Future of cable TV lies in consolidation

dahamsta

From, guess what? the Irish Independent.

TELECOMS consultant Darragh Stokes has said that the Irish cable market is too small to sustain more than one operator, adding that consolidation in the sector is the only way forward.

Mr Stokes, a managing partner at Hardiman Telecommunications, said that in the current climate with two operators, NTL Ireland and Chorus operating in different franchise areas, the best option is consolidation.

"The Irish market is simply too small," he said. "The only way to compete with TV giant BSkyB is the linking up of the terrestrial cable operators."

According to Mr Stokes, based on third quarter 2002 figures, Cable/MMDS in Ireland was losing 8pc of its customer base at that time on an annual basis, while BSkyB was growing its base by over 16pc.

BSkyB, which is currently not regulated by the Commission for Communications Regulation (ComReg), is also the frontrunner in the provision of digital TV services in Ireland.

He added that clarification on the Government's plans for Digital Terrestrial TV (DTT) is also needed, as this is also a threat to the cable industry.

ComReg said that since 2002 exclusivity in cable broadcasting has been lifted which means that anyone can set up a cable company after applying to the regulator for a licence to operate in any part of the country.

Mr Stokes' comments came on the heels of a story in yesterday's Irish Independentthat NTL Ireland, the Irish business arm of telco NTL, is for sale.

While a spokeswoman for the company's UK parent later denied this, sources close to NTL confirmed to this newspaper that the Irish cable business will be sold as soon as a right price is put on the table.

Chorus, the other cable operator in this country, is also on the market.

NTL Ireland, formerly Cablelink, was purchased back in 1999 for €650m, but it is now expected that it would not command much more than €100m.

It is loss-making and heavily in debt like many other telcos, and has about 380,000 customers here.

Uber-capitalist claptrap. Greed is responsible for the failure of the Irish cable market, not market size, and Etain Doyle's decision to grant local monopoly licences is a key contributor to the existing situation. Investment and strict regulation is the answer, not consolidation. Consolidation will /decrease/ competition by creating a duopoly between the consolidated entity and Sky, resulting in falsely inflated pricing and a dearth of innovation.

I imagine Stokes response would be to cite service consolidation, however Eircom is not currently allowed to provide television services and the cable providers lack of investment in upgrading their infrastructures means that it will likely be a decade before they are in a position to provide cable Internet services to a majority of their reach.

I don't know if there are laws to prevent media outlets being used for shameless propaganda like this, but if there aren't there should be.

adam

DC

Sky is really a monopoly at this stage. You can't call chorus and ntl competition.

Sky think they can charge €60 for Sky world (everything including movies and sports).

I dropped movies and sports last night to drop from €60 a month to €26.99 a month. And people are downgrading in droves. Sky are learning that there is a certain point you cannot go beyond before there is a backlash.

Slightly off topic there. But back on topic, a single cable operator would have to be heavily regulated and there has been little evidence that that will happen in Ireland. Because Sky can charge what they like, it would give a consolidated cable company ammunition when asking for price increases.

Price increases might be worth it if they provided broadband, but the cable companies seem like badly run black holes.