Grupo Corporativo ONO SA, the Spanish cable operator preparing for an initial public offering, cut customer turnover last quarter after putting more emphasis on selling bundles of TV, Internet and phone service.
The company added 9,000 Internet customers and 183,000 mobile subscriptions in the fourth quarter, according to documents obtained by Bloomberg News and confirmed by an Ono spokesman. ONO lost 17,000 TV customers.
The company announced its revamped strategy in October as earnings were eroded by customers’ reduced spending power and price competition from companies such as Telefonica SA, Spain’s biggest phone company, and Jazztel Plc. Turnover, or churn, fell two points to 20 percent in the quarter ended in December.
ONO’s earnings before interest, taxes, depreciation and amortization in the first nine months of the year fell 6.3 percent from a year earlier to 529 million euros ($715 million). Churn in the third quarter was 22 percent, up from 18 percent a year earlier. The company hasn’t released financial results for the fourth quarter.
The company’s fixed network, providing broadband, television and phone services to 1.87 million customers, is proving attractive to possible acquirers, people familiar with the matter have said. Vodafone Group Plc (VOD), the second-biggest wireless operator, is interested in buying the Spanish company as it adds fixed services to its mobile offer across Europe, two people familiar with the negotiations said in the last week. Liberty Global Plc Chief Executive Officer Mike Fries also named ONO as a potential target in September.
ONO CEO Rosalia Portela said in September that an IPO is “a priority, our goal and we expect to be able to carry it out in the future.”
The broadband provider may be valued at about 6.4 billion euros ($8.6 billion) in an IPO including debt, or 8.5 times its 2012 earnings before interest, taxes, depreciation and amortization, said Francisco Salvador, a Madrid-based strategist at FGA/MG Valores.