| Based
on direct interviews with the seven largest
US and Canadian cable operators and more than
a dozen technology vendors, the report takes
a close look at the early SDV trial and rollout
strategies of leading North American MSOs
and forecasts their progress through the end
of 2009.
Leading
cable MSOs profiled in this report include
Cablevision Systems, Charter Communications,
Comcast, Cox Communications, Rogers Communications
and Time Warner Cable.
Heavy
Reading analyst and author of the report
Alan Breznick says, "Cable network
operators have come to realise that customer
demand for bandwidth, which has been climbing
faster and higher than anyone expected,
will soon outstrip their ability to supply
that bandwidth with technologies now in
place.
"Competitive
pressure from satellite network operators
and telco IPTV providers will force cable
MSOs to find solutions to their bandwidth
problem sooner rather than later."
Cable
operators are evaluating an array of new
technologies to expand their overall radio
frequency (RF) capacity and use existing
bandwidth more efficiently, says Breznick.
"Over the past year, SDV has emerged
as the leading choice on this menu -- beating
out such alternatives as fibre node segmentation,
MPEG-4 video encoding, improved quadrature
amplitude modulation, plant upgrades to
1GHz capacity, out-of-band spectrum overlays,
and deep-fibre drops, among others,"
he adds.
Although
SDV is now a frontrunner in the MSO bandwidth
efficiency race, its long-term success is
far from certain. In addition to questions
about technological complexity, the cost
associated with deploying SDV on a wide
scale may be higher than what MSOs now anticipate,
Breznick warns.
"At
least one large North American cable company
estimates the price tag to be as high as
$32 per home passed, which is double the
early estimates for SDV deployment."
Other
key findings of switched digital video and
cable's looming bandwidth crisis include:
North
American cable operators will roll out SDV
in a big way in 2008, after several cautious
years of lab tests, field trials and limited
pilot deployments. The two largest MSOs,
Comcast and Time Warner Cable, both plan
to introduce the technology in most, if
not virtually all, of their markets by the
end of 2008; while Cox and Charter, which
has just started deploying SDV commercially,
intends to expand to several more markets
in 2008.
SDV
will be deployed to the majority of North
American cable households by the end of
2008. Based on interviews with the leading
MSOs and equipment vendors, Heavy Reading
expects SDV deployments to cover as much
as 60 per cent of the entire North American
cable footprint by January 2009. This total
could then rise to 75 per cent or more by
January 2010.
Early
trial deployments of SDV confirm its bandwidth-saving
potential. In market trials and pilot deployments,
several North American MSOs report digital
spectrum savings of close to 50 per cent,
just as they had hoped. Vendors report that
some customers are already realising bandwidth
efficiencies of 60 percent or more in select
cable systems.
SDV
may well prove to be just a temporary solution
to cable's bandwidth issue. While SDV will
buy the industry time by freeing up some
digital spectrum for other, more profitable
uses, the technology won't actually create
any new bandwidth for MSOs, particularly
on the critical upstream side.
Cable
operators will need to continue to pursue
other technology options along with SDV
to improve bandwidth efficiency in their
networks. MSOs will likely have to combine
SDV with a number of other techniques --
including reclamation of more analogue channels,
further node splits, MPEG-4 compression,
1GHz plant upgrades and 3GHz spectrum overlays
-- to create enough bandwidth for all of
the HD, nice programming and other new digital
services they need to deliver to meet competitive
threats from satellite and telco IPTV service
providers.
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