The European cable industry is set to emerge from the ‘dark days’ of the previous two years, having learnt many valuable lessons, according to one of the conclusions of the European Cable Yearbook 2002 from Screen Digest.
The book describes the recent pace of change in the cable sector as ‘relentless’, forcing many companies to change their priorities. Consolidation has been put on hold, mainly whilst groups have tried to relieve their debt burden through financial restructure. NTL in the UK is just emerging from this process (see
NTL Seeks To Change Debt Facility), whilst its rival Telewest Communications is about to enter a restructuring phase (see
Telewest Reduces Losses Ahead Of Restructure). The two groups are expected to merge when this is complete.
Broadband booms, DTV disappoints Screen Digest says that it has been broadband internet access and not digital television which has proven to be the cable operators’ killer application, with demand and uptake both looking strong across the continent. Whilst demand for broadband internet services has been strong, the current penetration levels are still negligible in many countries.
The report also points to the development of IP telephony – telephone via the internet – as a second potential key driver for cable.
Overall subscriber growth throughout Europe was up by just 4% in 2001, illustrating the difficulties that cable operators have been experiencing. Germany led the way with 22.1 million subscribers at the end of 2001; the Netherlands came in second with 6.6 million, followed by Poland at 5.2 million. The UK ranked fifth, with a total of 3.6 million cable customers.
Digital cable television take-up has been less than inspiring in most countries. The UK led at year end 2002, with just under 2 million subs, followed by France at around 664,000. More recent figures, from the Independent Television Commission, show that growth in the UK has virtually stalled since the end of 2001, standing at barely 2.1 million by Q2 2002.
Television remains the mains source of revenue for cable operators, accounting for E7.7 billion in the European Union, E8.1 billion in western Europe and E863.7 million in central and eastern Europe. However, TV’s contribution is in decline, down from 82.9% of EU cable revenues in 2000 to 75.7% in 2001.
The report also shows that there were 62.7 million cable subscribers in the whole of Europe by the end of 2001. Cable internet accounted for 6% of revenues, telephony for 16.5% and there were 3.3 million digital TV subscribers across the continent.
