Although the CEE region barely got a mention at this year’s Cable Congress, it faces many of the same challenges as those in Western Europe.
Twelve months ago the European cable industry appeared to be in a state of denial, convinced – seemingly against all odds – that it would get through the recession relatively unscathed. While the fact that it did so in the end is a testament to its resilience, it is by no means out of the woods.
Indeed, the next year is likely to prove crucial for the industry, with the focus very much on consolidation and, quite probably, the gradual exit of private equity.
The gradual freeing up of capital since May last year has already helped Liberty Global make its biggest ever acquisition – Unity Media in Germany – and there are clear signs it will not stop there. In the CEE region, Multimedia Polska and Aster are possible targets in Poland and FiberNet in Hungary, though there are also others.
Cable certainly has to undergo consolidation, especially amongst the hundreds of smaller operators still present in most CEE countries, if it is to progress in what is an increasingly competitive marketplace. Liberty is in pole position to lead the process, having the confidence of capital markets – put simply, the company has a good track record of delivering profits to investors – and products such as ultra-fast, DOCSIS 3.0 internet access and on demand services that other cable operators are finding hard to match.
Liberty Global also has a healthy attitude to over-the-top online video providers. Unlike others in the cable industry, it does not see such companies as a threat and in fact welcomes the possibility of working with them.
On demand will undoubtedly become a key component of cable services in Europe, both East and West, in the near future. However, the likelihood of it eventually replacing linear channels, as was suggested by MTG’s CEO Hans Holger Albrecht, has to be questioned.
Certainly in CEE, that prospect still seems a million miles away.