Telecomms operators in Europe could be forced to axe their cable interests if an EU-commissioned report decides this would promote free competition in the cable industry.
The EU has commissioned consultancy Arthur D Little to examine whether telecomms suppliers should divest their cable operations to allow independent cable firms to compete more freely.
Much of the cable market in Germany and France is owned by the national telcos, Deutsche Telekom and France Telecom. Deutsche Telekom controls 90 per cent of Germany?s cable TV infrastructure while France Telecom owns more than half its market in France.
Independent cable operators find it hard to compete there - for example, in Germany, Deutsche Telecom owns the cable transmission network.
Owning a significant share of the national cable market could prevent such telcos from competing in the US. US regulators are less keen to allow foreign companies to operate if their home markets are closed, said John Davidson, an analyst with the new media group at Ovum. ?It could benefit them if they did divest their cable interests - it depends how tightly they want to retain control,? he said.
PTT Telecom Netherlands recently decided to divest its cable holdings while BT got rid of its cable interests in the late 1980s, although it still owns one such operation, called Westminster.
Arthur D Little will spend six months on the report.
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