In the cable sector, upgrades only buy so much time, as does the new HEVC standard. A 50% efficiency or capacity gain is nice, but it's wiped out after two years of traffic growth.
Looking at Ziggo and UPC Netherlands, we indeed see things moving:
- At UPC NL, capex almost doubled in 4 years time.
- UPC NL is stating publicly that EBITDA (OCF) margins are permanently going down.
- At 13Q3, UPC NL's revenue was down 4.0%, while 'opex' (content rights, network ops, interconnect, customer ops) was up 7.4%.
- At Ziggo, capex is doubling in 3 years time.
What could be happening underneath, is cable companies preparing for the inevitable: IP (besides DVB) and FTTH (fiber deep). UPC has its Horizon smart STB out, which is fully IP-ready. And when adding homes passed in newly built areas (roughly 10k per annum at UPC and 15k at Ziggo), they have started laying empty ducts besides the coaxial local tails.