It only took the best part of 18 months and one of the most disruptive horizontal mergers in history, but trade association Cable Europe has finally become GigaEurope – in a bid to revitalize an industry which increasingly looks like a deer in the headlights. News of the rebrand was delivered through gritted teeth on stage at Cable Congress this week, which does not exactly evoke confidence for the new-look cable policy string-puller.
Cable Congress, otherwise known as the Liberty Global back-patting party, therefore took on a different persona this year – dominated heavily by Vodafone and mobile conversations since the telco acquired Liberty’s cable assets in Germany to become the country’s largest owner of gigabit-capable network infrastructure in Germany—controlling 80% of cable. The rebrand to GigaEurope also helps Vodafone promote its GigaTV service which will replace Liberty Global’s Horizon TV in Germany.
GigaEurope will serve as an umbrella company to promote the vested interests of its two founder powerhouses Vodafone and Liberty – which can be mainly interpreted as cable and mobile buddying up. The impression Faultline picked up within the opening couple of hours of Cable Congress was that putting pressure on policy makers and regulators in Europe is high on the agenda for GigaEurope and its founding communications behemoths which also includes Liberty Global subsidiary Telenet. Defending against Deutsche Telekom’s opposition to Vodafone’s purchase of Liberty cable assets, alongside a bunch of smaller German cablecos, is likely the immediate priority.
“We have concluded that the cable industry needs like-minded companies to change the nature and structure of Cable Europe to focus on fixed mobile convergence and establish a strong narrative for Gigabit speeds,” was the consensus from Executive Chairman of Cable Europe, Matthias Kurth, speaking at Cable Congress in Berlin this week.
Clearly then, Manuel Kohnstamm, President of Cable Europe and Chief Corporate Affairs Officer at Liberty Global, got exactly what he wanted. Revisiting last year’s Cable Congress, held in March 2018, Kohnstamm’s surprise opening gambit was “we have been debating rebranding”. Kohnstamm at the time took an open approach, talking about adapting in order to rebuild consumer faith in aging cable brands and legacy technologies, as fiber and mobile networks slide in. He called for more innovation in the cable industry, increased partnerships and for private investors to get on board, instead of complaining about the growing threat from internet giants. We now know the hidden motive was to cash out in Europe and pursue mobile ventures in Latin America, in doing so allowing a telco behemoth to control a huge chunk of Europe.
Much of the same topics about cable working with fiber and mobile players, not against them, was evident again at this year’s show.
Ironically, during the opening session, Kohnstamm proposed the question, “What is OTT going to do to our industry?” Unfortunately for Kohnstamm, the truth is that OTT has been taking chunks out of cable TV years before he noticed. So why only now, in 2019 and after selling a huge chunk of its business to Vodafone, does a top Liberty Global executive ask this question? Because the damage is done.
“We feel a sense of optimism that we can cope with OTT because we cope with everything the industry has thrown at us. We are the aggregators of the industry and we are on a good track,” was the predictable answer from Kohnstamm to his own question.
As we mentioned, influencing policy makers is a GigaEurope priority. “Governments don’t see enough potential in digital growth. The new commissioner will hopefully work in earnest to allow for frequency spectrum auctions, but we want these to be moderate and for the focus to be on network evolution,” said Kurth.
As such, GigaEurope will advocate policies to promote the Digital Single Market to boost competition (ironically given UPC-Vodafone reducing competition) and encourage innovation.
Later during day 1 of Cable Congress, Vodafone’s Group External Affairs Director, Joakim Reiter, took the stage. “We want horizontal regulation. The new commission will support one set of rights – online and offline – for consumers,” said Reiter, highlighting security to be of “absolute importance” to Vodafone going forwards with its new German cable responsibilities. “We call on all operators to join GigaEurope. Although the actual details of GigaEurope are still to be worked,” Reiter added, to hushed groans in the audience.
Hannes Ametstreiter, CEO of the Vodafone Germany business, kicked off with describing his obsession with cable, having acquired 5 cable companies when at the helm of Telekom Austria. “It’s fascinating to see the consolidation, the fiber investments, and more content, but cable has the opportunity for more competitive pricing versus fiber. To this end, GigaEurope can be part our digitization process,” he said.
GigaEurope ultimately embodies Liberty Global covering its tracks as it flees Europe – disassociating itself from Cable Europe in the process to reflect the Vodafone branding.