Archive for the ‘Industry News’ Category

The Expert View: Vodafone Interest Says Cable Got It Right

Technology is increasingly about mobility and choice, but there is a balance to be met

Guy BissonBy Guy Bisson, Research Director, Television at IHS Electronics & Media

Now there is a new word for people who break off from a social interaction to answer a mobile phone or browse social media: Phubber, meaning mobile snubber. Vodafone has built a £46bn a year business on the back of mobile telephony. With the rise of tablets, national Wi-Fi networks, Apps, 4G auctions and Cloud access, its services are at the cutting edge of the emerging media consumption trend. Why, then, is Vodafone bidding for a major cable operator in Germany where analogue TV still reigns and uptake of broadband and telephony among its customer base remains low? If the future is on-demand, on the go, what exactly does Vodafone see in this wired asset?

Much has been made of the cost savings Vodafone will make by using Kabel Deutschland’s fixed line infrastructure instead of leasing capacity from Deutsche Telekom, but do the touted savings of €200m a year justify on their own the €7.7bn deal, or is there something else to this transaction?

pie chart for guy bissons postOne thing is clear. Vodafone’s interest in cable is a vote of confidence in the cable business model. And more than that, it is a vote of confidence in the way that cable has positioned for the future of entertainment. A future at which television remains centre stage, but in which broadband (and increasingly mobile) take near equal billing.

Let’s take a step back. We all know people who seem to spend their lives glued to a mobile device. People who would rather walk into a lamp-post than lift their gaze from the mobile screen. But the average European spends nearly four hours of every day watching a much larger screen: the television. Video entertainment in the home is by far the biggest segment of consumer entertainment spend. IHS figures show that paid multichannel TV accounts for 64 per cent of Western Europe’s €52.5bn consumer-level spend on screen entertainment. Further, the average revenue generated by a TV customer in Europe has grown almost continually year-on-year, something that is astounding, indeed puzzling, to a pure-play telecoms company used to increasing commoditisation in fixed line.

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Kurth: European cable supports private investment

The cable industry is ideal for private investment and this should be encouraged by a good regulatory strategy, according to Matthias Kurth, executive chairman and member of the executive committee at Cable Europe.

matthias kurth
Speaking at the opening panel discussion of PIKE 2013, discussing the European Digital Agenda Digital Dividend, Kurth added that although the cable industry has made a huge contribution to bringing broadband to Europe, a different situation existed in each of the 28 EU markets.

Some, such as Benelux and Denmark, could be described as perfect, while others, including Greece and Italy, did not even have any cable infrastructure.

Commenting on white spots and the potential future build programmes for cable networks, he said that while it would be possible for cable networks to widen their coverage, a technically neutral solution was required.

He cited an interesting example in Germany, where providers of LTE services have been required to provide coverage in rural areas before they reach urban parts of the country.

Jerzy Straszewski, the president of the Polish Chamber of Electronic Communications (PIKE), meanwhile said that Polish cable operators have undertaken most investment from their own funds, typically allocating 30% of revenues.

Of 4.5 million cable subscribers in the country, 50% had access to broadband services, with download speeds of 30 Mbps and above now the norm.

Read more on the Broadband TV News website.

Cable Congress 2013: Cable is the Place to Be

Clearly, the cable industry has become the place to go if you want an easy life. At least, that’s the impression one could get from listening to Liberty Global CEO Mike Fries at this year’s Cable Congress, and from the news that Deutsche Telekom CEO Rene Obermann is set to join Dutch cable player Ziggo when he steps down from his current role at the end of the year.

It may be a facile comparison, but contrast Fries with his counterparts at Telefonica and Vodafone, based on comments they made at Mobile World Congress at the end of February: Telefonica’s Cesar Alierta took OTT players to task for not investing in the value chain, while Vodafone CEO Vittorio Colao has long expressed frustration at the level of regulation imposed on telco players in Europe.

Fries, on the other hand, noted that the cable industry is not suffering from these problems, and indeed that they have a good relationship with regulators at the EU level (though national regulators remain a little less enamored of the cable industry, particularly as regards consolidation). More tellingly, after having talked about what a great position the cable industry finds itself in, he said that the next ten years will “present issues we’ve never encountered”. Imagine Alierta or Colao saying that, and sounding like they relish the prospect?

Clearly, Colao has thought of all this, which may have something to do with Vodafone’s German operation looking at buying the country’s top cable player, Kabel Deutschland. This potential merger also highlights another point Fries made at Cable Congress, namely, the growing importance of quad-play.

