Wireless could pose threat to cable, say execs

Aggressive marketing of mobile broadband by wireless telephony operators could pose a threat to cable’s business model, UPC Austria CEO Thomas Hintze told delegates at the ANGA Cable Congress in Cologne yesterday. “I think wireless is the single biggest threat to our industry,” said Hintze.

Hintze said that over 30% of all broadband connections in Austria were now via wireless networks, and that 75% of those customers had no fixed broadband connection at all. He said that dial-up customers who were not heavy internet users had moved direct to mobile broadband, bypassing fixed broadband offers, because of the aggressive pricing and bundling strategy of mobile network operators. Hintze said the incumbent, Telekom Austria, had been forced to offer its own product bundles at a low price in order to stem the flow of subscribers away from fixed-line services. This in turn led UPC to drop its own prices to compete. “We felt that reaction. This led to an erosion of ARPU,” said Hintze.” He said that UPC would also develop a wireless strategy of its own in order to compete.

Sven-Erik Davidsen, CEO of Canal Digital Norway, speaking on the same panel at ANGA, agreed with Hintze. “Telcos have to defend themselves and that can lead to a dangerous situation,” said Davidsen. “It puts pressure on our ARPU and the business model, and it’s not very good for the future development of [broadband] infrastructure.”

Martin Kull, chief technology officer at Com Hem in Sweden, said that aggressive marketing of mobile broadband in that country had delivered over one million mobile broadband subscribers in a country of nine million people. Com Hem has struck a deal with 3 to deliver its own mobile broadband product.

However, Parm Sandhu, CEO of German cable operator Unitymedia, said that the situation varied from market to market. He said that in Germany, two of the leading mobile providers also had fixed networks and therefore had little incentive to cannibalise their own business.