Globo Cabo, currently in the middle of a complex financial restructuring, has reported first-quarter results showing a continuing hemorrhage of subscribers during the period. The nation?s largest MSO had 1,398,000 subscribers at the end of March, down from 1,428,000 in December. The contraction mainly reflected a stricter policy of disconnecting delinquent customers. Annualized churn rose from 19.3% in December to 20.4% in March, compared with 16.5% a year earlier. As for programming packages, only the Standard package gained as a share of the total, rising from 10.6% to 11.1% in the period. This increase in the proportion of subscribers for the lowest-priced package was partly offset by a jump in pay-per-view: PPV sporting events sold 30% more year over year and PPV sales of Big Brother Brazil totaled 12,000.
Vírtua, the broadband Internet service, had 55,000 subscribers at end-March, up from 53,300 in December. Management?s report says Globo Cabo no longer subsidizes sales of cable modems, justifying the slow pace of expansion.
The first-quarter results don?t reflect the capital increase now under way but next quarter the benefits of this process should begin to emerge. Following the meeting held May 2 to approve issuance of new shares and a new shareholder agreement, the company will finalize growth plans for the road show that will accompany the share issue. The capital increase of 1 billion reals is scheduled for completion by the end of June.