The Cable Top Ten

What are the key industry developments shaping the future of cable? Digital TV Europe presents its take on the top 10 priorities for the industry.

1. The need for scale

For cable operators seeking to rival telecom players in scale and compete at national – or international – level, the most obvious route is to buy other operators’ networks. Indeed, acquisitions have historically been the preferred way to expand for major players such as Liberty Global, Vodafone or Altice.

Consolidation of the cable industry has progressed over the years in some markets and less so in others. While the UK and France have one operator each, the industry in much of central and eastern Europe remains highly fragmented.

While players such as Altice, Deutsche Telekom, Telekom Austria and TDC – and more recently, Sweden’s Tele2 with its planned acquisition of Com Hem – have built a mix of telecom and cable assets, Liberty Global and Vodafone have been the major players in consolidating the European cable business in recent years and there has been on-and-off speculation about them taking the biggest step of all towards pan-European cable consolidation by merging with each other. The pair are currently engaged in talks related to specific territories, notably Germany, where both have cable assets and Liberty Global is the smaller player.
The groundwork for collaboration between the pair has been set by the pair’s VodafoneZiggo JV in the Netherlands, which represents a different direction for M&A – namely the convergence of fixed and mobile networks, which also underpins the Tele2/Com Hem tie-up, a move that was likely driven by common shareholder Kinnevik, which has committed to not sell its shares in either company for at least six months after the deal is completed. Other fixed-mobile mergers include Belgian operator Telenet’s acquisition of BASE and SFR BeLux.

“In terms of M&A we will see more fixed-mobile convergence mergers between mobile and fixed broadband providers,” says Maria Rua Aguete, executive director, technology, media and telecom at IHS Markit. “These mergers are often motivated by the desire to offer integrated solutions, consisting of fixed broadband and telephony, pay TV and mobile services. Quad play is critical to retain customers and achieve growth, hence the intense M&A activity between telcos and cable operators.”
A broader tie-up between Liberty, which this year split off its Latin American interests and agreed the sale of UPC Austria to T-Mobile, and Vodafone remains the most obvious large-scale merger play in European cable and still makes sense to many industry observers. Liberty is, however, continuing to make moves to focus on markets where it can realistically build a large-scale operation that can compete with telecom players. It is trying to expand its base in Poland – by acquiring Multimedia Polska – while selling off in Austria, where it has a relatively small reach.

Other moves to consolidate are taking place. Last year Basque Country-based Euskaltel acquired Zegona Communications-owned Telecable, another regional operator in northern Spain. Euskaltel also announced plans to expand its reach in adjacent Spanish regions by using third-party infrastructure. IHS’s Rua Aguete believes that the most likely long-term outcome in Spain is the acquisition of the northern Spanish player by Vodafone, which, through its ownership of the former ONO, is already the country’s major cable operator.

At the other end of Europe, Finland’s Elisa acquired Estonian cable operator Starman. In between, Germany’s Tele Columbus has built itself into a more considerable player by acquiring Primacom and Pepcom.

Despite this flurry of activity, the overall pace of consolidation between European cable players remains relatively slow, perhaps indicating that bargains are hard to find. This has probably contributed to some operators turning to an alternative way of achieving scale – building out their networks into greenfield areas.

2. Investing in the network

The network has always been the cable industry’s biggest asset, with the hybrid fibre-coaxial (HFC) infrastructure planted in the ground decades ago giving cable players a major advantage over telecom operator rivals forced to build out expensive fibre-to-the-home or rely on other technologies that historically have been less able to deliver ultra-fast services to consumers.

The quality of cable networks is nevertheless uneven and cable’s technical reach is limited compared with that of incumbent telcos. Operators have therefore continued to invest in upgrading out-of-date plant to deliver high-speed services. However, the cost is lower than planting fibre in the ground from scratch, which has remained a key advantage for cable operators – which generally have access to more limited financial resources than big telcos.

