Where Now For UK Cable?
 

This actually arose out of another thread, I posted an answer then made a huge diatribe about UK Cable.

Got rid of that and going to put it here instead.

Essentially trying to encourage some debate on where UKCable can go from here really :)

It centered around the Talk Talk deal and other special offers that are going and how it's all going on price. Why is ntl constantly discounting now, is it showing up that they can't compete in any other way?

The entire UK internet market is potentially shafted now and we're likely going to have endless clones offering mass market crap service for as low a price as possible. The hope for UK Cable is that they continue to push ADSL on speed as well as price, and innovate rather than cutting corners.

Another huge issue for UK Cable is they are making a mistake trying to compete with the a la carte broadband. If their other products were up to scratch they should be able to sell more on triple play / bundling.

However while the TV is still a poor cousin compared to Sky, the telephone and customer service not very good compared to BT, and the various deficiencies in billing, etc, remain they are stuck having to discount everything. They should be investing in enhancing their services rather than having to discount because their services can't stand up to the competition.

Losing customers that want to pay as little as humanly possible should not be considered a bad thing just because it doesn't look good on the figures. Last I checked business is about the profit you generate not the revenue and unprofitable customers shouldn't be customers.

With the advent of LLU I imagine they are probably regretting not building out more as well. However much cheaper it may be to unbundle and hope for the best it'll never be able to deliver what a modern 2 way HFC / FTTH network could.

Coverage in existing areas is for want of a better word crap as well. There are 3.17 million households in London, largest city in Europe. Thanks to a poor initial build and an inexcusable failure to build any more as new developments have gone up only 58% of those households can get triple play over cable. Thanks to ongoing investment from Bulldog, Easynet, Homechoice and Be 95% of households can get LLU service, with basically all of those being able to take an ADSL2+ service which would for most be vastly faster than ntl/Telewest's 10Mbit.

Bear in mind of course that while the cable rollout has completely ceased Easynet are planning a full build of 1000 exchanges covering 70% of the UK population, this is of course with the backing of BSkyB. Bulldog have over 800 exchanges and counting, Be have an aggressive rollout plan, as do Wanadoo and Tiscali. LLU has already surpassed cable nationwide for availability and inevitably will be overtaking it region by region as time goes on.

Of course cable has the deep fibre advantage. Then again BT have been trialling fibre to the home and VDSL with fibre to the street cabinet. When they start actually rolling that out there goes the deep fibre advantage.

We'll see if ntl can reverse the long term trend of having their backsides kicked by Sky for TV, by ADSL for broadband and by BT for telephone. Telewest have faired somewhat better nonetheless the comparison doesn't flatter them particularly either. Cable uptake in the UK is very low compared to elsewhere. Anomalously low.

Here come the stats ;)

Source http://www.ofcom.org.uk/research/cm/...ns_regions.pdf

Accurate as of 31st December 2005, which works for ntl and Telewest

Ofcom report states there are 24.77 million households in the UK.

50.8% passed by cable
45% passed by digital cable

There are 3.3 million cable TV subscribers, of which 2.6 million are digital.

98% have digital satellite available, 77% Digital Terrestrial Television.

32% of UK households have digital satellite, 21% DTT, 10% cable. Cable has a lower uptake of television services than DTT or Satellite. This gap is increasing.

Internet wise...

Source = respective companies end of quarter reports.

Telewest end of year

Broadband Internet penetration 22.2%
4.525m homes marketed
1.005 million subs

ntl

Broadband Internet penetration 25.7%
7.0884m homes marketed
1.8239 million subs

UK Cable total penetration 24.36%

BT
Broadband Internet penetration 28%
24.6709m homes serviceable
6.9 million connections

BT have around 8 million connections right now, increasing their takeup to approximately 33%.

Things don't look at their greatest for UK Cable, already in a not inconsiderable amount of debt again due to the over 4 billion USD spent buying Telewest's shareholders out along with the debt acquired from Telewest.

It's hard to see where ntl:Telewest can go from here. Obviously the powers that be do have something interesting in mind for them somewhere along the line, however all the signs point to a more competitive market all around for them, with them being squeezed more on all of their services.

I'm far from convinced that 'quadruple play' will solve anything, especially as in ntl's case they are only able to shift triple play to less than 10% of their marketable homes.

Then there's the joys that the existing CATV networks will be reaching end of life soon, and components will start to degrade. Where to from there? Will the money even be there to replace the components in a timely fashion? Ideally a fibre to the home deployment. Maybe switched CATV or ethernet to the home. We can hope so, as without something very interesting and seriously market disrupting one cannot see how cable will be able to compete.

