Germany and the UK were the largest markets in terms of revenue, generating €4.7 billion and €4 billion respectively. The €10.5 billion taken by TV accounts for almost half of total cable revenues; the remainder is split between internet and telephony services.
“In response to challenges posed by other platforms, 2015 saw a determined effort by many operators to invest in infrastructure and significantly improve their offerings,” said the report’s author, Maria Rua Aguete, research director at IHS Technology. “Perhaps the most ambitious was Project Lightning, a huge broadband expansion programme undertaken by Virgin Media in the UK.”
Funded by a £3 billion investment, Project Lightning aims to connect an additional four million UK homes and businesses, extending Virgin Media’s cable homes passed from 13 million today to 17 million by 2019.
The report says the provision of high speed internet services will help support the introduction of new subscription video on demand and Ultra HD services.
“Liberty Global’s pan-operational deal with Netflix in 2016 shows a level of collaboration between cable and SVoD,” Rua Aguete said. “Our research concluded that the integration of Netflix into pay TV is having a positive impact on cable operators’ key performance indicators, generally benefitting their business while co-existing well with more traditional parts of the bundle.”
Although the total number of cable TV subscribers in the European Union continued to fall – the total at end of 2015 was 55.1 million, down from 55.7 million a year earlier – the take-up of digital services was on the rise. By the end of 2015, close to two-thirds of cable homes opted for digital TV.
In 2015, internet revenue continued to grow, with cable internet revenue totalling €7.2 billion, 9.7 percent higher than a year earlier. The UK led the way with €1.5 billion, followed by Germany (€1.1 billion) and Spain (€0.8billion). The majority of European markets saw growth in internet revenue, though two Central and East European markets (Poland and Romania) saw slight declines in comparison to 2014.
Mergers and acquisitions continued to feature high on the cable agenda during 2015. In Germany, the third-largest cable operator Tele Columbus entered into an agreement to buy Primacom, in France, Altice gained complete control of Numericable-SFR, and Spain saw several important deals. Euskaltel, bought the Galicia-based operator R for €1.2 billion, while UK investment group Zegona bought Telecable for €640 million.
Rua Aguete said she anticipated further consolidation within the cable sector, which remains fragmented when compared to competing platforms.