Operators with access to sufficient resources such as Liberty Global have also sought to expand their footprint by building out both HFC and fibre networks to greenfield areas, a strategy that has been aided by technological advances that have reduced the costs, helping to make build-out strategies a feasible alternative to acquisition of other operators, which, conversely, has become more expensive.

According to Cornel Ciocirlan, chief technology officer, Europe at cable technology provider Arris, cable operators are not only seeking to make the most of their existing HFC infrastructure but are in some cases actively building out HFC rather than FTTH to new-build areas. “We still see HFC being actively built – operators are building new HFC plant. They have a choice, and all being equal they will build out fibre. But all is not always equal. The cost of an HFC home is much less, and from a capex perspective operators want to make every dollar or euro count,” he says.

In fact, says Ciocirlan, operators are using a mix of technologies in new-build areas. They are often collaborating with housing associations and builders who require fibre as a marketing tool. Operators are sometimes using the RF-over-glass (RFoG) technology that enables them to maintain a single service delivery platform across both HFC and fibre networks.

Speaking at the UBS Annual Global Media and Communications conference at the end of last year, Liberty Global president and CEO Mike Fries said that new build of network in areas where it does not already have a presence is a key growth opportunity for the operator, which was “hitting the marks” in terms of the targets the company has set. He said Project Lightning – the name of the company’s network build-out in the UK – was delivering in terms of costs and rising revenues. “Lightning is doing everything we asked it to do,” he said.

Crucially, said Fries, Liberty was focused on “long term enduring growth” rather than short-term cash flow, which is why it is investing in new network areas.

Operators with more limited resources and scale than Liberty Global also know that extending their reach is crucial to competing effectively with better-resourced telcos. In a number of markets with fragmented cable infrastructures mid-sized operators have sought to forge partnerships with smaller local players to offer their services across the local network in arrangements that fall short of outright acquisition.

In their existing network footprint, meanwhile, operators are seeking to reclaim bandwidth in order to offer higher-speed broadband service to compete more effectively with rival providers. This trend both fuels and has been fuelled by cable losing TV subscribers to IPTV and satellite, while gaining new broadband customers. Many operators have now moved to shut down analogue services, losing some legacy customers but enabling them to focus on higher-paying bundled offerings. The ultimate goal is to deliver TV through IP, but the presence in the network of legacy RF set-top boxes still acts as a brake on this.

3. Multiplay bundling

Bundling TV, broadband, and telephony has for years been a competitive way to upsell existing subscribers to new products, and convergence remains a strong strategy for European service providers today.

In February of this year, Vodafone confirmed that it was in early stage discussions with Liberty Global about potentially acquiring “overlapping continental European assets”. According to reports, the discussions were focused on Liberty’s cable assets in Germany, which are run by Unitymedia – the country’s second largest cable operator. Vodafone is already Germany’s cable leader following its acquisition of Kabel Deutschland in 2013.

Speaking at the UBS Annual Global Media and Communications conference in December, Liberty CEO Mike Fries commented that “national scale is what matters in Europe” and said Liberty would be a “buyer or a seller” in markets where it lacked scale. Shortly after T-Mobile Austria agreed to buy Liberty Global-owned cable operator UPC Austria for an enterprise value of €1.9 billion, transforming it in the process from a mobile to a quad-play provider.

Speaking on Liberty’s recent fourth quarter earnings call, Fries said that he has no intention of dismantling the company’s European business and stressed that he remains committed to growing its business in markets where it can achieve national scale.

This latest burst of activity is the latest in a long line of similar deals in the European market. In January Swedish telco Tele2 agreed to buy local cable operator Com Hem in a merger agreement that will establish Tele2 as a major integrated mobile and fixed line operator. A year earlier Liberty and Vodafone completed the creation of their Dutch joint venture, establishing a converged fixed and mobile communications operator to compete with KPN. In early 2016, meanwhile, BT closed its £12.5 billion (€16.7 billion) buyout of UK mobile operator EE to make its mark on the quad-play market.

