Zon Chief Costa Forecasts Growth of Portugal Pay-TV Will Slow

Zon Multimedia SGPS SA, Portugal’s biggest cable-television company, predicts the country’s pay-television growth will slow in next three to four years as the market matures, Chief Executive Officer Rodrigo Costa said.

“The market can still grow, but it will be slower,” Costa told reporters in Lisbon today. “We have to be conscious of the difficulties the country is facing and the maturity of the market.”

The country’s overall market may increase to as many as 3.3 million pay-TV clients in the next three to four years, Costa said. Portugal had 2.98 million in December after adding more than 800,000 since the first half of 2008, according to the country’s telecommunications regulator.

Zon was spun off from Portugal Telecom SGPS SA in November 2007, increasing competition in the market as its former parent started a TV offering of its own. Zon ended 2011 with 1.57 million TV customers, little changed from a year earlier. It added 12,800 TV clients in the fourth quarter.

Portugal is facing a recession as the government cuts spending and increases taxes to meet the terms of a 78 billion-euro ($104 billion) aid plan from the European Union and the International Monetary Fund. As the country’s borrowing costs surged, Portugal followed Greece and Ireland in April in seeking a bailout.

The company, which has been increasing clients with “triple-play” services of phone, Internet and TV, predicted more growth in the broadband and fixed-line businesses. Costa said the broadband market can grow by 20 percent to 25 percent in the next few years.

At the end of 2011, the proportion of Zon’s clients with triple-play services climbed to 60 percent from 55 percent a year earlier.

To contact the reporter on this story: Anabela Reis in Lisbon at areis1@bloomberg.net.

To contact the editors responsible for this story: Jerrold Colten at jcolten@bloomberg.net

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