According to reports, Germany has been slow to turn off its analog cable networks, with only 38 percent of cable subscribers on digital services. This is in stark contrast with other European countries, such as the UK, where the dominant cable operator, Virgin Media, has effectively ceased transmitting in analog. It also contrasts with terrestrial broadcast in Germany, because analog transmission ceased in November 2008, as well as satellite, where 80 percent of subscribers are digital, according to the report “Germany - Telecoms, IP Networks, Digital Media and Forecasts" by international reports and analysis group Research and Markets.
In fact, some German cable operators are deliberately dragging their feet over analog switch off to retain some competitive edge in an increasingly crowded market. By retaining analog services alongside digital, they can provide access to secondary TVs in bedrooms and elsewhere in the home without requiring another set-top box or some form of home network deployment. So while retention of analog is not sustainable in the long term because it consumes too much spectrum, which will restrict the rollout of HD channels, it is helping cable operators retain some customers for now. Indeed, according to the Research and Markets report, cable operators in Germany have been correspondingly slow to get into the high-speed broadband market, collectively having only 10 percent. At the same time, competition is becoming even more intense, with two big hitters, Vodafone and Deutsche Telekom, entering the cable TV market in 2011, in their case, to diversify in the face of growing satellite and IPTV competition.
Both satellite and IPTV are expanding in Germany, but IPTV is nowhere near as successful as in France, where it will only reach 10 percent penetration of the country’s whole pay-TV market by 2012. Meanwhile, both terrestrial and satellite have both been growing slowly, with the proportion of terrestrial households up from 9 percent in 2005 to 17 percent at the start of 2011, and satellite rising from 41 percent to 46 percent over the same period.
In the longer term, it looks like economic and regulatory conditions are going to favor IPTV and perhaps over-the-top (OTT) delivery in Germany. The government's broadband strategy specifies that data rates of 50Mb/s must be available to 75 percent of households by 2014, which can only be achieved by a massive fiber build out. This has led to sympathetic regulation, according to Research and Markets, coupled with prices controlled by existing market forces that are expected to stimulate investment by operators and help the government achieve its broadband goals.
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