On 6 November 2018, representatives of the cable operators gathered in London for the Cable NextGen Europe conference. The picture that emerged is one of an industry with some meaningful ammunition under its belt for the years ahead, in the form of innovative video platforms such as Vodafone’s new Cloud TV, and of new technology through which Gigabit speeds can be a reality – even in Europe, where ultrafast broadband is lagging behind other regions. However, 5G is still a huge question mark for cablecos; yet fixed–mobile convergence and the demand for backhaul coming from MNOs could create opportunities operators should be ready to seize.
Content and Gigabit speeds will drive cablecos’ market proposition for the years to come
Cable operators are generally concerned about three things: improving their value proposition, delivering increasingly fast broadband, and catching at least some of the 5G wind in their sails. These topics were all extensively discussed at the Cable NextGen Europe conference in London, in which industry members highlighted challenges, success stories, and opportunities that lie ahead.
The value proposition for cablecos is strongly linked to video content. This was apparent in the keynote delivered by Nuno Sanches, Group Head of Fixed Development at Vodafone. The operator is both a telco and a cableco; or, in Sanches’ own words, “the most messed up operator in the world”, as he recognised the difficulties in getting the telco and the cable side of the business to talk to each other meaningfully. Earlier this year, Vodafone moved to acquire Liberty Global’s cable networks in Germany, Hungary, Romania, and Czech Republic; however, these acquisitions are still pending regulatory approval. One key pillar of Vodafone’s strategy is Cloud TV. “It is a necessary tool to face the new world”, after some time during which operators failed to offer value propositions that customers appreciated. To this end, the key word is defragmentation: one single product across the operator’s footprint.
Faster broadband also plays a key role in how cable operators improve their offering. To this end, recent technology evolution has made sure cable providers are well placed in the race for the Gigabit society. “We are now able to deliver 5Gbps speeds” noted Jeff Finkelstein, Executive Director of Advanced Technologies at Cox Communications, who also added there is simply “no life expectancy for coaxial cable”. It is, in other words, future-proof infrastructure.
However, there are challenges to overcome, as noted by participants on the panel entitled “Managing 1 Gig Services & WiFi – Lessons Learned”. Here, panelists highlighted the need to improve WiFi technologies and match cable’s ability to deliver speeds above 1Gbps. At present, home WiFi becomes a bottleneck to the delivery of such speeds, which results in failure to deliver the promised speeds to customers; and customers rarely care about technicalities. Hence the need to solve this problem in the future, especially as WiFi will continue to be part of the solution through which connectivity is delivered at home.
CityFibre wants cable operators to be their customers
Greg Mesch, CEO of the UK wholesale fibre network infrastructure provider CityFibre, had a clear message for the cable industry: come to us. “We are the competitive force both for telcos and cable”, he said. Wholesale-only fibre networks can be relevant to cable operators in areas where cablecos do not have their own footprint. Fibre infrastructure is “cheap, fast, and does not require maintenance”. Mesch also noted how growth at scale is important in this business model, meaning that transactions with a given operator can take place across dozens of cities. To this end, CityFibre has recently launched “Project Accelerate” – a £2.5bn investment programme across the UK; the project covers 37 cities, with the view to reach 50 cities once it is completed. Pricing details were also revealed: “We are offering £12 to £14 fibre lines to the home”, using the GPON2 architecture.
Mesch highlighted the advantages of the wholesale-only model, which removes risks of discrimination for access seekers, and noted such model is becoming successful in other countries (Italy, Ireland, Germany, among others). He went as far as saying that it could become successful in the US, where so far it has not gained traction for various reasons. It is however important that regulators ensure a level playing field is created, and called on Ofcom to guarantee a level playing field in the UK, moving away from what he defined as the “all I do is regulate BT” approach.
5G can create opportunities for cable providers
The last panel of the day posed a crucial question for the future: will 5G be friend or foe for the cable industry? Panelists offered a range of views, showing that a clear consensus on this point is yet to be reached: “(At the moment) they are just neighbours getting to know each other”, argued Carla Botelho, Director of Access Network Engineering at NOS.
5G is more than a simple upgrade to mobile technology, and as such it bears elements which can, in some cases, lead to it being a substitute of fixed networks (to this end, interest on such use case is coming up in Romania. As such, on the one hand it can be seen as a new competitor for fixed operators, including cablecos; and on the other hand, it can become a crucial part of the proposition in regions such as Europe, where fixed–mobile convergence has been instrumental for companies’ market strategies. Either way, the cable industry cannot ignore the advent of 5G; panelists broadly agreed that, if opportunities are not visible at present, industry should make a point to identify them, since 5G is coming anyway, and will transform the telecoms landscape over the next five to 10 years. To this end, cable operators could seek opportunities at the wholesale level: their ability to offer very high speeds can put them in a good position to offer backhaul solutions to mobile operators, which will have to rely on high-capacity backhaul to make 5G happen.
