodafoneZiggo increases the capacity of its fixed network on an annual basis.
After adding all the films, series and documentaries from streaming service Disney+ to Ziggo's platform at the end of last year, HBO Max followed suit in the first quarter of 2023. As of today, Ziggo customers can use the Disney+ app in the Mediabox Next and Next Mini menus. This allows easy access to thousands of hours of entertainment, often available in 4K or UHD picture quality. Ziggo thus aspires to making the largest streaming services available in one TV platform.
Vodafone and Ziggo customers can again expect exclusive giveaways and events through the Priority programme in 2023. This is our customer loyalty programme that offers unique experiences in collaboration with partners. Last quarter for instance, we organised three “The Tribute” concerts in the Ziggo Dome, ran ticket promotions around the Metallica concert in Amsterdam at the end of April, and a giveaway for the Ajax-Feyenoord “Klassieker”.
Preparations for broadcasting all UEFA club football from the 2024 – 2025 season are on schedule. In the meantime, Ziggo Sport's range is expanding all the time: this spring, Ziggo Sport broadcast El Clásico, in addition to the Hockey World Cup, Formula E and the 24 Hours of Daytona, among others.
Both of VodafoneZiggo networks have been consistently ranked among the world's best, the global top 10, for years. This was again evident at the end of February 2023 with the annual announcement of Umlaut's measurement results. Last year, our fixed network was voted the best network in the Netherlands. This year, we are in second place by a minimal difference in points. We are still at the top when it comes to download speed and stability, subcategories which are important to users. The differences are also minimal on the mobile network: here, all three Dutch mobile networks are classed as “Outstanding”.