For European cable operators, the big competition comes from large and entrenched telcos. But the younger and more spry cable industry sees various opportunities to grab market share.
Because the big telcos have so much clout and advertising money, many Europeans think of digital subscriber line (DSL) when they think of Internet connections.
"DSL is considered to be the benchmark," said Hans Plug, senior director, product line management, with Arris. The telcos use the term "DSL" in their marketing materials as synonymous with high-speed Internet, he said.
But cable operators are betting that in the near future, European consumers will want faster Internet speeds that cable can provide with its fiber networks. (For more, click here.)
Manuel Kohnstamm, managing director, public policy and communications for Liberty Global Europe, said Liberty is well-positioned with fiber. But while the company has all the fiber it needs for the next several years, it plans to upgrade its existing plant with new technologies such as DOCSIS 3.0 and node splitting.
Hoping to provide European cable operators with upgrades to their fiber plant, Aurora Networks is attending the ANGA show, scheduled for late May in Cologne, Germany, to demonstrate some of its optical transport technologies.
"With wave division multiplexing (WDM), you can get more and more data down that one pipe," said Dawn Emms, director of marketing, optical transport solutions at Aurora Networks. Emms said it’s important to maximize the capacity of the existing pipe as much as possible because "everything has to be buried" in Europe, and that’s particularly onerous in historical cities.
As far as the competitive landscape in Europe, Emms said: "If you go east, those networks were less sophisticated … and the telcos are particularly strong. Cable operators are stepping up to the plate and responding. We’re not seeing telcos investing in fiber networks the same as we have here (in the United States) with Verizon."
"We have three products that people need," said Michael Fries, president and CEO of Liberty Global, at a session of the Cable Show in April. "East European countries are struggling right now. While we’re still growing through this, we’re pushing the accelerator to get some of these other operators out of the business."
But even if cable is able to displace the big telcos, competition remains fierce.
"Telcos have been a strong force in Europe with telephony and then data and now momentum behind IPTV," said Emms. "Now you also have new entrants – power companies and municipalities getting into the triple play. They’re building new networks." (For more on IPTV in Europe, click here.)
One market grows for cable
Besides upgrading its fiber plant in western Europe and jockeying for dominance in eastern Europe, cable is experiencing an expansion of its broadband market in one country – Germany.
Kohnstamm said Germany had suffered stifled broadband growth because of government regulation, but recently, "those constraints have lifted, and they are catching up."
Arris’ Plug explained that the German cable industry had been separated by legislation into tiers, with one tier owning the content, another tier owning the pipe into neighborhoods, and another owning the pipe into the home. It was very cumbersome to roll out new products or technologies because of the difficulty of getting all the interest groups to work together.
A couple of years ago, those tier requirements were relaxed, and the owners have been consolidating.
One of the bigger German cable companies, Kabel BW, has been upgrading to DOCSIS 3.0, said Plug. "KBW has been buying our equipment."
– Linda Hardesty
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