Representing broadband cable operators in Europe
Enabling environment for sustainable growth and development of cable and broadband infrastructuresMatthias Kurth
Geneva – 25 January 2018
Representing broadband cable operators in Europe
Cable operators reach more than half of European households and constitute a major actor in the European digital landscape
Source: Arthur D. Little analysis, European Commission Digital Agenda, IHS, cable companies websites & annual reports, press releases, Screendigest 2011, WiK, Credit Suisse, jcta.
87%
61%
38%
79%
86%76%
48%
96%
99%
57%
66%
80%
60%55%
69%
87%41%
94%
53%
56%
100%
55%54%
80%63%54%
0%
0%
% of homes passed by cable per country
80-100%60-80%40-60%20-40%0-20%n.d.
Overview of the Cable companies place in the EU digital landscape- 2014, EU 28 -
31%
n 26 markets in Europe with 119 M homes passed – 54% of EU28 homes (63% when excluding Italy and Greece)
n 56 M subscribers accessing TV via cable
n 32 M subscribers connected to internet via cable
n Total revenues exceeding€ 21 bn
Representing broadband cable operators in Europe
Cable is a major actor in its footprint with 57% of the consumers adopting cable for at least one cable service
57%
43%
Cable
Other
119
Penetration of cable in its footprint- 2014, EU 28 -
Penetration of cable in its footprint
119 M homes passed
68 M unique cable subscribers
% of homes passed
Source: Arthur D. Little analysis, European Commission Digital Agenda, IHS, cable companies websites & annual reports, press releases, Screendigest 2011, WiK, Credit Suisse, jcta
Representing broadband cable operators in Europe
Cable is currently the largest provider of Next Generation Access (NGA) despite its lower share in broadband subscriptions
70%
25%
18%
49%
8%25%
Other
DSL (VDSL)
100%
Cable (Docsis 3.0)
FTTP - Fiber To The Property1
Share of NGA subscriptionsShare of BB subscriptions
Broadband subscription and NGA penetration by technology - 2014, EU 28 -
% of broadband and NGA subscriptions (NGA; ≥30 Mbps)
Source: Arthur D. Little analysis, European Commission Digital Agenda. 1. Includes Fiber To The Home (FTTH) and Fiber To The Building (FTTB)
Representing broadband cable operators in Europe
Cable is the technology most able to connect a large base of the population with next-generation very high speed access in Europe
NGA coverage by technology- 2014, EU 28 -
11689
45
NGA coverage (Homes Passed)
FTTPvDSLCable
217
119
Cable Homes Passed
Total EU Households
n 98% of the cable network is upgraded with DOCSIS 3.0
n 71% of European homes are passed by at least one NGA
n Compared to other technologies, Cable has the highest coverage of Next Generation Access (NGA; ≥30 Mbps) in Europe– 53% of EU 28 households
passed by cable NGA (63% when excluding Italy & Greece)
– 41% for VDSL– 21% for Fiber To The Property
(including FTTH and FTTB)
41%
21%
55%
53%
Source: Arthur D. Little analysis, European Commission Digital Agenda, IHS, cable companies websites & annual reports, press releases, Screendigest 2011, WiK, Credit Suisse, jcta
M or % of home passed
Representing broadband cable operators in Europe
Gigabit broadband
Cable operators are at the forefront of high-speed access and keep investing in a future-proof technology, which will progressively deliver performance expected from FTTH and 5G
G.fastCopperMobileCable
Broadband access technology roadmap (actual downstream speed range)
Source: Arthur D. Little analysis, Alcatel, Cablelabs
Actualdownstreamspeedrange(mbps)