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Cable operators look to wireless access as next frontier

Wireless access is now emerging as the next frontier for cable operators, and operators want to tap demand from their customers for pervasive high-performance connectivity, Cable Congress attendees heard.

image“We would like to create a step change in connectivity in the same way we did with fixed broadband,” said Kevin Baughan, Director, Metro Wireless, Virgin Media Business, who was responsible for the company’s recent deployment of WiFi on the London Underground, speaking on a panel session on WiFi at Cable Congress.

Virgin Media is working with mobile operators to deploy small cell networks and WiFi networks, said Baughan. The company has put together a hosting service to work in partnership with cities to deliver small cells that can be used for mobile backhaul, which Virgin media already provides from a smaller number of access points, in addition to WiFi.

The company has also won concessions from Leeds and Bradford to deliver WiFi networks across both cities.”It’s a business model based on the success of small cells,” said Baughan. The WiFi networks Virgin Media is building are powerful enough to give coverage inside buildings as well as in outdoor areas, which was important, he said. The Leeds and Bradford WiFi networks are branded by the local city authorities and operated by Virgin Media.

Baughan said Virgin Media had not yet taken a decision to go down the FON-type approach of partitioning its own subscribers’ cable modems using second SSIDs to deliver wider WiFi coverage. He said that the company had made sure its modems were capable of supporting this type of deployment, but had not yet taken a decision on this.

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Video: Cable Congress 2013 – Andrew Barron, Virgin Media #CC2013

Andrew Barron, COO of Virgin Media talks about consolidation and regulation, and mobile convergence in the UK market at Cable Congress 2013.

Cable growing faster than satellite, says IHS Screen Digest #CC2013

Cable is growing revenue faster than satellite competiton, according to IHS Screen Digest.

Looking at the triple-play bundle taken together, cable’s success in marketing telecom and internet services, which now accounts for the majority of cable revenue in 10 EU markets, has led it to outpacing satellite TV companies in terms of overall revenue growth, IHS Screen Digest TV research director Guy Bisson told Cable Congress attendees this morning.

Growth over the last five years has come from eastern Europe and some western European markets such the Benelux countries, said Bisson. Over the next five years, Germany will continue to grow strongly and eastern European growth will accelerate. The Nordic countries are expected to grow strongly, with others including the Benelux turning in moderate growth.

Growth will come from digitisation, said Bisson. Digital penetration across the EU 27 countries is growing and will give cable ongoing growth even if it does nothing else, he said. However, this growth will be accelerated by converting more single-play customers into telecom and internet customers as well as TV subscribers.

Bisson said cable operators also had the opportunity to embrace new lines of business, including CDN services and delivery of services from the cloud to devices outside the home.

Video: Liberty Global to move forwards with mobile plans #CC2013

Mike friesLiberty Global’s plan to roll out a more advanced mobile product in many markets in Europe later this year will allow it to meet demand from a number of its customers for a single bundle from one provider, according to Mike Fries, president and CEO of Liberty Global.

“It’s really a complementary product to our core fixed products and allows us to satisfy certain of our consumers’ needs who want a bundled product…from one provider,” he told DTVE in a video interview at Cable Congress last week.

“We’ve had great success in Belgium and Chile [with mobile] and have a million mobile customers today and Virgin Media has three million mobile customers. Together we’ve got a strong experience base to inch our way into the mobile business cost-effectively and productively and give those consumers who want it a broader experience than us.”

Addressing questions about the rationale for Liberty Global’s acquisition of Virgin Media, Fries said there were both revenue and cost synergies between Liberty Global and Virgin Media, as both buy equipment and content from the same companies.

“We’re in the same business, so I think the synergies are potentially large, and the revenue synergies are large too because they can learn from us and we can learn from them,” said Fries. “We’re in the business of building scale and being more efficient with our balance sheet. There are lots of opportunities there. There are benefits of being bigger, including dealing with regulators,” he said.

He said Liberty Global could benefit from Virgin Media’s experience in business-to-business services and from its wireless experience.

DOCSIS 3.1: The Countdown Begins…

CABLE CONGRESS 2013 – LONDON. Although talk about DOCSIS 3.1 began only late last year, circumstances will require initial deployments to be made as soon as 2015/16.

According to Ralph Brown, CTO Cablelabs, 1 Gbps downstream premium offers are likely to be available in the US as soon as 2016 and “we would be foolish not to start DOCSIS 3.1 before then.”

He added that the roadmap now envisages specs being issued this year and the first products coming onto the market in 2014 ahead of initial deployments in the following one to two years.

