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Cable suppliers aim to cover half EU households

Francesco Guarascio

08-03-2012

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Languages: Français

The European cable industry aims to increase their coverage of high-speed internet connections to over half of EU households by 2020, in a move that would help meet the EU's ambitious targets on high-speed broadband.

Cable service providers claim they can raise their coverage of super-fast internet to 112 million of the EU's 203 million households by the end of the decade.

The projections were published during the yearly congress of the European cable industry, held in Brussels yesterday (7 March).

The EU definition of super-fast internet is a broadband connection which runs at a minimum of 100 megabytes per second (Mbps). Fast internet, by contrast, runs at speeds of only 30 Mbps and more.

A range of services are only available at higher speeds, such as watching streaming videos or playing online videogames.

The EU's target for broadband, contained in the European Commission's so-called Digital Agenda, is to reach 100% coverage for high-speed connections (30 Mbps) by 2020. Half of European households should subscribe to at least 100 Mbps by the same time, according to the Commission plan.

But the EU is currently off track as only 6.5% of all broadband connections currently work at 30 Mbps speed, and just 0.9% of them rely on 100 Mbps, according to official figures. Fibre currently represents only 2% of the EU’s broadband market share as regulators and industry struggle to find the right formula to spur investments away from copper-based lines.

The cable's bet

Despite the current stalemate, the cable industry shows optimism, with operators planning to increase both coverage and penetration rates for super-fast internet.

According to Cable Europe, only half of EU households (101 million) are reached by cable service providers, with connection speeds ranging from 10 Mbps (mostly) to 100 Mbps (rarely). Services here usually cover not only internet, but also television and telephone.

By 2020, Cable Europe believes coverage should grow in quantity and quality, reaching the target of 112 million households equipped with internet connections working at over 100 Mbps.

The industry’s ambitions run even higher when it comes to cable penetration rates. Currently, less than 1 million EU households use super-fast internet through a cable connection. But the industry believes that in the most optimistic scenario, this number could increase to 51 millions by 2020. This means up to one quarter of the total number of EU households, and half the EU's target.

This may appear over-optimistic but the industry supports its claims with recent growth rates. A report, published in 2011, found that growth in cable business was rising faster than in previous years, with total revenues in Europe reaching €19.9 billion in 2011, a 7% increase on 2010.

“These growth figures prove that investments in next generation services are really bearing fruit and that cable operators are more than holding their own against other platforms even in today’s highly competitive, highly dynamic markets,” commented Cable Europe President Manuel Kohnstamm.

But the industry’s optimism may also be aimed at convincing regulators that super-fast internet can be delivered with cable rather than fibre. As a matter of fact, the EU Executive remains convinced that fibre is the best solution to deliver super fast internet, while upgraded copper lines or cable infrastructure can only be a complementary, but not a stand-alone solution.

Positions

The European Commission holds the line that Europe needs to upgrade its broadband network to increase internet speed, therefore allowing new services to be delivered and new opportunities to emerge for EU citizens and entrepreneurs.

Asked about the objectives of the EU digital agenda, George Serentschy, 2012 chairman of the EU's body of regulators for electronic communications BEREC, maintained the official position: “My view is that the digital agenda is sufficiently ambitious. It is not over-ambitious,” he said.

But not everybody shared this view. Indeed, the targets on internet speed were openly challenged by several industry speakers.

Matthias Kurth, president of BnetzA, the German agency in charge of telecommunications, said: “Speed is not everything. With the current, average internet speed we could do a lot more,” he said, pointing at improving standardisation and consumer-friendliness of available services rather than at increasing existing connections’ speed.

He was echoed in his remarks by Daniel Danker, general manager for programmes and the on demand sector at UK public broadcaster BBC. After criticising the dogmatic view of increasing speed at all cost, he said: “Speed is an over-simplistic measure and also misleading. When you are said to dispose of 50Mbps, this is only the peak of your connection speed, since in reality you often have far less than that.”

Background

Fast internet, or broadband, is available to almost all EU citizens although it is used only by a quarter of them.

Super high-speed broadband, on the other hand is still marginal, accounting for only 2% of total connections. In this field, Europe lags behind international leaders, notably the USA, Japan and South Korea.

Copper-based lines are the most used infrastructure in the EU to bring broadband to households. More than three quarters of broadband connections in the EU used this technology.

Cable modem is the second most common fixed broadband technology with a market share of 16.2 % in the EU in July 2011, according to Commission figures. Cables are deployed in very little amounts in most EU countries, but Belgium (where they cover 46% of total broadband connections), Hungary (44 %), Malta (44 %), Romania (44 %), the Netherlands (41 %) and Portugal (40 %).

Optical fibre backbones are considered by many as the key technology to provide super high-speed internet. But its take-up has been extremely slow, with only 2% of internet connections in Europe based on fibre.

Further Reading

European Union

Business & Industry

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