For the latest full year for which statistics are available (2017), cable was found to pass more than half of European homes. The total number of connected homes reached 69.2 million, with revenues from cable services rising to €25.9 billion, up 2% from the previous year. Overall, Europe’s top 10 cableco’s accounted for 60% of all cable connections.
In terms of how that revenue was split between different services, TV services accounted for 46% of the total, broadband internet for 35% and telephony for 19%. In terms of growth, internet was the best performing category, with revenues increasing by 4% to €9 billion.
While TV has always been the core of cable services, internet is viewed as a vital strategic area for growth. DSL and VDSL are still by far and away the most common means for people in the EU to go online, accounting for 64.1% of the total 172m broadband customers. But one in five (19.4%) EU broadband customers use cable services to get online, making it the second most popular category, ahead of FTTH/FTTB with 16.4% of customers.
One of the unique things about the European cable sector is how it has converged with the telecommunications industry, particularly mobile operators. This is a process that has been going on since the early years of the current decade. For example,
British mobile operator Vodafone bought Kabel Deutschland, Germany’s largest cable television firm, in 2013, and French operator Numericable made a similar move for SFR in 2014, with both then becoming part of the larger Altice Europe operation.
There was then another flurry of M&A activity between cable cos and mobile firms starting in 2017, when T-Mobile Austria acquired UPC Austria, Telenet purchased SFR Belux and Euskaltel bought Telecable. Biggest of all, however, has been Vodafone’s recent €18.4 billion deal to buy Liberty Global’s operations in Germany, Hungary, Romania and the Czech Republic.
Several factors explain why Europe’s mobile and cable sectors have converged the way they have. One is the mutual benefits for all parties bundling together media and telco services into so-called quad-play and multi-play offers. The combination of broadband, mobile, TV and telephone services in one package delivers value and convenience to customers and businesses and provides operators with the option of cross-selling services for additional revenues.
For mobile operators, there is an added incentive to owning a broadband-capable fixed wire network. That is providing the backhaul to handle the increasing volumes of data being generated by smartphones and other mobile devices. A cable broadband network already provides mobile companies with significant advantages in terms of data transmission in the 4G era. And that is only going to increase with 5G - dependent, first, on cable technology completing the next step in its evolution.