HomeMoreU.S. Cable Operators to Continue Capital Spending in 2008

U.S. Cable Operators to Continue Capital Spending in 2008

Concerns over HDTV service parity and the widening footprint of telco TV competitors will drive U.S. MSOs to pour capital into network and service expansion in 2008, an In-Stat survey of 50 cable operators concludes.

Although fewer than 20 percent of survey respondents commented directly about 2008 capital expenditure plans, “those who did respond indicated that their 2008 budget should be similar in size to their 2007 budget,” says In-Stat principle analyst Mike Paxton.

The survey found that 90 percent of U.S. cable TV systems now offer high definition (HD) video service. However, expanding those services is “their biggest concern,” he says. To match or exceed satellite HDTV services, he adds, the operators are looking at “reallocating existing bandwidth and at things like switched digital video and opportunities to expand up to 860 megaherz or 1 gigahertz” last-mile fiber/coax plant.

“The second point of concern is what’s happening in their footprint from AT&T and Verizon,” Paxton says. “We asked how many are facing competition now. Not quite half say they are, but all of them are watching and expecting telco TV competition in the next two years, and that seems to be driving a lot of their investment decisions. Telco TV coupled with stiff competition from satellite TV service providers is forcing U.S. cable TV operators to develop new revenue streams, while at the same time, they’re trying to hang on to their existing video subscribers.”

In-Stat found that larger market MSOs in particular also expect to invest in expanding commercial services and in developing mobile services.

They’ve been talking about commercial services for five years or more,” Paxton says. “They’re very interested in general, but it depends on the systems. The ones you’d expect, the large metro systems, are the ones most interested, whether for commercial data or voice or both. It’s a mixed bag in suburban systems.”

Interest in rolling out “some kind of wireless service” also is “broad,” but again is a mixed bag in terms of how soon: 40 percent said they have no interest soon; 36 percent said in the next two years; and 14 percent said they have no current interest, he says. “Most interest is in the big cities.”

Most respondents who expressed interest in introducing mobile telephony said they would likely do so through the MSOs’ Pivot joint venture with Sprint. However, Paxton notes, since the survey was conducted (August and September), Sprint has indicated a pullback from Pivot while pulling entirely out of a mobile spectrum acquisition venture with the same operators—all of which may be forcing respondents to rethink wireless strategies since the survey.

In the survey, titled “U.S. Cable TV Operator Survey: Competition Reshapes the Industry,” In-Stat asked operators more than 60 questions about their current systems. Questions covered information about existing video, data, and voice services; plans for introducing services in the next year; current cable system capabilities; service bundle packages; and about current investment and competitive environments.

Highlights of survey findings include:
• 84% of cable systems currently have 750 MHz or more of available bandwidth;
• With the exception of increasing the number of available 6-MHz channels for HD video services, most cable systems plan to keep their channel allocations for video services relatively static over the next 12 months;
• 26% of the cable systems have deployed OpenCable Application Platform (OCAP)-enabled set top boxes;
• 42% of their cable TV subscribers now subscribe to cable modem service, as take-rates for cable modem service continues to grow; and
• 54% of the cable systems stated that a telephone company was already offering telco TV video service in their cable TV service area footprint. 

Anish Koirala
Anish Koirala
Meet Anish, a talented author in the gaming industry. With a passion for storytelling and a deep understanding of game mechanics, Anish weaves captivating narratives that immerse players in unforgettable worlds.
RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Most Popular