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Booming broadband drives EU cable to new highs

Record revenue fuelled by continued growth in cable revenue generating units, says European broadband cable yearbook

Rising consumer demand for broadband services took European Union (EU) cable market revenues to a record high of €24bn in 2018, up 3% year on year, according to research from IHS Markit | Technology.

The European broadband cable yearbook research found that the all-time-high revenue was propelled by continued growth in the total number of cable revenue generating units (RGUs) in the EU, which inched up by one percentage point from the 2017 figures to total 121.7 million.

Most of the RGU growth originated from the broadband sector, where consumers continue to add subscriptions to cable internet services. In terms of subscriptions, RGUs for cable internet service amounted to 38 million in 2018, up from 37.1 million in 2017. This growth helped drive the increase in overall EU RGUs for the year.

“Carrying on the trend from 2017, broadband remained the primary growth engine for the EU cable business in 2018, generating new RGUs and spurring the market’s revenue expansion,” said Maria Rua Aguete, executive director of media, service providers and platforms for IHS Markit | Technology.

“European cable operators have successfully diversified their offerings into complete bundles of video, voice and internet services. This has positioned them to capitalise on the voracious consumer appetite for broadband.”

With broadband revenue and subscribers continuing to increase, internet access could become the main business for European cable operators in the future. Internet RGU growth has outperformed the other services offered by cable providers in the region. Even though television represented 45% of total cable revenues in 2018, EU subscriptions to cable TV declined by 275,000 in that year.

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The European broadband cable yearbook research noted that internet services totalled 35% of revenue in 2018, potentially putting this area on track to become the sector’s largest revenue generator in the coming years.

Other key drivers for growth during 2018 were the deployments of DOCSIS 3.0 and 3.1, which played a major role in stimulating consumer demand as operators look to offer gigabit speeds, meeting the challenge from fibre-to-the-home (FTTH).

Overall, the number of digital cable subscribers continued to rise in the region, increasing by four million to 45.2 million in 2018, as operators converted significant numbers of subscribers from analogue TV to higher-value digital services.

The yearbook was produced in association with European cable trade body Cable Europe. Going forward, the association will be folded into a new entity, GIGAEurope, which will aim to promote the industry’s interests, and in the longer term become an umbrella organisation for a broad section of the connectivity industry. Members already include Liberty Global, Vodafone and Telenet.

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