Profits were also up 9% in line with expectations, to €383 million. At the same time, the company announced two new mobile data formulas which it claims could mean savings for 85% of clients.
The number of digital customers rose by 116,700 during the period, so that 68% of all TV customers are now digital. But the company is locked in a stalemate with the Flemish media company VMMa, owned by De Persgroep, which broadcasts VTM, 2BE and Vitaya, over the amount Telenet pays to air the stations. Sickinghe said the VMMa was eyeing his company’s results as an excuse to demand more money.
The broadcasters complain (VMMa is not alone in this) that the distributors – Belgacom as well as Telenet – provide their customers with the means to postpone viewing and to skip advertising. That reduces the number of viewers VTM, for instance, can bring to advertisers, and negatively affects the rates the station can charge for advertising, at a time when the market is under continuing pressure.
The problem is not new: Viewers have been time-shifting and skipping ads since the days of the VCR, but now the means of doing so are much more effective and provided by the distributors themselves. The problem has become so severe that a proposal has been discussed in the Flemish parliament to give broadcasters more say in the introduction of new services to digital TV customers. That proposal targets less the existing digicorder and more future services, such as TV-on-demand. As a result of the stalemate with VMMa, none of the broadcaster’s stations is currently on Yelo, Telenet’s first tentative step towards video on demand.
“We understand that VTM wants more money from Telenet,” Sickinghe told De Standaard. “Objectively, we think that’s indefensible. This has nothing to do with the functioning of the digibox; it’s all about money. In the meantime, we’re still paying VTM according to the former contract, which has expired. …I’d like for them to reveal how much they’ve had from us since 2005, then everyone can judge how bad their situation is. In fact the opposite is true. The sums involved have increased enormously.”
The proposal before the Flemish parliament will be back on the table after the summer recess. Sickinghe says that it is unlikely to prove popular in a pre-election period.
Last week also saw the launch, meanwhile, of King and Kong, two new Telenet formulas for mobile internet customers – the fastest-growing sector of the communications business. The King package offers 150 call minutes, 10,000 SMSes and 500 MB of mobile data for €20 a month. Kong offers 2,000 minutes and 10,000 SMSes as well as 1 GB of data for €70. Both plans offer reductions for clients of other Telenet services.