Cableís Hunger Games
I face a difficult task in following Jeff Finkelsteinís latest insightful post, in addition to a number of fantastic articles debating the merits and shortcomings of various broadband technologies at cable operatorsí disposal. Iíll do my best, however, and hope that my thoughts can generate just half the responses! (See: Viewing Things in a New Way.)
As an industry analyst, there has never been a more interesting time to be examining and forecasting the next steps for cable broadband networks. Broadband networks and services have never been more important to the continued success of cable operators both in North America and globally. For most cable operators, continued declines in pay TV subscribers mean broadband has become their lead business.
Indeed, broadband isnít just a service in its own right. Itís a foot in the door for voice, multi-screen video, home security, and automation. As cable operators discovered when they rolled out digital voice services, there remains significant demand for revenue-generating services delivered via a broadband connection -- not just the connection itself.
And if amplified technology and architectural debates are any indication, the entire industry already understands the critical importance of broadband and IP to the ongoing success of cable operators.
A major part of my job is to quantify whether these big-picture trends and long-term business philosophies are being turned into reality by the appropriate infrastructure investments. In the case of cable operators, has there been a significant increase in the purchase of DOCSIS downstream and upstream channels on cable modem termination system (CMTS) platforms?
The answer is a resounding yes. From CY08 to CY12, the total DOCSIS channels purchased more than doubled, from 805,000 channels globally to almost 1.7M. This timeframe is also the heart of major DOCSIS 3.0 rollouts, as well as the beginning of cable TV subscriber declines.
(Interestingly, cable operators arenít paying any more for this added capacity. In fact, annual CMTS vendor revenue during this time basically stayed flat. Two for the price of one ainít half-bad.)
With Converged Cable Access Platform (CCAP) deployments already underway -- albeit as glorified, super-dense CMTS and edge QAM platforms -- the growth curve for total channels is expected to accelerate, doubling again by 2016. Thatís a tremendous amount of bandwidth to have at your disposal. Although it will get used up quickly, thanks to node splitting, service group size reduction, unicast and/or multicast video, and home automation.
And that will be that for DOCSIS 3.0, as the silicon will max out in terms of performance. Thatís why DOCSIS 3.1 has so much momentum. Already, operators are preparing their plant for DOCSIS 3.1, expanding available spectrum to support 1024 QAM and, potentially, 4096 QAM, which is what DOCSIS 3.1 silicon is expected to be support.
Of course, the impact of DOCSIS 3.1 on total CMTS/CCAP channels shipped is difficult to project. But I estimate there will be a doubling of purchased channels probably in two years, as opposed to the four years that weíve seen recently. And thatís just the baseline. I suspect that estimate will be blown away once DOCSIS 3.1 line cards and CPE become more widely available.
Beyond this linear transition from CMTS to CCAP and from DOCSIS 3.0 to DOCSIS 3.1 is a wider discussion of distributed architectures and pushing CCAP MAC and/or PHY capabilities into the optical node. Iíd like to table that discussion for another post. Suffice it to say that there are lots of fascinating perspectives on this topic from a growing list of companies positioning themselves for whatís expected to be a major change in cable access network architectures.
— Jeff Heynen, Principal Analyst, Broadband Access and Pay TV, Infonetics Research.