This Research Brief updates our original Ziggo IPO preview of 19 October 2010. According to market rumours, the IPO could take place as early as March 2012, although Ziggo will not comment. Operationally, Ziggo's performance is characterised by a slow decline in customer numbers alongside an accelerated move to digital TV and record growth on the broadband market. Revenue growth is slowing somewhat, but still high, and Ziggo is managing to reduce costs, except those that are success-based. Net debt has come down to 3.87x annual EBITDA. Compared to our original IPO report, Ziggo's performance has improved, both operationally and financially. Going forward, the analogue switch-off can be expected within a few years. However, there are major challenges ahead, such as FTTH, rising capex, over-the-top services and building a mobile network. For a possible valuation, we looked at Telenet as Ziggo's most relevant peer. Based on this, the enterprise value could be roughly EUR 8 billion, versus our earlier estimate of EUR 7.3 billion.
