Euromedia February March - Page 6

Digital transition drives Euro cable growth


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
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 .
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
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 .”