Hey Euro Politicos – Don't Forget Cable!
FRANKFURT -- Ultra-Broadband Forum 2016 -- Across much of Europe, cable networks seem to be doing a much better job than telco technologies of satisfying demand for high-speed broadband services and meeting official targets, judging by figures presented at today's Ultra-Broadband Forum in Frankfurt.
Those numbers come from Matthias Kurth, who, as president of the European Cable Operators Association, obviously has a vested interest in championing cable over the alternatives. But they should be a wake-up call for the region's authorities nonetheless. "We have to bring this to the minds of politicians who think fiber everywhere is the only solution," an apparently exasperated Kurth told attendees during a morning presentation.
So what's all the fuss about? Well, for a start, the fastest services available in a given national market are often cable-based. Just look at Germany, Europe's biggest country, where Kabel Deutschland GmbH is offering a 400Mbit/s service to customers in some areas. Telco incumbent Deutsche Telekom AG (NYSE: DT), while operating across a wider area, cannot currently go above 100 Mbit/s with its copper-based broadband network -- vectoring-enabled though parts of it may be.
Indeed, while cable subscribers represent just 18% of all broadband customers in Europe, the proportion rises to 49% when factoring out services below 30 Mbit/s, according to Kurth. This looks extremely pertinent given a new European Commission target of ensuring all households in the region can access a 100Mbit/s service by 2025. "This is good news that cable is future proof," said Kurth. "Vectoring, G.fast and others are looking to catch up." (See Juncker's Broadband Plans Get Junk Rating.)
Another attraction of cable is that investments in broadband infrastructure tend to be highest in markets where cable operators are active. That's partly because cable operators have been investing about 20% of their revenues in capital expenditure, against an average among telco incumbents of around 16%. More importantly, heavy spending by cable operators is putting telcos under pressure and forcing them to respond. It was competition from Kable Deutschland and Germany's other cable operators that compelled Deutsche Telekom to embark on its current rollout of vectoring technology.
"Investment is lowest where cable is weakest," notes Kurth, identifying Greece and Italy -- which lack any cable networks -- as the most parsimonious of the major Western European markets.
The drawback, of course, is that cable is not as pervasive as copper. According to Kurth, cable networks currently serve about 119 million of Europe's 270 million homes, and 57% of those homes have taken up cable services. European authorities certainly won't be able to rely on cable technology to meet universal service obligations.
Cable could, however, be the best option for meeting other broadband goals and providing much higher-speed connectivity across what is often a big national footprint. Denmark's TDC A/S (Copenhagen: TDC), for instance, believes it can upgrade its entire cable network -- which covers about half the Danish population -- with gigabit-speed DOCSIS 3.1 technology while maintaining current investment levels. Earlier today, Carsten Bryder, the operator's chief technology officer, told attendees at the Ultra-Broadband Forum that TDC was effectively turning into a cable company. (See Denmark's TDC Is Becoming a CableCo, Says CTO.)
There is no need to get too religious about all of this, of course. But Kurth makes a good point that European regulators -- seemingly obsessed with fiber and 5G -- sometimes appear to have forgotten about the cable guys. "I don't want to stop any technology path that is possible," says Kurth, highlighting an array of broadband technologies. "It's a good story that we have different routes to gigabit."
— Iain Morris, , News Editor, Light Reading