According to an analyst group, cable operators need to issue a call to arms in order to combat the growing threat from telcos who are deploying fiber-to-the-home (FTTH).
“FTTH poses a real threat to the MSOs, potentially rendering today’s cable television infrastructure obsolete,” said Steve Rago, principal analyst for networking and optical communications with iSuppli. “This is the same infrastructure that cable operators in the United States just finished upgrading at a cost that iSuppli estimates at $60 billion.”
The report predicts that FTTH providers will have 413 million broadband customers in 2010, eclipsing the total number of cable broadband customers for the first time.
FTTH is a competitive threat in Japan, the U.S. and other regions where the fiber can be aerial fed from a central office by using telephone lines and poles. It’s also being deployed via sewer lines in Paris. The report said that for other regions, the cost of deploying fiber can be between 12 to 15 times more expensive than the cost of deploying broadband via twisted copper. While the high cost will slow down FTTH deployments, iSuppli believes it will still be deployed by major telcos worldwide for the next 15 to 20 years.
The report also cited fiber-to-the curb (FTTC) and VDSL to homes as threats to cable. Service providers such as AT&T can save up to 50 and 60 percent by not replacing their copper over the last mile.
“MSOs need to start planning now if they hope to counter the threat of telcos starting in 2009,” Rago said. “If MSOs do not upgrade their capabilities, they may see the war for the triple/quadruple play swing in favor of the telcos.”
While the report predicts dire consequences for the cable industry, cable operators are working on expanding their bandwidth through node splits, wideband and DOCSIS 3.0 once the latter is deployed.