Major moves for cable operators in Europe

Article  by  Matthieu REBOUL  •  Published 18.03.2013  •  Updated 18.03.2013
Major moves for cable operators in Europe
[NEWS] U.S. company Liberty Global is seeking to buy the British Virgin Media. If authorities give their go-ahead, this could be the first in a series of major operations for European cable operators.
In the media universe, they were among the forgotten of the 2000s, with all eyes riveted on mobile and Internet operators. But today, cable operators seem to be on the verge of taking their revenge. With infrastructure already adapted for ultra-high speed Internet, they now find themselves in an advantageous position, as compared to telecommunications operators who are just now starting to offer fiber optic services.
 
Liberty Global made no mistake. Following an aborted attempt to completely take over the Belgian Telenet – of which it already possessed more than 50% of shares – in December 2012, the American group decided to acquire the British Virgin Media for 23 billion dollars. This acquisition is intended to strengthen Liberty Global’s European presence and comes in the wake of buyouts of the second- and third-ranked players on the German market, UnityMedia and Kabel BW, in 2010 and 2011.
 
This operation is set to grant Liberty Global the title of number one cable operator worldwide, with 47 million connected households. It should also allow the company to strengthen its array of services, as Virgin Media already offers quadruple play services in the United Kingdom (television, Internet, fixed line and mobile telephone), and may be followed by further buyouts and mergers on the European operators landscape.
 
Vodafone, the British telecommunications giant, has apparently opened discussions with Kabel Deutschland, a German cable operator. To face the competition from Deutsche Telecom, which is investing massively in fiber optic, Vodafone’s German subsidiary is also seeking to offer ultra-high speed – not possible for now, given infrastructural limits. The buyout of a cable operator would provide a solution at a lower cost and above all, save time in doing so, as compared to the efforts required to roll out a new network.

France has seen the opposite phenomenon, with a cable operator seeking to take control of a telecom operator. Threatened over the first decade of the 2000s, overtaken by television services integrated into service provider deals requiring no specific connection, today the cable market is concentrated in the hands of a single player, Numéricable. With the rise of ultra-high speed, Numéricable is now in a strong position, given technologies that have allowed it to quickly offer Internauts high speeds. Thanks to this lead, today, Numéricable counts over half a million ultra-high speed subscribers – four times more than Orange. And to secure the means for its ambitions, the cable operator is seeking to acquire the operator SFR, although the latter is larger and less indebted. Once again, the objective will be to quickly offer consumers a package including television, Internet, fixed line and mobile telephone, with the advantage of ultra-high speed.
 
The cable operators missed out on the opportunity offered by first-generation Internet, based on telecom operator infrastructure, which is no longer sufficient to guarantee subscribers speeds suitable for new uses – meaning renewed demand for cable company networks. The buyout operations occurring should thus allow for new giants to emerge at the forefront of the landscape. They also illustrate the ever-growing trend of convergence between various media operators – a logical response by manufacturers to the convergence of screens that is radically changing how we consume content today.
 
Translated from French by Sara Heft
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Photo Credit:
Louis Abate/Flickr  
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