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Collective revenues were up 5.5% in 2013 and cable broadband subs grew 8.4 percent – but is cable eating away at the telcos' market share?

Cable Operators Boast Euro Growth

Ray Le Maistre
3/5/2013
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LONDON – Cable Congress 2013 -- While many of Europe's incumbent telcos are struggling with shrinking sales and increasing competitive threats, the region's cable sector appears to be thriving. (See Europe's Telco Services Suffer Shrinkage.) In London this morning, executives from industry body Cable Europe presented the latest annual statistics, compiled by IHS Screen Digest, for the cable services sector across the European Union's 27 member countries (so not including Norway or Switzerland). Here are the highlights:

  • In 2012, European cable operator revenues grew by 5.5 percent year-on-year to €20.6 billion (US$26.8 billion), comprising €11.2 billion from TV/video services, €5.6 billion from Internet access service and €3.7 billion from cable telephony. That annual growth matches the bullish projections made for the sector last year. (See Europe's Cable Ops in Bullish Mood.)
  • Within that total, digital TV revenues grew by 12 percent, Internet access revenues by 6.5 percent and cable telephony by 5.3 percent.
  • Video-on-demand services generated revenues of €342 million ($446 million), up by 24 percent compared with 2011.
  • The total number of revenue generating units (RGUs) increased by 3 percent to 106.5 million, with the gains coming from broadband and telephony subscriptions.
  • The number of digital TV subscribers grew by 9.2 percent to 30.5 million: 2012 was the first year in which there were more digital than analog TV subscribers in the EU 27 countries. However, the total number of customers taking their TV services from cable operators is in decline (exact numbers not provided), as some former analog cable TV customers turn to other modes of pay-TV service (satellite, IPTV).
  • Cable broadband subscriber numbers grew by 8.4 percent to more than 27 million (though there is no breakout to show how many of these have Docsis 3.0 connections). According to Cable Europe, the average cable broadband speed experienced by end users in Europe is 32 Mbit/s, an impressive figure. Growth is a good thing, obviously, but is cable broadband gaining market share in Europe? According to the team at IHS Screen Digest it is. In the EU 27 countries, cable grew its share of the total broadband market from 18.54 percent at the end of 2011 to 19.34 percent share at the end of 2012. And while DSL still dominates, accounting for 74.26 percent of the total broadband connections in the EU 27 member countries at the end of last year, that market is reaching saturation and grew by just 2.22 percent year-on-year in 2012. Cable broadband "is growing at a faster rate than DSL," confirms the IHS Screen Digest team. "The investments of the past 10 years are paying off," said the sector chief cheerleader, Cable Europe President Manuel Kohnstamm. (His day job is as chief policy officer at Liberty Global Inc., but he declined to comment on the upcoming acquisition by Liberty of Virgin Media Inc. -- see Liberty Makes $23.3B Play for Virgin Media.) Kohnstamm does have a point: Europe's cable operators have been investing heavily in their networks in recent years, upgrading to Docsis 3.0 and enhancing multimedia service capabilities as the region's telcos dithered over fiber broadband investments. (See Euro FTTH Set for Growth Spurt.) Now there are new challenges, not only as the telcos start to increase their fiber and VDSL2 investments but as the over-the-top (OTT) players challenge for TV/video viewing time and mobile operators spy opportunities to offer richer services packages over 4G. Kohnstamm notes that the European cable sector is increasingly focused on delivering the access (including Wi-Fi), content, services and new applications that users demand on multiple platforms. — Ray Le Maistre, International Managing Editor, Light Reading

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