Triple play bundles are leaving Europe’s cable operators in good shape, boosting ARPU and cutting churn, Moody’s Investors Services claim.
The investment firm predicts cablecos will match 2010 revenue growth in 2011 and 2012, with rises in the range of 5% to 6%, and will enjoy strong liquidity on the back of demand for combined Internet, TV and telephony packages.
“As EBITDA generation grows, we expect the rated companies to deleverage further and free cash flow generation to improve in 2011 and through 2012,” analyst Gunjan Dixit says.
Despite the positive outlook, Moody’s cautions that any fight back by incumbent telcos could pare the cable operator’s revenue growth back to under 3%. However, Dixit explains the firm doesn’t expect such a scenario to emerge in the next 12 months to 18 months.
While the investment firm sees risks from 4G networks and rising adoption of Web-based TV in the longer term, it predicts that significant subscriber losses are unlikely.