While more deals of this type look likely to follow, it is worth considering that the future of bundling is likely to go beyond just offering TV, internet and phone services. “I expect the traditional triple and quad-play bundled strategies to continue in tandem with the growth of more ‘evolved’ bundles that may include newer OTT elements but will also comprise different mixes of the traditional service components,” says Jonathan Doran, principal analyst at Ovum and an expert in telco video and pay TV operator strategies.

“We can expect more operators to drop fixed line rental, while some will cater for cord-shavers and cord-nevers with dual offerings based around fixed and mobile broadband but without the enforced pay TV component. Bundling options will become increasingly modular so that, for example, there is a base of single or dual-play broadband, with the choice to add pay TV or online video: a kind of semi-a la carte scenario.”

4. Next-gen TV

In an increasingly competitive content landscape, user experience is arguably becoming a key point of differentiation among operators. But to what extent do advanced TV features and set-top box developments matter to customers?

In its most recent earnings announcement, Liberty Global said that in Q4 2017 it added 210,000 subscribers to its advanced TV platforms – Horizon, Horizon Lite, TiVo, Virgin TV V6 and Yelo TV. The additions still only took its advanced TV total to 43% of its total cable video base, but was a significant positive in a quarter where its overall video customer number dropped by 54,500.

Liberty-owned UK operator Virgin Media announced in January that it would offer customers a free upgrade to its high-end V6 set-top box – in what it described as one of the largest customer upgrade programmes ever carried out in the UK. Virgin Media said that by the end of the year it expects the majority of its TV customers to have a V6 box – a premium, 4K-ready device that allows users to record up to six programmes while watching a seventh recording or stream.

Pushing TV customers to their latest and most impressive TV experience makes sense for operators in today’s hyper-competitive media landscape. Virgin Media claims that V6 customers spend on average two hours longer each week watching TV and are more than twice as likely to watch a box set – an important factor when research shows that linear TV viewing is down overall as the popularity of on-demand platforms increases.

“As consumer expectations keep rising and differentiation based on content alone is likely to become more challenging in most markets, UX is one of the key factors that consumers will consider when choosing a multi-play operator,” says Simon Trudelle, senior director, product marketing at Nagra.

The content protection and multiscreen television solutions company works with cable customers around the world – including Altice Group, Net Serviços and StarHub – which have deployed Nagra UX solutions to introduce new on-demand and multiscreen features and capabilities.

“From easily providing access to on-demand content, including start-over, catch-up TV and cloud DVR, to onboarding OTT apps like Netflix, or providing linear channels delivered to any screens, our customers have successfully evolved their platforms to provide more convenience and better access to content for their subscribers,” says Trudelle.

With much set-top box functionality moving to the cloud, it is important that operator-provided devices integrate new capabilities like personalisation, voice recognition, and smartphone-based remote controls and video casting, while also providing access to OTT app stores.

“There is an innovation gap building up in the industry, and there is a real risk for cable operators in particular – especially the mid and small-size ones in Europe and elsewhere,” warns Trudelle. He claims that distributing a bundle of linear channels is “simply not sufficient anymore to guarantee TV revenues”, with younger viewers in particular increasingly deciding to access TV and video services through OTT players. He suggests that while incumbent cable operators need to evolve legacy infrastructure, they should take a cloud platform approach to compete with fast-moving over-the-top competitors.

5. Investing in content

Investing in content is one way to differentiate a pay TV offering. But what content works best and is this always the right approach for an operator to take?

Premium sports rights have long been a major draw for viewers and a key investment for pay TV operators. While major online video giants like Netflix and Amazon have – for the time being at least – focused their efforts around scripted content, live sport remains an important reason for choosing and remaining committed to a pay TV operator.

Another battleground that is of increasing importance, at least for some operators, is high-end drama.

In Spain, Telefónica has invested €70 in Movistar+ original productions and it recently announced plans to launch these series in 12 countries across central and south America – airing them on a new Movistar Series channel and across its Movistar TV and Movistar Play platforms.

Elsewhere, Liberty Global recently announced its second move into original drama, partnering with All3Media International and Amazon Prime Video to produce The Feed – a London-based series, set in the near-future.