Fiber
Yearoffirstdeployments1995 2000 2005 2010 2015 2020
200
70
10000
60
800
4030
1020
1000
50
100
0
8090 VDSL2 - Vect.
VDSL2
VDSL
G.fast
ADSL2ADSL
5G
LTE-A
LTE
HSPA+HSPAEdgeGPRS
DOCSIS3.1
DOCSIS 3.0 16ch
DOCSIS 3.0 4ch
DOCSIS3.0
DOCSIS2.0
UMTS
FTTH
DOCSIS1.0
Representing broadband cable operators in Europe
30%
25%
20%
15%
10%
5%
0%
CEE
1C
EE 2
CEE
3C
EE 4
CEE
5W
E 1
WE
2W
E 3
CEE
6W
E 4
WE
5W
E 6
WE
7W
E 9
WE
8W
E 10
WE
11W
E 12
WE
13
Cable operators have been continuously investing in their networks over the last 5 years and will continue to do so: CableCos have higher capex/sales ratio than other operators
Source: Arthur D. Little analysis, Ovum, Credit Suisse, Bank of America, Broker reports, Annual reports, New Street Research. 1. Computed by taking weighted average capex and sales figures
Capex to sales by operator type (evolution and split by country)- 2010 - 2014, EU 28 -
European average
CEE
6C
EE 7
WE
2
WE
11W
E 12
WE
13W
E 14
CEE
8
CEE
5W
E 9
WE
10
CEE
4
WE
6
CEE
1W
E 1
CEE
2
WE
3
WE
7
WE
5
CEE
3
WE
4
WE
8
WE
1W
E 2
CEE
1W
E 3
CEE
2C
EE 3
WE
4C
EE 5
WE
5C
EE 4
WE
6W
E 7
WE
8W
E 9
WE
10W
E 1
1W
E 12
WE
13W
E 142010 2011 2012 2013 2014
0%
5%
30%
10%
25%
20%
15%
Cable Incumbent Altnet
Av. 20,4%
Av. 16,0%
Av. 15,8%
Fixed capex to sales1 in %, by operator type Fixed capex to sales in %, 2010-2014 average of main EU operators, by operator type
Cable
Altnet
Incumbent
Representing broadband cable operators in Europe
Cable operators fuel infrastructure-based competition and play a key role in the competitive dynamics of EU digital markets (1/2): CableCos push incumbents to deploy NGA technology
Source: Arthur D. Little analysis, European Commission - Study on broadband coverage in Europe in 2014. Note: The VDSL/FTTP coverage per country is that of the technology (VDSL or FTTP) that has the highest coverage
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
10%
50%
40%
30%
20%
0%
60%
100%
90%
80%
70%GB
SE
ES
SISK
RO
PT
PL
NL
MTLU
LT
LV
IT
IE
HU
EL DE
Cable coverage
EU 28
FI
EE DK
CZ
FR
HR
BG
BE
AT
CY
Correlation between Cable coverage and VDSL / FTTP coverage - 2014, EU 28 -
FTTPVDSL
For each 10% increase in cable coverage, there is a 6% increase in NGA incumbent coverage
Technology coverage in %, by country
Highest coverage of VDSL or FTTP
Representing broadband cable operators in Europe
In cable markets, operators broadband retail prices have been decreasing by 29% over the 2011-2015 period
Source: Arthur D. Little analysis, European Commission Digital Agenda using Van Dijk data. 1. Correspond to the minimum price between similar offers from incumbent, cable and alternative network operators, corrected using Purchasing Power Parities (PPPs). 2. Cable market include countries with over 60% of cable coverage: Malta, Netherlands, Belgium, Luxembourg, Romania, Finland, Lithuania, Portugal, Hungary, Denmark, Germany, Estonia, Ireland, Austria, Spain, Sweden, whenever corresponding offers were found on the national market
140
120
100
80
60
40
Index
20152014201320122011
Evolution of broadband retail price1
- 2011 - 2015, EU 28 splited by cable and non cable market2 -
Triple play - Non cable marketsTriple play - Cable Markets
Single play - Non cable marketsSingle play - Cable Markets
Index of average broadband prices, 2011 = 100, cable market includes countries with cable coverage >60%
30-100 mbpsdownload speed
Δ cable 1P = -41%Δ cable 3P = -21%
Representing broadband cable operators in Europe
Policy and regulatory environment plays a key role for cable TV and Broadband
Investment per Household in the Electronic Communications Sector in the U.S. and Europe, 2010 - 2015
Source: Christopher S. Yoo, University of Pennsylvania
2.2X3.1X
$/HH
n The favorable regulation in the US has enhanced more investment on Cable and Broadband
n Recent changes by the FCC on the Net Neutrality order go in the same direction
Representing broadband cable operators in Europe
European commission launched a massive revision of the regulatory framework to foster private investment in cable and broadband infrastructures to reach a gigabit societyOngoing regulatory legislative processes
The Digital Single Market strategy has delivered the main legislative proposals
specifically in the topics of:
telecoms review
e-commerce
copyright
audiovisual and media services
ePrivacy + GDPR (enforceable May 2018)
harmonisation of digital rights
Representing broadband cable operators in Europe
The present discussion still has controversial topics:
Joint dominance, duopolies - are two networks enough to enable a competitive market landscape?
Symmetric regulation – Increase it will endanger investment to modernize infrastructure based competition
Less access regulation on Very High Capacity (VHC) networks and shift to co-investment of 2 or more
private investors
Easy and innovative copyright rules that follow technology evolution (cross border access to content,
portability of content, time-shift tv services, catch-up tv, etc.)
Level playing field with OTT in data protection and privacy rules
State Aid has to be limited to white areas (extreme rural) and not finance overbuild of private infrastructures
1
2
3
4
6
5
Representing broadband cable operators in Europe
Cable HouseAvenue des Arts 411040 Brussels Belgium
Phone: +32 2 521 17 63Email: [email protected] Web: www.cable-europe.eu