SUBSCRIBE TO TMCnet
TMCnet - World's Largest Communications and Technology Community
 
| More

 

June 19, 2012

European Cable Ops Rely on Broadband, Business Revenue for Growth
By Gary Kim
Contributing Editor

The latest Solon Survey of European cable operators illustrates a couple salient points about the North American and European cable business, namely that the industry has outgrown its moniker and has become a multiproduct business, whose growth now comes from broadband access, mobile services and business-to-business services.



The European cable operators surveyed expect revenue growth of over five percent per year until 2014 and further EBITDA margin expansion by two percentage points up to 48 percent, on average, to 2014.

 In large part, that is due to gains in broadband access revenue, which remains the main source of revenue growth for European cable operators, the report suggests. In fact, Solon attributes broadband access revenue for a rebound in operator average revenue per user, which had been dropping.

Revenue earned by offering or higher access speeds, at an average broadband access ARPU of approximately 20€ per month, is the primary reason ARPU now is stable, the Solon report indicates.

The average marketed bandwidth is expected to more than double through 2014, with nearly half of cable broadband subscribers taking services at 50 Mbps or higher by 2014. Still, Solon researchers believe the higher speeds will contribute more by reducing churn than by driving higher revenue.

On the other hand, European cable operators seem inclined to continue offering flat-rate pricing, rather than moving to usage-based billing, as is the current U.S. trend, which is to provide buckets of usage at varying levels.

The new trends, though, are in the areas of mobility services and services aimed at business customers, which in the 2009 survey were not firmly embraced by cable operators.

By 2011, sentiment had changed, with operators across Europe highlighting the importance ofboth segments in driving future revenue growth.

On average, cable operators expect to double the share of revenue generated through mobile offerings, while the revenue contribution from business and wholesale activities is forecast to increase by approximately 33 percent. For a business historically serving the consumer segment, the expansion of services to business and enterprise customers is significant.

By 2014, a typical European cable operator will be earning 12 percent of its revenue from business customers. Some cable operators, though, already earn more than 30 percent of total revenue from B2B services.


Edited by Brooke Neuman

 

comments powered by Disqus




Technology Marketing Corporation

800 Connecticut Ave, 1st Floor East, Norwalk, CT 06854 USA
Ph: 800-243-6002, 203-852-6800
Fx: 203-866-3326

General comments: tmc@tmcnet.com.
Comments about this site: webmaster@tmcnet.com.

STAY CURRENT YOUR WAY

© 2014 Technology Marketing Corporation. All rights reserved.