Liberty Global Inc. (LBTYA) is rapidly deploying Wideband network based on EuroDOCSIS 3.0 technology in several European markets. Liberty Global, the largest cable MSO in Europe is facing intensified competition in several European markets from growing fiber-to-the home network deployment. Implementation of Wideband will enable the company to deliver superfast100 Mbps downstream speed.
Management has undertaken a plan to deploy EuroDOCSIS 3.0 in 80%-90% of all UPC broadband divisions in Western, Central, and Eastern Europe by the end of 2010. The company also decided to give some wideband trial runs at VTR in Chile (Liberty Global owns 80% of VTR) and at Telenet in Belgium (Liberty Global owns 50% of Telenet) in the second half of 2010.
At the end of 2009, Liberty Global’s 16.642 million customers in 14 countries. Recently, the company acquired 100% controlling stake of Unitymedia GmbH, the second largest cable TV operator in Germany. Unitymedia has approximately 6.4 million RGUs (revenue generating units); including 4.5 million analog and digital basic cable subscribers and 1.9 million new service RGUs (digital TV Pay, retail broadband internet, wholesale MMA internet, and telephony). Unitymedia has already started offering 120 Mbps wideband services.
We think competition will intensify in many of the company’s markets. KPN of Holland rolled out an IPTV service that competes with Liberty’s UPC Netherlands operations. In Eastern Europe, DigiTV, a new satellite TV service, priced at less than half of Liberty’s UPC cable service, has negatively impacted the latter’s subscriber growth and ARPU. Indeed, management has recently indicated that soaring competition in certain markets, including Romania, Hungary, Austria, and other parts of Europe, has slowed organic revenue and RGU growth in those markets.
Under this scenario, it was critical for Liberty Global to implement the next-generation high-speed EuroDOCSIS 3.0 network. Intense competition among cable operators, satellite carriers, and telecom service providers for broadband market share has forced lot of cable MSOs throughout the world to opt for cost effective bandwidth enhancing wideband technology for high-speed network.
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