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September 8, 2011

EU cable market revenue grew nearly 8% for 2010: IHS

Increase in digital cable subscribers, telephony customers and Internet users drove this growth

By CBR Staff Writer

Cable market revenue throughout the European Union increased by nearly 8% for 2010, primarily due to double-digit growth in digital television, broadband and telephony subscribers, despite rising spectre of cord cutting, according to new IHS report.

The IHS Screen Digest European Broadband Cable 2011 Report said the total EU cable revenue in 2010, including television, telephony and Internet, amounted to EUR18.7bn, up 7.9% from EUR17.3bn in 2009.

A 15.8% increase in digital cable subscribers, a 10.8% rise in telephony customers and a 10.5% boost in Internet users have augmented this growth.

The number of individual service subscriber contracts rose above the 100 million level for the first time in 2010, reaching 101.1 million, up 3.2% from 97.9 million in 2009, the report said.

The figures show cable’s contributions to the ‘Digital Agenda,’ the ambitious European policy strategy to achieve concrete results in the global information society with a tight focus on high-speed broadband rollout.

Cable Europe managing director Caroline Van Weede said across Europe they are seeing healthy growth in their key metrics, with cable operators increasingly coming to be seen be as value added service providers rather than utilities, as they may have done in the past.

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The continued expansion shows the European cable market is resisting the impact of the trend of consumers cancelling their traditional pay television services and turning to Internet-based alternatives, a rising phenomenon known as "cord cutting."

"Cord cutting is having a major impact on the global cable market — particularly in the US, where it is starting to cause a decline in subscribers," said Guy Bisson, research director, television, for IHS.

"However, the 2010 results for the European Union show that cord cutting doesn’t mean the end of the world. Strong increases in EU cable Internet and telephony subscribers are more than compensating for increasing competition in the cable television business," Bisson said.

As consolidation was a major trend for the European cable business in 2010, it was the Central and Eastern Europe (CEE) region that saw most cable deal activity with industry buyers most active.

The cable industry continued to fight regulators in a number of markets including Belgium and the Netherlands over conditions imposed on open access, the report said.

IHS expects to see continued deal activity throughout 2011 with industry buyers remaining at the fore. The report said Eastern Europe is certain to remain the hotspot of activity for deals.

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