Cable Operators Other Than Comcast to Hike DOCSIS 3.0 Spending, Arris Says
Spending by cable giant Comcast on DOCSIS 3.0 equipment such as cable-modem termination systems probably will drop this year as the company completes its initial rollout of the technology, but other North American cable operators will raise their spending, Arris executives said on a teleconference Wednesday. “We are still in the early stages of a worldwide deployment of this generation of technology and I don’t expect these trends to let up,” CEO Bob Stanzione said. “Neither do I expect cable operators to stop improving their networks as they aggressively compete with telcos and satellite service providers."
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So far, though, spending on DOCSIS 3.0 network equipment hasn’t translated into widespread adoption of ultra-fast broadband service by consumers, Arris executives said. Most of the capacity gains that operators have achieved by adding the gear are being consumed by customers using older DOCSIS 2.0 modems, they said.
Web-enabled TV sets and the rise of IP video will drive operators’ DOCSIS 3.0 spending, Stanzione said. “Broadband traffic is doubling every 18-24 months and speeds are also increasing,” he said. All of that fuels demand for Arris’ DOCSIS 3.0 gear, he said. Other cable operators, such as Time Warner Cable, are already starting to spend, he said.
"The pattern that we saw at Comcast, we have a lot of confidence it’s going to repeat with other customers and you can see that already starting with Time Warner,” said Bruce McClelland, president of Arris’ broadband communications systems division. Even cable operators that aren’t marketing DOCSIS 3.0 modems to consumers are using DOCSIS 3.0 equipment in their networks to add capacity, McClelland said. “Whether an operator is being surgical about the marketing in deployment of 3.0 in particular is somewhat independent of the fact that they have to add capacity anyway,” he said. “And most operators are doing it with DOCSIS 3.0 technology, not DOCSIS 2.0 technology."
So spending on DOCSIS 3.0 consumer premises equipment (CPE) lags behind spending on network gear. “The rollout of 3.0 CPE and 3.0 service is pretty muted so far,” said Bryant Isaacs, president of Arris’ media and communications systems division. “The capacity that’s being put in the network today is getting consumed for DOCSIS 2.0 standard 10 Mbps, 20 Mbps tier services.”
Cable operators changed their marketing of DOCSIS 3.0 and there hasn’t been huge consumer adoption of the service, said David Potts, the chief financial officer. “Having said that, there is a great deal of interest” among operators “in a variety of new DOCSIS 3.0 devices” such as “higher end gateway oriented products,” he said. “I think that will be an integral part of how they market and sell the service later in the year.”