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Digital transition drives Euro cable growth
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BT, Ofcom agree Openreach‘ split’
UK dominant telco BT and regulator Ofcom have reached agreement on a long-term regulatory settlement that will see the telco’ s infrastructure unit Openreach become a distinct, legally separate company with its own Board, within the BT Group. The agreement is based upon voluntary commitments submitted by BT that the regulator has said meet its competition concerns.
Among a range of undertakings from BT:
• Openreach Limited will have its own branding, which will not feature the BT logo.
• The Openreach CEO will report to the Openreach Chairman with accountability to the BT Group Chief Executive with regards to certain legal and fiduciary duties that are consistent with BT’ s responsibilities as a listed company.
• Openreach, which builds and maintains the tens of millions of copper and fibre lines that run from telephone exchanges to homes and businesses across the UK, will assume greater independence under its own Board of Directors. Gavin Patterson, BT Chief Executive,
said:“ I believe this agreement will serve the long-term interests of millions of UK households, businesses and service providers that rely on our infrastructure. It will also end a period of uncertainty for our people
and support further investment in the UK’ s digital infrastructure.
The agreement builds on changes that BT has already made to the governance of Openreach in recent months. These include the creation of an Openreach Board with a majority of independent members.
According to Ofcom, the new Openreach will have the greatest degree
“ This is a significant day for phone and broadband users.” of independence from BT Group possible without incurring the delays and disruption – to industry, consumers and investment plans – associated with structural separation or the sell-off of Openreach to new shareholders.
Sharon White, Ofcom Chief Executive, said:“ This is a significant day for phone and broadband users. The new Openreach will be built to serve all its customers equally, working truly independently and taking investment decisions on behalf of the whole industry – not just BT.”
“ We welcome BT’ s decision to make these reforms, which means they can be implemented much more quickly. We will carefully monitor how the new Openreach performs, while continuing our work to improve the quality of service offered by all telecoms companies.”
Ofcom announced plans in 2016, as part of its Digital Communications Review, to overhaul Openreach’ s governance and strengthen its independence from BT. This followed the regulator’ s concerns that BT has retained control of Openreach’ s decisions, while other telecoms companies have not been consulted sufficiently on investment plans that affect them.
Digital transition drives Euro cable growth
The cable industry is growing, with total revenues up 4.6 % year on year based on IHS statistics released by the industry’ s trade association, Cable Europe, at Cable Congress in Brussels. Revenue growth remains solid across all cable services: broadband Internet( 7.5 %), TV( 3.7 %) and telephony( 2.1 %). Broadband represents an increasing share of revenue at 32.8 %, and the number of broadband subscribers rose 5.9 %. Television continues to be the largest source of profit for the industry, accounting for 46.5 % of the € 23.45 billion of revenue.
The digital transition continues to be an important driver for TV services, with
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revenue growth for TV driven by a strong appetite for digital subscriptions and
video on demand( VoD). Digital TV subscribers rose 6.3 %, accounting for 66.3 % of all TV subscriptions and generating 80 % of TV revenue.
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More than 2.7 million Revenue Generating Units( RGUs), the industry metric for
the total sum of TV, Internet and telephony subscriptions, were added in 2016, and the total across Europe is now 118.24 million.
“ Overall digital VoD revenue
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has increased by 14.1 per cent year on year, showing solid growth in the year,” advised Manuel Kohnstamm, president of Cable Europe.“ Going forward, we still see huge opportunities for sustained digital growth in Europe, as 18.5 million analogue TV subscribers are still to convert.”
Cable Europe executive chairman Matthias Kurth added:“ Continued investment in infrastructure and content shows cable is providing consumers with the content they want in a digital age. As cable continues to convert analogue homes to digital, giving consumers more choice and content will result in them taking up more services. This trend should continue with the digital revolution across cable.”
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