April 2, 2009

Cable Show: European Cable Wages Speed War

While U.S. cable operators focus on the broadband stimulus package and online video issues, European cable operators have different concerns.

At a Cable Europe breakfast today, Manuel Kohnstamm, managing director, public policy and communications, for Liberty Global Europe, said European cable operators are engaged in a race to provide the fastest Internet speeds.

"Up until two years ago, there was a price war going on," said Kohnstamm. "The level of broadband competition is higher than it is in the United States. Those price wars have generally come to an end, and now we're moving to the speed wars."

Kohnstamm said European cable companies are delivering Internet speeds of 50-120 Mbps and looking forward to deploying DOCSIS 3.0 by the end of 2009. (For more on DOCSIS 3.0, click here.)

"A lot of our customers may not need those speeds," he said. "It's way more than anybody uses today, but it's a game changer."

Kohnstamm said large entrenched telcos provide stiff competition to cable in the Internet and telephony sectors, but telco has been reluctant to invest further than DSL, which will not be able to grow beyond 15-20 Mbps.

Broadband penetration in developed European countries is as high as 85 percent, with 30-40 percent of broadband provided by cable operators. Broadband penetration is approaching TV penetration, he said.

Because Central European cable networks are fairly modern, built in the 1990s, they don't require a lot of upgrades.

Speaking about Liberty Global, Kohnstamm said: "We don't need more fiber. With DOCSIS 3.0 we have all the bandwidth we need for the future. We can perfectly compete with fiber to the home technologies for the next 8-10 years. We may need to split fiber."

As for video, Kohnstamm said, European broadcasters are transitioning from analog to digital, but it's not that noticeable to consumers.

"The quality leap made in the United States from SD to HD was substantial," he said, while in Europe, analog picture quality from broadcasters is better because of its PALPlus analog TV system. "That's a reason that it will go slower than in the States."

- Linda Hardesty

Read more news and analysis on Communications Technology's Web site at www.cable360.net/ct/news/.