John Chapman, CTO CABU, Cisco Systems, meanwhile said that the specs are currently being developed by experts from Canada, Germany, the UK, France, Israel and US, meeting regularly in Denver.

He emphasised that DOCSIS was developed by the cable industry and 3.1 “can be anything we need it to be.”

3.1 will indeed be able to spectrum share with 3.0, allowing for the blending of new and existing services.

A lot of existing 3.0 software will still be used for 3.1 and only necessary changes will be made, with 3.1 being able to compete effectively with FTTH.

Once up and running, DOCSIS 3.1 will allow for downloads and uploads of up to 10 Gbps and 1 Gbps respectively.

By Chris Dziadul, Broadband TV News – Cable Congress Official Online Partner

“Developing Ireland’s Digital Economy is a priority for jobs growth” – An Taoiseach

DUBLIN 8.45 AM – 21ST February, 2013 – “Digital technology developments have the power to contribute strongly to economic recovery and new employment opportunities for Ireland,” said An Taoiseach, Enda Kenny T.D., addressing a UPC Ireland discussion forum on Jobs, The Economy and Ireland’s Digital Future.

Hosted by UPC Ireland CEO, Dana Strong, this morning’s discussion forum follows from the recent independent report commissioned by UPC on Ireland’s Digital Future, researched and written by Gerard O’Neill, Chairman of Amárach Research.

An Taoiseach, Enda Kenny T.D. said:
“The digital economy has a major role to play in our country’s economic recovery, with Ireland on its way to becoming the digital capital of Europe.   We welcome the arrival of global digital brands into Ireland and the contribution they make to our economy and society.  The ongoing challenge for Government is to prevent a two-tier digital economy from developing and to ensure that Irish small and medium sized businesses are encouraged to embrace the opportunities new digital technologies can offer.

“I want to see all Irish businesses live up to their potential and have the ability to compete globally.  For the Government’s part, we will work to create a supportive and flexible enterprise environment so that Ireland’s digital economy can continue to go from strength to strength.”

The UPC Report on Ireland’s Digital Future projects a doubling in the Irish internet economy to €11.3 billion annually by 2016 if current trends are maintained.   This will be underpinned by 2.6m Irish online shoppers spending €5.7 Bn (7% of all consumer spending) in 2016, compared to €3.7 Bn in 2012.

While the internet economy currently accounts for roughly 3% of Irish GDP, this is set to double to 6% over the next three years.

Using the Booz & Company Digitisation Index, the report estimates that this can translate into employment of 18,000 or more if Irish society and industry can keep pace with the digitisation levels of our EU neighbours and particularly our UK and Scandinavian counterparts.

UPC Ireland CEO, Dana Strong said:
“The prize from greater digital uptake will be obtained for Ireland if we can use Irish based innovation, entrepreneurship and productivity to create enhanced revenues and jobs for industry and particularly for small and medium businesses with export potential”.

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Cisco clarifies STB commitment

By Colin Mann, Advanced Television

Cisco executives have taken steps to clarify the company’s commitment to its set-top box business in the wake of comments made in an analyst call by Chairman and CEO John Chambers that that it was “walking away” from low-margin STB business.

Writing in a Cisco blog posted by Senior Vice President and General Manager Service Provider Video Technology, Jesper Andersen, his colleague Joe Chow, Vice President and General Manager, Connected Devices Business Unit, reveals that the company received questions about its commitment to certain elements of its set-top box business. “Comments were made that Cisco is walking away from low-margin deals. I would like to clear up any confusion surrounding those comments here,” he says.

In Chow’s words: “Cisco remains committed to providing world-class managed customer premise equipment (CPE), which includes digital set-tops, intelligent media gateways and other devices. CPE is an integral part of Cisco’s end-to-end Videoscape TV services delivery platform. For emerging markets, CPE enables Cisco to offer a complete end-to-end solution for new customers as they launch and grow their digital platforms. For customers with more advanced video platforms and in more advanced video markets, CPE provides a key strategic advantage and opportunity for Cisco.”

Chow notes that as service providers transition from traditional video architectures where intelligence resides in end-point devices to new architectures with intelligence migrating to the cloud and network, set-top solutions are also evolving. “Traditional video set-tops are transforming into intelligent video and data gateways with more advanced software features and services. These new unified gateways deliver video and other services to basic set-top boxes or consumer purchased end-point devices such as tablets or televisions. This architecture enables service providers to extend their network deeper into consumers’ homes, providing a more synchronised and immersive experience for their consumers,” he suggests.

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