Virtually all existing communications and video entertainment businesses are in a time of transition from older revenue patterns to new business models that inevitably will include a mix of products, often sold to different customers than in the past.
Beyond that, it remains unclear what revenue contributions might in the future be made by entirely new lines of business.
But the latest Solon Survey of European cable operators illustrates a couple salient points about the near term growth drivers for North American and European cable operators.
In the near term, growth now comes from broadband access, mobile services and business-to-business services. All other businesses are “long term” and not yet on the immediate horizon.
The key trends are the importance of mobility and services aimed at business customers, which In the 2009 survey were not firmly embraced by cable operators.
By 2011, sentiment had changed, with operators across Europe highlighting the importance of
both segments in driving near term revenue growth.
On average, cable operators expect to double the share of revenues generated through mobile offerings, while the revenue contribution from business and wholesale activities is forecast to increase by approximately 33 percent. For a business historically serving the consumer segment, the expansion of services to business and enterprise customers is significant.
By 2014, a typical European cable operator will be earning 12 percent of its revenues from business customers. Some cable operators, though, already earn more than 30 percent of total revenues from B2B services.
European cable operators surveyed expect revenue growth of over five percent per year until 2014 and further EBITDA margin expansion by two percentage points up to 48 percent, on average, to 2014.
In large part, that is due to gains in broadband access revenue, which remains the main source of revenue growth for European cable operators, the report suggests. In fact, Solon attributes broadband access revenue for a rebound in operator average revenue per user, which had been dropping.
Revenue earned by offering or higher access speeds, at an average broadband access ARPU of approximately 20€ per month, is the primary reason ARPU now is stable, the Solon report indicates.
