Solid operating performance boosts European MSOs

The European cable sector is broadly in good health despite the economic downturn, according to Moody’s. The credit ratings agency notes that it is telephony and internet services, not TV, that are driving growth.

Many of Europe’s cablers are also focusing on driving down debt over the next 12 to 18 months so that they have a wider selection of financing options with potential lenders when current agreements expire.
Moody has a stable rating on six of the seven cable companies it covers: Virgin media, Unity Media, Kabel Deutschland, Telenet, UPC and Liberty Global. The only negative rating it holds is on Spain’s Cableuropa.

Both Kabel Deutschland and Virgin Media have been upgraded from negative in the past six months.

Moody’s noted that competition in the telephony and broadband sectors was fiercer than that in the TV sector, but that video remains challenging. “The competitive environment of the cable companies will remain intense,” noted Moody’s senior analyst Evgenia Brown. “Historically, cable companies competed with satellite operators for their video services; now, competition comes from several angles.”

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