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UPDATE 1-Dutch cable group Ziggo cuts profit outlook
July 18, 2013 / 6:51 AM / 4 years ago

UPDATE 1-Dutch cable group Ziggo cuts profit outlook

* Q2 core profit 221 mln euros vs 226 mln expected

* Expects revenues to grow 1 pct in 2013, flat core profit

BRUSSELS, July 18 (Reuters) - Dutch cable group Ziggo on Thursday cut its profit outlook for 2013 because of plans to fend off competition with attractive deals for customers and also invest in a new wireless internet product.

Ziggo said lots of customers were switching providers in the Dutch market, especially those on lower paying contracts, which the company aimed to address with new loyalty campaigns.

Telfort, the low-cost banner of Dutch telecoms group KPN , was the most aggressive player in the market, Chief Executive Bernard Dijkhuizen told a conference call.

“Telfort has decreased its prices exactly on the spot where competition is the toughest,” said Dijkhuizen, who will be replaced by former Deutsche Telekom boss Rene Obermann in 2014.

Ziggo now expects revenues in 2013 to grow by 1 percent, with core profit (EBITDA) remaining at last year’s levels.

In April, the group said core profit would increase by between 2.5 and 3.5 percent with revenue growth at the lower end of this range.

The group, in which U.S. cable investor Liberty Global has a 15 percent stake, also said it would equip home modems with wireless access points to be used by other customers in the neighbourhood and start a new mobile service with Vodafone’s network in the second half of 2013.

The company’s core profit, adjusted for one-off items, rose 0.8 percent in the second quarter to 221 million euros ($289.37 million) below the 226 million euros expected in a Reuters poll of seven analysts.

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