A Decade of Docsis
This truly was a big deal because it sparked cable's high-speed Internet era with a non-proprietary, interoperable system that eventually drove down modem costs and plowed billions of dollars into cable's coffers. On top of that, Docsis also created the foundation for another significant growth engine: voice over IP.
And now cable has millions of new subscribers to show for it. Among some of the biggies, Comcast Corp. (Nasdaq: CMCSA, CMCSK) now has 14.9 million high-speed subs, and is leading the charge toward speedier Docsis 3.0-fueled services. Its 6.47 million residential voice customers now make it the third-largest phone service provider in the U.S., surpassing Qwest Communications International Inc. (NYSE: Q). (See Comcast Passes Qwest.) Time Warner Cable Inc. (NYSE: TWC), meanwhile, wrapped up 2008 with 8.4 million modem subs.
On a broader level, Docsis has enabled domestic cable ops to keep the telcos at bay and maintain a sizable market share lead. (See MSOs Keep Broadband Lead in '08.) Of course, most cable operators are starting to see voice and Internet subscriber growth slow, but it was a fun ride while it lasted. (See Comcast Sub Growth Weakens in Q4 .)
However, all of this success has not come without a price. While it's true that Docsis 2.0 modems are now dirt cheap (less than $35 per unit), the modem sector experienced a massive shakeout as unit margins became wafer thin, causing many vendors to go belly up or just bug out of the business.
The core CMTS market, which used to count Terayon Communications and BigBand Networks Inc. (Nasdaq: BBND), now comprises a cozy trio of major players – Arris Group Inc. (Nasdaq: ARRS), Cisco Systems Inc. (Nasdaq: CSCO), and Motorola Inc. (NYSE: MOT). But there's still hope that upstart firm Casa Systems Inc. might make some noise as Docsis 3.0 ramps and MSOs have to consider upgrading their legacy CMTSs or go with something new. Or maybe Casa will just get bought.
So, happy 10-year anniversary, Docsis! What follows is a brief look at the many ups, and even a few downs, the sector passed on its way to reaching this historic milestone. Please chime in on the message board if you think there's anything we've glaringly omitted...
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