Sky, meanwhile, said on its most recent earnings call that viewing of Sky channels had increased by 6% following both critical successes and record audiences for Sky Original productions like Riviera and Tin Star.

Ed Border, principal analyst, Ampere Analysis, says that pay TV operators can market themselves via a mix of two things – convenience or exclusivity.

Cost-effectively bundling channels and services that are available elsewhere, with something like a broadband package, is an example of value through convenience. Exclusivity, on the other hand, is important but does not necessarily need to be achieved through direct content production. This can also be offered through licensing deals – such as Sky’s deal to offer HBO content in the UK through Sky Atlantic.

Of the many larger operator-broadcasters that do effectively invest in original content, Border says the choice comes down to whether they should produce or commission new genres – for instance comedy – and how to brand this original content.

“In some ways, for these large broadcasters, the rise of Netflix can be slightly beneficial – as they can commission local content, for which they own the rights in their own markets, and then sell the rights for other global markets to an international platform,” says Border.

“Such deals – in which global SVOD platforms obtain near-global exclusive rights to a piece of content and market it as an ‘original’ – are becoming increasingly common.”

“For smaller cable and pay TV operators, providing more niche or localised service and content, originals become less important. These services are often picked up by consumers alongside an SVOD platform or subscribed to for their local or specialised content. It is therefore more important that these platforms provide carefully curated in-demand content, rather than major originals.”

For general operators looking at TV seasons, Border claims it comes down to optimising choice based on local tastes. For example, Turkish viewers have a preference for long-form TV seasons with long episode times, South Korea has a steady flow of one-off, short drama seasons, while in South America long-running telenovelas are key.

6. Embracing OTT

Virgin Media in the UK was the first pay TV operator to let Netflix on its platform back in 2013. The cable provider initially offered the service to a limited number of homes on its Virgin Media TiVo boxes, before rolling it out to all TiVo customers. Com Hem was Netflix’s second cable provider partner, with the Swedish operator launching it on its TiVo based platform the same year.

Since then the subscription video-on-demand service has expanded to pay TV platforms all around the world. The first US cable operators to take up the service were RCN Telecom Services, Atlantic Broadband and Grande Communications in 2014, followed closely by Suddenlink. While the biggest US cable providers took longer to take to the idea, Comcast launched Netflix to X1 customers in 2016, while Charter and then Cox integrated the service in 2017.

In Europe, Liberty Global’s decision to embrace the service in 2016 was a major watershed moment. As part of a multi-year deal, the operator pledged to make Netflix’s content available to its subscribers in 30 countries around the world.

In the past year alone, Netflix has extended its partnership agreement with Deutsche Telekom, struck an expanded international deal with Orange, and made a multi-year agreement with Altice covering France, Portugal, Israel and the Dominican Republic. A pact with OSN in February 2018 marked Netflix’s first partnership in the Middle East and North Africa region.

“In the post-OTT era we now see the blending of the key SVOD apps by pay TV cable operators,” says Anthony Smith-Chaigneau, senior director of product marketing at Nagra – the digital TV division of the Kudelski Group. “Some would say this is letting the fox into the hen-house but we see that, with the cable operators delivering good broadband, content bundling (premium to skinny), 4K services and access to SVOD and other apps, this is a strategic move to retain customers.”

Ed Border, principal analyst at Ampere Analysis, says that operator decisions to embrace Netflix are dependent on the state of the market, the operator’s market share, as well as the relationship between the platform and the operator.

“Effectively, two things need to happen in order for an operator to onboard an SVOD platform: the operator needs to be profiting enough from its other complementary existing services – such as broadband, mobile, VOD, transactional – so that it does not see the SVOD platform as a direct competitor, more as a complementary add-on-package; and the SVOD platform needs to be a part of a shared ecosystem in a country, rather than a service which is actively driving consumers away from pay TV in that market,” says Border.

“The benefits therefore are providing a more well-rounded and attractive package for consumers, without investing in a proprietary SVOD platform. However, if an SVOD platform is onboarded prematurely, or the operator isn’t able to adjust to changing market conditions, the operator could be left in a position where they are integrating a direct competitor.”