That's my opinion anyway!

Re: Where Now For UK Cable?
 

Cheap broadband providers come and go. Promises of revolutionary speed are repeatedly made.

Yet where I am I'd probably max out at about 6mb. Download caps are useless to me so that rules out most fast internet providers ADSL.

Blueyonder has consistently offered me fast, reliable, uncapped broadband with speed upgrades almost annual now.

I'm not going to move for a theoretical speed increase to an unproven service who have little/no potential to give me a speed boost in the near future.

Cable TV may be a "poor cousin" but I've it time and again said that Telewest TV outsells Sky where customers have a choice of both. I don't know if the same is true for NTL.

Remember Sky's "8 million" includes around 700 000 in the ROI and god knows how many on the Costa Del Sol.

Re: Where Now For UK Cable?
 

None of the ROI figures were included, this was purely UK.

What you say might be the case, the Ofcom figures suggest otherwise but they aren't specific enough to say either way 100%.

LLU operators are fairly large organisations, UKOnline / Easynet and Bulldog especially are well financed and part of a much larger group. The technologies they use are mature, stable and well documented international standards.

Re: Where Now For UK Cable?
 

Nice collection of figures there :tu:

but

Whereas expansion of the opposition is threugh ADSL2+, ntl are 'set' to use DOCSIS 3.0 next year. The connections that could be offered vs ADSL/2+ will batter them into oblivion.

When people have the opportunity of 24mbit vs 100mbit, that is going to sway some. This is the inherrrent advantage that cable has above LLU, that it is one step ahead with its speeds. I'm not saying that its the breadwinner all round and everybody is going to convert to cable, I'm just saying the broadband product, hopefully, will be better.

Re: Where Now For UK Cable?
 

Finally someone who seems to be thinking what I am thinking.

From here it looks like ntl is in big trouble, they couldnt rollout 24mbit to compete with adsl2 without some kind of investment, 1 24mbit connection would rip apart the current technology used for the ubr's. Adsl has a good advantage for isp's in that distance will reduce speeds for most customers leaving them less of a problem with contention, but with cable if they rolled out 24meg anyone who buys it will have a line capable of the speeds.

Also like yourself I think the broadband market here has gone sour, its all focusing around cost now and everyone has gone to competing on price, we are going to be seeing near free services and anyone who tries to charge a suitable price is not going to get any market share. Bulldog who have spent large amounts in their network have not had their reward for it with a very low amount of customers yet isp's who just let their network congest more and more have users flocking to them.

Ntl appear to be out of cash, solution to full ubr's traffic shape, solution to analogue only area maybe pull out of area come analogue switch off day. solution to customers who notice how bad things are discount them. All these solutions avoid investment. I still dont understand the acquisition of telewest and the merger with virgin it appeared they had some cash available to them and they have wasted it on buying customers. They probably thought tightening things up by raising prices this year would sort out their profit, but almost at the same time the adsl market prices have plummeted which couldnt have been worse timing for them, this must have seriously lowered the value of the telewest acquisition since each customer is now worth less. Also tightening things up is useless if they continue to allow the rampant discounts been given out with no contracts whatsoever. Their earning potential is seriously hampered by having services not properly rolled out. I keep saying it again and again they should take the pain invest in their areas that need it and make all their services universal, so they have the same products available to every customer for the same price. If a customer doesnt want to pay that price then cut them loose. Only today their arrogance is evident in that the price change leaflet I got with my bill lists prices for digital tv with no mention of analogue anywhere (in an analogue only area). Ntl are behind on tv, behind on phone, and now falling behind on broadband. For a number of years they had a superior infrastructure for their broadband but due to lack of investment time has caught up with them and they have minimal upgrade potential left to give to customer.

The future? Ntl are limited by their coverage and the only way they are going to be able to compete in the future the way things are going is becoming the budget option for people because on a technical level and quality of service they are just in the slow lane.

---------- Post added at 16:25 ---------- Previous post was at 16:24 ----------

they not set to use anything, they trial alot of things including docsis3, but rolling it out is a different story and requires cash.

Re: Where Now For UK Cable?
 

I look forward to the day ADSL pricing gives me the option to change for a 'better' service. Anything that gives me what I get now cheaper is welcomed no matter what the technology. I don't see it any time soon though.

These companies are having to shell out just to match cable at the minute.

Cable are currently the market leader in broadband services. I can't see them giving it up too quickly.

