Liberty Global Canvassing Europe With Docsis 3.0

With an eye toward downstream burst speeds of 100 Mbit/s or more, Liberty Global Inc. (Nasdaq: LBTY) says it's on pace to reach about 80 percent of its European footprint with Docsis 3.0 by the end of 2010.

Liberty Global president and CEO Mike Fries said on the company's second-quarter earnings call this week that the introduction of Docsis 3.0 and "Fiber Power" bundles are contributing to solid top-line broadband growth. Liberty Global notched 152,000 broadband net adds in the quarter, up 60 percent from the year earlier, and representing a second-quarter record. Fries also attributed that to high demand in Germany, where Liberty is poised to become major force thanks to its recent deal for Unitymedia GmbH . (See Liberty Global Posts Q2 and Liberty Splashes $5.2B on German Operator.)

He said the most marked broadband improvement was in the Netherlands, where it added 85,000 new revenue generating units (RGUs), versus a loss of 27,000 RGUs last year, attributing it to the launch of Docsis 3.0 and new service bundles.

Fries said the addition of wideband and the new Fiber Power bundles are having a "halo effect" on its voice service, which added 126,000 net adds in the second quarter, up 27 percent.

Docsis 3.0 has rapidly become a centerpiece of the Liberty Global strategy, particularly in Europe, as it takes on regional DSL and fiber-to-the-home competition. And the results are showing that it's getting a nice bang for the buck. At a Light Reading Cable/Heavy Reading event in March, Liberty Global VP of strategic technology Timothy Burke said the company is spending on average about $20 per home passed on the network piece of the wideband buildout. (See Liberty Exec Details D3's 'Sweet' Economics.)

Gateway to video glory?
Although Liberty Global posted solid broadband and voice gains in the quarter, the story wasn't nearly as sweet on the video front, as the company lost 108,000 subs, ending the period with 9.2 million video customers.

But the operator hopes to reinvigorate that part of the business with the aid of a major IP-fueled video gateway project that's underway with several vendors, including Intel Corp. (Nasdaq: INTC), NDS Ltd. , Samsung Electronics Co. Ltd. (Korea: SEC), and Nagravision SA . Among that group, NDS is basing the middleware layer and navigation system on Adobe Systems Inc. (Nasdaq: ADBE) Flash. (See Liberty Global Reveals IP Gateway Partners.)

Fries called the multimedia home gateway initiative "one of the most important projects we're undertaking," adding that other European and US operators are showing interest in what Liberty Global's undertaking.

However, other European MSOs, including Virgin Media Inc. (Nasdaq: VMED) of the UK and ONO in Spain, are clearly taking a much different direction, instead pursuing next-gen box platforms that are powered by TiVo Inc. (Nasdaq: TIVO) software. (See TiVo Hopes to Reign in Spain and Virgin Presses 'Play' on TiVo.)

Fries said Liberty gave TiVo a close look, but viewed that as "taking one quarter of a step... This [gateway project] is a full step, maybe two steps. This is about... putting a device in the home that has all the bells and whistles that your PC has today," he added, noting that the end product will sport a multiple WiFi chips, six tuners, and the ability to communicate with iPads and other IP-connected devices.

On the software end, Liberty Global will outfit the gateway with a new user interface that integrates video with widgets and other apps, as well as a recommendation engine and other search functions. As networking and device discovery goes, those boxes are also expected to support Multimedia over Coax Alliance (MoCA) and Digital Living Network Alliance (DLNA) .

"So, this is a step change... for our industry. This isn't your father's cable set-top box. This is your ten-year-old's set-top box," the Liberty Global chief said, no doubt planting images of a vintage Oldsmobile commercial into the minds of some.

Liberty Global intends to start deploying its multimedia gateway in Europe by the first half of 2011.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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