enabling environment for sustainable growth and development of … · 2018-01-25 · representing...

Representing broadband cable operators in Europe

Enabling environment for sustainable growth and development of cable and broadband infrastructuresMatthias Kurth

Geneva – 25 January 2018


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


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


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)


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


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


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


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


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%


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


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


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


Cable HouseAvenue des Arts 411040 Brussels Belgium

Phone: +32 2 521 17 63Email: [email protected] Web: www.cable-europe.eu

enabling environment for sustainable growth and development of … · 2018-01-25 · representing...

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