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Global cable operator survey: broadband demand drives headend, spectrum upgrades

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Global cable operator survey: broadband demand drives headend, spectrum upgrades

Cable operators are firmly committed to both network equipment upgrades and to leveraging additional spectrum moving forward, according to a new Kagan global survey of 101 cable operators serving approximately 200 million fixed broadband subscribers. The driving force for cable network transitions and associated equipment upgrades remains escalating consumer demand for bandwidth, hence the increasing availability of gigabit broadband service.

In the headend, the evolution from cable modem termination systems, or CMTS, to converged cable access platforms, or CCAP, is a foundational element of the cable industry's commitment to technological progress. The fact that more than one-third of the survey respondents are leveraging their CCAPs in a fully converged mode — as both broadband data and video platforms — highlights solid progress in the cable industry, given that CCAP systems are still a relatively new technology.

Of the surveyed operators utilizing CCAP systems in 2020, 43% are configured for DOCSIS (broadband data) only applications, while 36% are leveraging their CCAP solutions in truly converged configurations, specifically, for both broadband DOCSIS channel and video edge QAM support. As a reality check, many cable operators continue to leverage their legacy CMTS, with 56% utilizing integrated-CMTS, or I-CMTS, and 41% using modular CMTS, or M-CMTS, platforms.

Beyond the demand for escalating broadband speeds, cable operators continue to leverage both the established hardware-based headend solutions (CMTS and CCAP) as well as new virtualized/distributed cable headend technologies — specifically, virtual CMTS, or vCMTS, and remote PHY/MAC implementations. These virtual and distributed technologies, and how they are currently (and will be) implemented by our survey respondents, are highlighted here.

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This migration from CMTS to CCAP systems has two primary functions: 1) consolidation of the formerly discrete CMTS (broadband data) and edge QAM (video) solution sets, and 2) setting the stage for cable operator transitions to all-IP networks. There are multiple CMTS/CCAP configuration options for cable operators; each offers trade-offs between cost and service deployment/migration efficiency.

Demand for downstream

To date, North American MSOs such as Comcast Corp. and Charter Communications Inc. have been the leaders in terms of delivering gigabit broadband service as a competitive response to telcos such as AT&T Inc.Verizon Communications Inc. and CenturyLink Inc., which have built out fiber-to-the-home, or FTTH, for a variety of reasons. Verizon was the first major U.S. telco to deploy FTTH service; more recently Verizon has expanded its fiber footprint not to target residential wireline customers but to lay the (transport) foundation for its nationwide 5G wireless network. Meanwhile, AT&T agreed to build out its AT&T Fiber network — which is targeted at residential wireline broadband customers — as part of its agreement with U.S. regulators as a condition of its acquisition of Time-Warner.

Thirty percent of our respondents currently deliver an average of 101 Mbps to 300 Mbps of downstream bandwidth. As shown by the chart below, cable operators plan to steadily upgrade their downstream broadband offerings in the coming years; the benchmark of 1 Gbps is the goal for those MSOs that don't already offer gigabit broadband service. Specifically, by 2022, almost half (48%) of respondents plan to offer ultra-fast downstream service (501 Mbps to above 1 Gbps). The competitive threat posed by telcos with FTTH networks will compel cable operators to provide higher upstream speeds to compete more effectively with rival services.

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Expanded spectrum for additional bandwidth gains

While the cable industry has addressed the near-term demand for downstream broadband service, thanks primarily to extensive upgrades to DOCSIS 3.1 network elements, cable's remaining weak point – especially against FTTH services – is its upstream capacity. For example, Comcast's high-profile 1 Gbps downstream service is matched with a 35 Mbps upstream service in most markets. In high-ARPU markets, such as the Verizon Fios footprint in the northeastern U.S. (serving the Washington, D.C., New York and Boston metros), upstream capacity is becoming an increasingly important differentiator for operators. Verizon's top tier Gigabit service supports 880 Mbps upstream, which dwarfs Comcast's 35 Mbps.

We asked the 2020 survey respondents about the average spectrum supported by their current cable plant, and how their utilization of spectrum will evolve during 2021 and 2022. For 2020, 35% of operators were using up to 1 GHz; another 37% were using 1.2 GHz during 2020. By the end of 2021, a full 36% of survey respondents said they would be leveraging up to 1.2 GHz (the exact percentage claimed in our 2019 survey), while an even larger percentage, 41%, said they would utilize cable plant spectrum above 1.2 GHz.

By the end of 2022, respondents collectively revealed plans for additional upward progress on the spectrum front, with 52% asserting plans to utilize spectra above 1.2 GHz. The trend toward leveraging spectrum above 1.2 GHz (i.e., up to 1.7 GHz in the next five years) demonstrates the cable industry's commitment to extracting maximum value from the hybrid fiber-coax network, as well as enabling even greater broadband speeds, both downstream and up.

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