While Netflix’s pay TV footprint is now wide, the same cannot be said for its main global SVOD rival, Amazon Prime Video. Speaking at Cable Congress last year, Amazon Video managing director, Alex Green, said that Amazon was “definitely open” to video partnerships with cable operators. Green, who previously worked for companies including BT TV and Virgin Media, denied that Amazon posed a direct threat to the traditional TV operator model and said that services like Amazon, Netflix and others “easily co-exist” with the cable and pay TV industry.

“In markets in which Amazon just has a Prime Video play, without the wider Prime customers or Amazon Channels packages, it is certainly possible that we’ll start to see a greater number of onboarding deals on set top boxes,” said Border. However, he claims this is unlikely in the large markets of the US, UK and Germany where Amazon’s Channels initiative essentially establishes the company as a rival content aggregator – one that possesses “the financial might to potentially bid for high-value sports or content deals”.

7. The road to Gigabit broadband

Delivering the highest top-line data speeds has long been one of the key tools in cable operators’ armoury in competing with rival fixed-line players. Over the last couple of years, this has crystallised in the race to deliver Gigabit speeds over cable – seen as a suitable benchmark that the industry can use to showcase its ability to deliver ultra high-speed broadband to a wide base.

Cornel Ciocirlan, chief technology officer, EMEA at cable technology provider Arris, says that upgrading or re-architecting networks to make them capable of delivering ultra fast speeds has been a high priority of operators for the last year or two.

Operators are not only investing in upgrading access networks but also looking at future-proofing in-home WiFI networks to ensure that consumers are able to take advantage of the headline speeds on offer, he says.

“A lot of operators are taking the approach, in preparing for the future, that once you put a cable modem with embedded WiFi in the home, it will be there for years. You need to prepare your subscribers for these high-speed services,” says Ciocirlan.

On the network side, says Ciocirlan, operators are investing in CCAP systems and a distributed architecture alongside DOCSIS 3.1.

“The fusion of these technologies gives you the potential to do Full Duplex DOCSIS, providing 1Gpbs or 1.2Gbps or whatever speed you offer upstream as well as downstream,” he says. “It is not necessary this year but in 2019-20 it will be another tool in the toolbox for operators to deploy.”

Full Duplex DOCSIS, which Com Hem recently announced it was piloting, enables cable to compete head-on with fibre providers by offering symmetrical high-speed broadband. There is relatively little evidence of market demand for symmetrical capacity currently. In fact, Ciocirlan says that demand for downstream capacity is still growing faster than demand for upstream capacity thanks to the relative decline of peer-to-peer traffic and growing demand for streaming video and music.

How much demand there actually is for Gigabit speeds in general remains unclear – both ultra high-speeds and symmetrical capacity are currently seen more as effective marketing tools than as something people need in practice.

Nevertheless, Liberty Global last year commissioned a survey by Arthur D. Little that predicted what it called the ‘GigaWorld innovation cycle’ would unlock a market worth between €250 billion and €660 billion a year in Europe by 2025, and between €1.3 trillion and €3.5 trillion globally by that date.

According to Arthur D. Little, this will be driven by three major families of ‘GigaApps’: augmented discovery, blending digital content with the physical world; virtual telepresence, enabling virtual social interaction; and automated living, the delegation of human decisions and tasks to technology and appliances.

For now, however, Gigabit speeds are primarily useful as a marketing tool for service providers in their battle with one another for new customers, and major cable operators such as Liberty and Vodafone are busy upgrading their networks to deliver Gigabit broadband.

Vodafone Germany last year unveiled a four-year plan to invest €2 billion upgrading its networks.
At last year’s Cable Congress, Colin Buechner, Liberty’s managing director of access networks, said that the deployment of DOCSIS 3.1 technology by the operator would enable it not only to offer 1Gbps services but also to improve the reliability of its network and use spectrum more efficiently.

Buechner confirmed that downstream capacity remained the key competitive battleground – a market fact that, ahead of the deployment of Full Duplex DOCSIS, still gives cable an advantage in competition with fibre operators.

