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[Satellite TODAY 09-24-10] Investment bank UBS is bullish about the prospects of Nordic DTH service provider the Modern Times Group (MTG), according to a research report released Sept. 22.
UBS Media Equity Analyst Tamsin Garrity, author of the report, said MTG, which owns Viasat Broadcasting, was an attractive investment proposition and issued a Buy rating on the company’s stock. “MTG is a high-quality company with a good balance of assets that is seeing much higher growth than peers. The company has diverse revenue streams: pay-TV provides a stable revenue stream, advertising exposure provides cyclical exposure and all markets continue to benefit from structural growth.”
As of June, Viasat had more than 710,000 DTH subscribers in the Nordic region and also has been steadily growing its IPTV subscriber base to 167,000 customers — up more than 50,000 compared to the same stage last year. The company also doubled the numbers of its DTH customers taking HD services to 152,000.
To support its growth, MTG has developed an initiative to expand its DTH satellite presence in certain emerging European markets. While the operator had just 350,000 DTH subscribers in the Baltic region and Ukraine, DTH subscriber growth in these markets has been relatively flat in 2010.
Garrity believes MTG’s performance in the pay-TV arena could be a key to its success. “In pay-TV Nordic there is upside potential from increased penetration, subscribers, average revenue per user (ARPU), lower subscriber acquisition costs (SAC) and increases in channels. Near term, the pay-TV business should benefit from the recent acquisition of English Premier League football broadcasting rights. The company has a platform agnostic approach and leverages IPTV to increase penetration. The average margin of IPTV is similar to DTH over the lifetime period of a contract, representing a significant opportunity.”
UBS Media Equity Analyst Tamsin Garrity, author of the report, said MTG, which owns Viasat Broadcasting, was an attractive investment proposition and issued a Buy rating on the company’s stock. “MTG is a high-quality company with a good balance of assets that is seeing much higher growth than peers. The company has diverse revenue streams: pay-TV provides a stable revenue stream, advertising exposure provides cyclical exposure and all markets continue to benefit from structural growth.”
As of June, Viasat had more than 710,000 DTH subscribers in the Nordic region and also has been steadily growing its IPTV subscriber base to 167,000 customers — up more than 50,000 compared to the same stage last year. The company also doubled the numbers of its DTH customers taking HD services to 152,000.
To support its growth, MTG has developed an initiative to expand its DTH satellite presence in certain emerging European markets. While the operator had just 350,000 DTH subscribers in the Baltic region and Ukraine, DTH subscriber growth in these markets has been relatively flat in 2010.
Garrity believes MTG’s performance in the pay-TV arena could be a key to its success. “In pay-TV Nordic there is upside potential from increased penetration, subscribers, average revenue per user (ARPU), lower subscriber acquisition costs (SAC) and increases in channels. Near term, the pay-TV business should benefit from the recent acquisition of English Premier League football broadcasting rights. The company has a platform agnostic approach and leverages IPTV to increase penetration. The average margin of IPTV is similar to DTH over the lifetime period of a contract, representing a significant opportunity.”
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