Cable Revenue Hits €22.4B in Europe as Operators Upgrade

Cable operators are stepping up their game to meet growing competition, finds a new report produced by IHS Markit.

Competition from traditional and over-the-top (OTT) players is driving Europe's cable operators to respond with network upgrades and improved services, which have helped to increase overall revenues by 5.7% to €22.4 billion ($23.4 billion) in 2015 from €21.2 billion ($22.1 billion) in 2014.

According to the report from IHS Markit and trade association Cable Europe, challenges posed by other platforms saw many operators invest in infrastructure and significantly improve their offerings.

As an example, Maria Rua Aguete, research director at IHS Technology, pointed to Project Lightning, a huge broadband expansion programme in the UK that was unveiled by Virgin Media and Liberty Global in February 2015.

Project Lightning aims to connect an additional 4 million UK homes and businesses, extending Virgin Media's cable homes passed from 13 million today to 17 million by 2019. The total investment is expected to amount to around £3 billion ($3.7 billion).

Other cable operators across Europe are also in the process of upgrading broadband networks in order to be able to offer download speeds of up to 1Gbit/s.

Indeed, the recent ANGA COM event in Cologne, Germany indicated that DOCSIS 3.1 looks set to play a significant role in the development of a Gigabit Europe broadband market, with operators including Altice in France, VOO in Belgium, DNA in Finland and NetCologne in Germany all unveiling trials and deployments. (See A Look Back at ANGA: DOCSIS 3.1 Takes Europe.)

The report further found that Germany and the UK were the largest markets in terms of cable revenue, generating €4.7 billion and €4 billion respectively. Around half of the total revenue figure came from TV services, demonstrating the impact of new streaming offerings such as Netflix.

"Our research concluded that the integration of Netflix into pay TV is having a positive impact on cable operators' key performance indicators, generally benefitting their business while co-existing well with more traditional parts of the bundle," Rua Aguete said.

The research company also found that although the total number of cable TV subscribers in the European Union dropped further to 55.1 million at the end of 2015 compared to 55.7 million a year earlier, the take-up of digital services is on the rise with close to two-thirds of cable homes opting for digital TV by the end of 2015.

— Anne Morris, Associate Editor, UBB2020