8. Mobile and convergence

For cable operators, scale no longer means achieving a wider reach for their fixed networks but being in a position to compete effectively in mobile as well. Fixed-mobile combinations such as the VodafoneZiggo joint venture in the Netherlands, Tele2’s acquisition of Com Hem, Telenet’s purchase of BASE and T-Mobile’s acquisition of UPC Austria account for a growing number of M&A deals involving cable operators.

“Broadband is a core service for cable providers. Our research shows that it is an anchor service in the eyes of consumer. However, providers must offer other services given moves by all players to move towards multiplay convergent bundles. This includes mobile, pay TV, OTT video, and other services including the connected home, home automation and connected car. The future is all about a bigger bundle of things,” says Paolo Pescatore, vice-president, multiplay and media at CCS Insight.

Cable’s own embrace of mobile as the fourth leg in the quad-play is in some respects an awkward fit. Mobile subscriptions are seen as an individual rather than a household purchase. Pay-as-you-go is unpredictable, while cable’s strength is reliable and predicable cash-flow. Mobile also requires additional investment in network infrastructure – either by developing a full MNO or one of the types of of MVNO that offer varying levels of control.

“This is a tough decision and heavily depends on the market dynamics. Owning a mobile operator is extremely costly, need to acquire spectrum, rolling out a network. And do this across territories requires a huge investment. However, it does make sense to own the entire end-to-end fixed and mobile networks especially with the arrival of 5G. For cable providers who own the pipes in the ground, becoming an MVNO is the most sensible option,” says Pescatore.

Mobile is also highly price-competitive, and multi-play – where TV, fixed and mobile broadband and telephony are bundled together – is even more price competitive – not to mention potentially destructive if operators behave ‘irrationally’ in search of market share.

Liberty Global president and CEO Mike Fries, speaking at the UBS Annual Global Media and Communications conference last year, highlighted the fact that adding a mobile play introduces an additional element of volatility into cable operators’ revenues, which has an onward impact on operating cash-flow. Nevertheless, said Fries, Liberty is offering quad-play “in every market that we can” as convergence becomes the key battleground for service providers.

Mobile has simply become a must-have for cable operators in order to compete effectively with multi-play rivals. The battle between telecom service providers in all Europe’s major markets is a multi-play battle. Convergence is the key growth opportunity for operators in markets where new subscribers are increasingly hard to come by.

Convergence is the rationale behind the merger in Sweden of mobile Tele2 and Com Hem has to create the second largest mobile telephony and fixed broadband provider in Sweden behind Telia.

“In essence it is all about offering your customers more choice. If they already sign up to cable, why not offer other services? In most cases it will cheaper than what a rival mobile operator offers. And the cable provider will be able to generate more additional revenue from customers. Recent earnings from numerous European telcos clearly underline the value of multiplay convergent bundles in driving lower churn, which is another benefit,” says Pescatore.

Operators are also engaged in ‘convergence’ in other ways by offering multiscreen availability of their content line-ups and interactive features.

Mobile screens are now highly relevant devices in terms of the consumption of professional content. According to Ooyala’s Global Video Index, over 60% of video plays will be on mobile devices by the middle of this year. Ooyala found that long-form video viewing on mobile devices grew by 77% in the third quarter of 2017 alone. Ericsson’s Mobility Report, meanwhile, predicts that video will account for 75% of all mobile data traffic by 2023.

Service providers can – and do – build a mobile video play by zero-rating bandwidth hungry video services, encouraging the use of mobile devices to consume long-form video.

9. The smart home

The rise of the Internet of Things (IoT) market has made the smart home an increasingly interesting area for service providers to both generate additional revenue streams and keep customers loyal. According to research by Strategy Analytics, nearly 20 billion IoT and connected devices were deployed worldwide by the end of 2017, with a further 10 billion to be added over the next four years.

