NIAGARA-ON-THE-LAKE, Ont. – While the future of high speed data for cable operators is DOCSIS 3.0 and whatever comes after that, it may not yet be necessary to dive into that cost and upgrade for most CCSA members.
Thanks to an ever-increasing array of new bandwidth-hungry applications (to say nothing of the oldest, biggest, app, analog television), all network operators are finding network management a challenge.
So this morning, Chris Lammers, executive vice-president and chief operating officer of Cable Television Laboratories, the cable industry’s R&D consortium, told delegates at Connect 2009, the Canadian Cable Systems Alliance annual conference, a bit about the competitive high speed data market beyond Canada.
While serious telco competition Stateside has pushed MSOs there towards launching DOCSIS 3.0 and its “up-to” 100 Mbps download speeds (or 101, as Cablevision claims), the two big Canadian telcos have yet to move down the same road as Verizon and AT&T, both of which offer digital TV and 50 Mbps high speed data services.
That said, Shaw Communications now offers high speed data options of up to 100 Mbps in parts of its territories. And, Bell Aliant recently announced a fibre-to-the-home build, so the other big companies won’t be too far behind, one supposes.
But until then, “competitively, you may not need 3.0,” said Lammers, who noted that for 40% of the States, DOCSIS 2.0 will be just fine, competitively speaking, for the foreseeable future.
With Verizon (FiOS) and AT&T (U-verse) pushing hard in their major markets, American MSOs like Cablevision have responded with serious speed boosts and aggressive pricing. For example, noted Lammers, while Verizon offers 50 Mbps for US$139.99, Cablevision offers its customers in New York, New Jersey and Connecticut the option of its “Optimum Online Ultra” of 101 Mbps for US$99.95 per month.
Pricing, he notes, varies as well and Lammers predicts future margin tightening, noting that Comcast currently charges US$139.99/mo. for its 50 Mbps service and US$369/mo for its commercial 100 Mbps offering.
But in Europe and Japan, where “margins are squeezed because competition is much, much, fiercer,” operators there are pushing 160 Mbps for approximately US$65 a month.
Lammers figures that the business model will eventually change in North America as well, forcing margin pressure, noting that even when European or Japanese operators dramatically boosted their download speeds (uploads are still in the 15 Mbps range), competitive pressures meant they could only raise monthly rates a few dollars.
What operators do need to keep their eyes on are advancements in cellular technology, said Lammers. As wireless operators move their networks to 4G, the old cell nets that once boasted just voice and e-mail and rudimentary surfing capabilities will be offering broadband data speeds that rival DOCSIS.
In fact, Rogers announced their latest high speed wireless product just last week, boasting top-end speeds of 21 Mbps in the five largest Canadian cities.
According to SNL Kagan, said Lammers, there will be 5.3 million wireless broadband subs in the U.S. by the end of 2013, more than double what there are now. However they will still be dwarfed by the 47.6 million cable HSD and 43.2 million telco HSD customers SNL Kagan is predicting for the end of 2013. But the growth in cable (12%) and telco HSD (25%) will be far below wireless broadband’s growth – which will be driven by not only laptop and netbook usage, but by the ongoing growth in smart phones.
And as for what’s next – after DOCSIS 3.0 and its 100 Mbps? While it may be tough to consider, given the fact that most operators here aren’t yet moving to 3.0, Lammers says CableLabs’ next goal is “looking to cost-effectively provide 1 Gbps” service to the home.
– Greg O’Brien