They could provide some kind of competition with Sky if they focussed on VOD services, especially HD VOD. Sky have made their aspirations clear with an expensive box and expensive subscription. Cable could squeeze in somewhere if they struck a deal with the terrestrial broadcasters for HD versions of BBC/ITV/C4/Five's best shows over VOD.

Re: Where Now For UK Cable?
 

OK. They have no cash. They only just bought out Virgin with how much cash?

-- kthnxgg --

Re: Where Now For UK Cable?
 

they didn't buy Virgin with cash, they did a deal that arranged for Richard Branson to be the majority shareholder in the new company & increased the amount of money they owe. The people underwriting the deal will want paying back - that money will always paid out before any investment in infrastructure is allowed...

Re: Where Now For UK Cable?
 

If a customer is paying say £17.50 a month for discounted 10meg broadband then I doubt they are making a loss at this. Broadband costs very little to provide, once the infrastructure is in place. They don't have to pay for content (like TV).

If they're wasting my £17.50 a month by ****ing it against a wall then I don't see why I should care.

They're doing fine at current prices. We'll probably be paying about £5 a month next year, so they'll have to cope. Perhaps they just need to shovel a few more staff out to get the overheads down more.

Re: Where Now For UK Cable?
 

There we have to disagree.

I'd describe neither cableco as market leader as their premium packages are both slower and more expensive than their ADSL equivalents.

Bulldog's 16Mbit uncapped deal is as available as cable broaband and cheaper.

UKOnline's coverage isn't as high but again faster and cheaper.

Telewest's upstream on their 10Mbit deal is pathetic and needs increasing.

---------- Post added at 21:14 ---------- Previous post was at 21:11 ----------

Actually a more appropriate point would have been that ntl had just bought out Telewest with how much cash...

Therein lies the problem. They paid 4 billion USD in cash, over a billion in shares and took on a fair whack of assumed debt.

The combined company is now worth 7 billion USD.

Most of the above wasn't cash from the bank, it was debt. Again rather than invest in infrastructure, etc, ntl ****ed away their cash on acquisition.

They need to get the cost reductions going as ntl still aren't a profitable business and they need to get profitable and get investing fairly rapidly.

Of more concern is that some of the things that made Telewest more profitable are being chopped in the name of attracting customers. One particular thing of note being that while Telewest do actually credit check customers and will refuse to install to those who present a risk ntl will quite happily install to anyone regardless. Telewest employees are getting the same targets as ntl ones now, even though they have different criteria. ntl have been known to let people off of arrears on their bills to retain them as customers. Again the figures are everything, apart from the profit column.

---------- Post added at 21:19 ---------- Previous post was at 21:14 ----------

Indeed. For now. BT's 'autumn trial' this year is probably going to be VDSL. Then you have the FTTH trials. As I stated above BT will as part of 21CN be trialling deeper fibre into their network.

Worth remembering that while rollouts are 'on the road map' we don't know how the trials are going yet.

Re: Where Now For UK Cable?
 

market leader? sounds like ntl's pr team.

If the market leader is 0.5mbit speeds in the evenings then the uk broadband market really is in a dire state.

it does cost money to provide broadband in the form of traffic and providing the modems as well as supporting the service, granted the modems are very cheap but if you are downloading anything above a few gig a month then ntl are probably not making anything worthwhile from you as a discounted customer.

what I dread is if ntl win premiership football rights in 2007 because right now I can get it via sky sports, if ntl get rights they will likely stick it on a channel that is only available on the digital platform and cutoff even more of their customers from a service.

Re: Where Now For UK Cable?
 

My broadband connection is 4MB uncapped and rarely deviates when using websites that have enough bandwidth.

Maybe I'm just on the wrong exchange, but I just had a look and all Bulldog can offer me is 2MB unlimited broadband. Same with UKOnline and Be won't even sell me anything. Great for the people who do have the choice but I'm not one of them. I wonder if part of the reason cables broadband is slower is the fact they know what proportion of their customers can actually get these services.

I don't exactly live in the middle of nowhere either.

The cable co. has more broadband customers than any other ISP, so that was why I used the term "market leader".

Re: Where Now For UK Cable?
 

OK, I apologise if If I came across as if it was free cash flow :) However, as the direct competitor though I am not aware of how profitable operations of the BT Group are, they don't exactly owe nothing either.

OK the day FTTH comes with BT.....................I will get it ;)

Re: Where Now For UK Cable?
 

FTTH ?

Fibre to the home ?

Re: Where Now For UK Cable?
 

Yes.