When Broadcom's Docsis 3.0 modem silicon arrives, it could help reduce unit prices and speed MSO adoption

Jeff Baumgartner, Senior Editor

March 18, 2008

6 Min Read
Betting on Broadcom

Broadcom Corp. (Nasdaq: BRCM) has developed a nice niche market for modem silicon that bonds together multiple Docsis 2.0 downstream channels, but it's playing from behind when it comes to the delivery of chipsets based on the full set of Docsis 3.0 specifications.

So far, Texas Instruments Inc. (NYSE: TXN) is the only vendor to have its silicon housed inside Docsis 3.0-based modems that are undergoing official certification tests at CableLabs . Cable insiders believe Broadcom's official entry will bode well for modem pricing, which, at current levels, could slow any broad-scale deployment of Docsis 3.0.

But exactly when Broadcom's Docsis 3.0 modem silicon will be ready for prime time is still a guessing game.

Industry insiders believe Broadcom should have something ready for CableLabs as early as Certification Wave 59 in late March, with product ready to ship in the fourth quarter of 2008. That would position Broadcom to participate in cable's first significant Docsis 3.0 cable deployment window. (See Docsis 3.0 Testing Skips a Beat .)

Broadcom is revealing no details, but it's saying the right things, in case there are any cable operators within earshot.

"I'm not pre-announcing any product," says Jay Kirchoff, senior director of product marketing for Broadcom's cable TV business line. "Broadcom is continuing to invest heavily in 3.0 cable modems, 3.0 MTAs [multimedia terminal adapters], and 3.0 CMTS [cable modem termination system] technology. We are very big believers in the Docsis 3.0 market."

Pricing pressure
Obviously, hardware availability is key to the timing of Docsis 3.0 adoption, but modem prices will play a role, too.

And the price expected out of the gate is considered high -- possibly too high for operators to make high-volume purchases, even though they're prepared to pay a small premium for Docsis 3.0 modems.

Docsis modem and silicon suppliers aren't disclosing prices, but a 3.0 modem today is said to cost up to $80. Industry insiders say MSOs eventually want 3.0 pricing to drop into the realm of 2.0 modems, or about $30 per unit.

"Ultimately, it's a very price-sensitive market," says a cable industry observer.

Plus, MSOs have long memories. They won't soon forget that when Docsis 2.0 modems first came on the scene, they actually cost less than CPEs based on Docsis 1.1, thanks in part to some additional silicon integration and a decrease in the cost of materials. Although many operators did not take advantage of the full capabilities of Docsis 2.0, such as its dilated upstream, it became an easy economic decision for them to start buying and deploying 2.0 modems exclusively.

Similarly, if Docsis 3.0 modems get to the right price, some MSOs may begin to seed their systems with 3.0 modems at a small premium over 2.0 before they upgrade their CMTSs or even offer Internet services that use channel bonding.

Broadcom's arrival could help that happen faster.

"Typically, Broadcom… comes down the cost curve quicker," says one source from the cable vendor community. "I would tend to think that Broadcom, once they've got it all taped out [will] be hitting the cost points."

To Page 2

"We're taking a little longer than some other people to actually introduce 3.0 product," Broadcom's Kirchoff admits. When Broadcom does announce its 3.0 platform, it will hit a price "that fits in [operator] budgets, and more cost-effectively than the costs they're hearing now," he insists.

But don't expect 3.0 modem prices to fall below those for 2.0, Kirchoff says, because 3.0 gear has to follow tighter power requirements for transmitting multiple channels upstream. It also houses more memory.

Broadcom is also believed to be banking on modem silicon that can handle eight bonded downstreams, versus 3.0's minimal configuration of four.

Kirchoff declined to say anything about that. But his comments about fiber-to-the-premises (FTTP) competition suggest that cable operators will need more than the minimal 4x4 configuration of Docsis 3.0. "It's difficult for me to see how that configuration could compete effectively with a GPON-based network," he says.

MSOs want EMTAs
Unit pricing aside, cable MSOs will prefer to deploy Docsis 3.0-based embedded multimedia terminal adapters (EMTAs) over stand-alone data modems, because VOIP is key to their service bundling strategies.

But 3.0 EMTAs are on the way, even if initial pricing isn't being discussed yet. In January, Arris Group Inc. (Nasdaq: ARRS) announced a Wideband EMTA called the Touchstone TM702. Motorola Inc. (NYSE: MOT), meanwhile, has introduced a new Docsis 3.0 CPE line, including two EMTA models: the SBV6120 and the SBV6220. (See Calling Docsis 3.0 and Moto Calls Up Wideband CPEs .)

MSOs would like to see EMTAs come in at about $50 per unit, but it's believed that vendors may not be able to hit that for another 18 months.

Bonding with 2.0
In the interim, Broadcom has cultivated a sizeable market for modems that fuse up to three Docsis 2.0 downstreams using silicon originally developed for inclusion in advanced cable set-tops. Last week, the company announced it had shipped more than 1 million of those units, which include the BCM3255 and BCM3381 chipset families. Between those two, the BCM3255 has more set-top interface features, such as QAM modulation for video channels. (See Broadcom Bonds With Docsis.)

It's believed that Hanaro Telecom Inc. of South Korea has received the bulk of those shipments. Some European cable operators have also deployed some of those units, but industry insiders have questioned whether adoption will continue as 3.0 technology matures.

Thanks to initial volumes, there's a cost advantage for those modem products, believed to be in the area of $65 per unit. The lifetime of those products may be limited as operators consider services that can offer speeds well north of 100 Mbit/s, but Broadcom still considers 2.0 bonding a good niche to pursue until the full 3.0 market opens up.

In fact, Broadcom feels that work has given it a healthy start on 3.0. The company expects it will be able to reuse much of the software in the BCM3255 and BCM3381 in its upcoming Docsis 3.0 chips. It's also started to build in support for IPv6, another key Docsis 3.0 feature, into its 2.0 modem products.

— Jeff Baumgartner, Site Editor, Cable Digital News



Interested in learning more on this topic? Then come to Docsis 3.0 Strategies: From Product Development to Service Deployment, a conference that will take a comprehensive look at the cable industry's plans to roll out its next-generation architecture around the world. To be staged in Denver, March 19, admission is free for attendees meeting our prequalification criteria. For more information, or to register, click here.

About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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