Among the operators getting involved in this space is Swedish cable provider Com Hem. It teamed up with home security and smart energy technology provider TMPL last year to offer services to its customers such as energy monitoring. In the Netherlands, KPN’s venture investment arm invested in Nello, a developer of a smart intercom solution, which enables keyless, remote access to residential buildings by upgrading existing intercom systems. KPN Ventures said that this was part of its wider strategy to invest in connected home services.

KPN itself rolled out smart home services back in 2016 after partnering with one of Europe’s leaders in this space, Deutsche Telekom. KPN SmartLife lets users control home security and energy consumption and the platform’s underlying technology is based on Deutsche Telekom’s QIVICON connected home platform.

Deutsche Telekom launched QIVICON back in 2013. The platform is designed to integrate with multiple connected devices and support new revenue generating services around areas like home security, energy consumption and smart lights. Partners using the platform include Philips, Osram, Miele, Samsung, Huawei and Sonos, and Deutsche Telekom customers can control services using its Magenta SmartHome App.

Filipe Oliveira, market analyst at Futuresource Consulting, says that while the potential for added revenues will appeal to operators, on the whole this is not the main reason for them moving into the smart home space.

“What we see happening is operators offering smart home as a way to tie their customers into the service,” says Oliveira, adding that a revamped set-top box is one option for cable TV providers hoping to introduce a new hub or controller for the smart home.

“If you’re thinking of cutting the cord or getting rid of your pay TV because you have Netflix or you get your entertainment from other providers, it’s easy to stop paying. But if it comes out with additional services – if all of a sudden your lighting stops working or your security cameras stopped working, or your climate control stopped working and you need to set all that up either with a new provider or even with a different pay TV provider – then you think twice.”

Other players in this space include Orange, which introduced Smart Home By Orange in Poland in 2013 and in France in 2014, while a number of operators – including EE TV in the UK – have launched voice control support by linking up with Amazon Echo and Echo Dot devices. Elsewhere, Sky launched an all-in-one sound system last year with Devialet, marking the first partner-product designed and built under a licence by the French audio start-up.

In the US, Comcast announced at this year’s Consumer Electronics Show plans to significantly expand its home automation capabilities. The cable giant said its goal is to make Xfinity the “home operating system that integrates the best IoT devices” – including existing Xfinity Home security and automation products.

10. The regulatory environment

European telecommunications regulations have been encouraging investment in network infrastructure and delivering high-speed broadband, and cable operators have broadly been supportive of EU rulemaking while occasionally decrying what they see as politically motivated meddling by national watchdogs. The EC has worked towards the adoption of a new Electronic Communications Code to further the goal of creating very high-capacity networks to enable the Digital Single Market to become a reality. The EC estimated that €500 billion of investment up to 2025 would be necessary to meet its goals, with current investment plans estimated to fall short of this by about €155 billion.

The goal of the code is to amend existing directives covering the framework for communications, access, authorisation and universal service, and to integrate all four into a single text. In terms of access, the code introduces a regulatory objective of promoting access to, and take-up of, high-speed fixed and mobile broadband.

To encourage investment, it sought to limit the imposition of market access obligations by national regulators to markets that don’t function properly. Cable industry body Cable Europe welcomed the proposals, but expressed strong reservations about the application of competition rules in cases of ‘joint dominance’ – where two operators are dominant in a particular market.

Last year Belgian cable operator Telenet, which operates in Flanders, filed an objection to local regulator BIPT’s attempt to force it and Wallonian operator Voo to open up their networks to third parties on the basis that each was dominant in the local cable market. Telenet argued that BIPT’s attempt to create a distinction between cable and the wider telecom market was artificial and undermined the fundamental principle that only operators with ‘significant market power’ should be regulated.

Liberty Global has also faced regulatory problems in the Netherlands – most recently because of a European General Court ruling that annulled its joint venture with Vodafone on technical grounds, requiring the EC to re-examine its original approval of the deal because it failed to conduct a proper analysis of the impact of the deal on the premium sports market. Liberty Global CEO Mike Fries was able to dismiss that ruling as “more of a nuisance” than a major blow and said he was “pretty confident the deal would ultimately be cleared”.