Cable MSOs Face a Growing Bandwidth Crisis, New Report Finds
Switched digital video technology is emerging as the best short-term solution to the cable bandwidth crunch and will be widely deployed over the next two years, according to Heavy Reading
NEW YORK, Dec. 14 /PRNewswire/ -- Surging demand for high-definition TV, video on demand, time-shifting video services such as digital video recorders, and Internet video is rapidly depleting bandwidth reserves on cable networks and will force cable MSOs to upgrade their networks with new technologies aimed at conserving and reusing network bandwidth, according to a major new report from Heavy Reading (http://www.heavyreading.com/), the market research division of CMP's Light Reading (http://www.lightreading.com/).
Switched Digital Video & Cable's Looming Bandwidth Crisis explores the cable industry's bandwidth crisis, focusing on the emergence of switched digital video (SDV) technology as a solution to the cable bandwidth crunch. The 52-page report examines the cable industry's plans to test, refine, and deploy SDV technology as quickly as possible over the next two years. Based on direct interviews with the seven largest U.S. and Canadian cable operators and more than a dozen technology vendors, the report takes a close look at the early SDV trial and rollout strategies of leading North American MSOs and forecasts their progress through the end of 2009.
Leading cable MSOs profiled in this report include: Cablevision Systems, Charter Communications, Comcast, Cox Communications, Rogers Communications, and Time Warner Cable.
Cable technology suppliers analyzed in this report include: Arris Group, BigBand Networks, Casa Systems, C-COR, GoBackTV, Harmonic, LiquidxStream Systems, Motorola, RGB Networks, Scientific Atlanta (a subsidiary of Cisco Systems), Tandberg Television (a subsidiary of Ericsson), Teleste, and Vecima Networks.
"Cable network operators have come to realize that customer demand for bandwidth, which has been climbing faster and higher than anyone expected, will soon outstrip their ability to supply that bandwidth with technologies now in place," notes Alan Breznick, Senior Analyst with Heavy Reading and author of the report. "Competitive pressure from satellite network operators and telco IPTV providers will force cable MSOs to find solutions to their bandwidth problem sooner rather than later."
Cable operators are evaluating an array of new technologies to expand their overall radio frequency (RF) capacity and use existing bandwidth more efficiently, Breznick says. "Over the past year, SDV has emerged as the leading choice on this menu -- beating out such alternatives as fiber node segmentation, MPEG-4 video encoding, improved quadrature amplitude modulation, plant upgrades to 1GHz capacity, out-of-band spectrum overlays, and deep-fiber drops, among others," he says.
Although SDV is now a frontrunner in the MSO bandwidth efficiency race, its long-term success is far from certain, Breznick says. In addition to questions about technological complexity, the cost associated with deploying SDV on a wide scale may be higher than MSOs now anticipate, he warns: "At least one large North American cable company estimates the price tag to be as high as $32 per home passed, which is double the early estimates for SDV deployment."
Other key findings of Switched Digital Video & Cable's Looming Bandwidth Crisis include the following:
North American cable operators will roll out SDV in a big way in 2008, after several cautious years of lab tests, field trials, and limited pilot deployments. The two largest MSOs, Comcast and Time Warner Cable, both plan to introduce the technology in most, if not virtually all, of their markets by the end of 2008; while Cox and Charter, which have just started deploying SDV commercially, intend to expand to several more markets in 2008.
SDV will be deployed to the majority of North American cable households by the end of 2008. Based on interviews with the leading MSOs and equipment vendors, Heavy Reading expects SDV deployments to cover as much as 60 percent of the entire North American cable footprint by January 2009. This total could then rise to 75 percent or more by January 2010.
Early trial deployments of SDV confirm its bandwidth-saving potential. In market trials and pilot deployments, several North American MSOs report digital spectrum savings of close to 50 percent, just as they had hoped. Vendors report that some customers are already realizing bandwidth efficiencies of 60 percent or more in select cable systems.
SDV may well prove to be just a temporary solution to cable's bandwidth issue. While SDV will buy the industry time by freeing up some digital spectrum for other, more profitable uses, the technology won't actually create any new bandwidth for MSOs, particularly on the critical upstream side.
Cable operators will need to continue to pursue other technology options along with SDV to improve bandwidth efficiency in their networks. MSOs will likely have to combine SDV with a number of other techniques -- including reclamation of more analog channels, further node splits, MPEG-4 compression, 1GHz plant upgrades, and 3GHz spectrum overlays -- to create enough bandwidth for all of the HD, niche programming, and other new digital services they need to deliver to meet competitive threats from satellite and telco IPTV service providers.
Switched Digital Video & Cable's Looming Bandwidth Crisis is essential reading for a wide range of industry participants, including the following:
-- Cable technology suppliers: How will the looming bandwidth crisis affect cable MSO technology deployment plans? When is the market for SDV likely to develop, and what's the most likely timeframe for SDV rollouts? How will the emergence of SDV affect other technologies that are being proposed to increase bandwidth efficiency for cable MSO networks? Where are the emerging opportunities to grow market share? Are your products and marketing messages in line with cable MSO plans and expectations? Are there significant gaps in your product-line coverage that need to be addressed to meet future demand from cable MSOs regarding bandwidth efficiency? -- Cable network operators: How do the current options for improving bandwidth efficiency compare with one another in terms of cost and effectiveness? How are other cable MSOs approaching the bandwidth issue? Are their plans and expectations in line with your company's approach? Which technology suppliers are in the best position to meet your company's requirements regarding bandwidth efficiency? -- Investors: Which technologies are emerging as the winning solutions for cable MSO bandwidth efficiency, and which companies are the leading providers of those solutions? How will the need for new technology and infrastructure buildouts affect profitability for the cable MSO sector in the coming months and years?
Switched Digital Video & Cable's Looming Bandwidth Crisis costs $3,995 and is published in PDF format. The price includes an enterprise license covering all of the employees at the purchaser's company.
For more information, or to request a free executive summary, contact: Dave Williams Sales Director, Heavy Reading 858-485-8870 [email protected] Press/analyst contact: Dennis Mendyk Managing Director, Heavy Reading 201-587-2154 [email protected] About Heavy Reading
Heavy Reading is an independent market research organization offering quantitative analysis of telecom technology to service providers, vendors, and investors. Its mandate is to provide the comprehensive competitive analysis needed today for the deployment of profitable networks based on next- generation hardware and software.
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SOURCE: Heavy Reading
Web site: http://www.heavyreading.com/