The global financial crunch is making cable infrastructure more attractive than telco FTTx for ultra-high broadband access both for cost and time-to-market reasons, according to a new report from research firm Arthur D. Little.
The research firm estimates the cost per home passed to upgrade existing cable access networks is about one-third the cost of FTTx deployment and, with this upgrade, cable will soon be able to offer a comparable customer experience to fiber in high-end data and advanced multimedia services.
Furthermore, cable operators are already pursuing mobile opportunities through partnerships to counter incumbents' DSL/ fiber bundled offers.
In addition, while many telco players are considering substantial FTTx deployments, cable operators already are well-positioned to provide high-speed Internet and advanced multimedia services in their footprint areas, Arthur D. Little analysts found. In the last few years, cable operators have further increased their competitive advantage in broadband capacity, with DOCSIS 3.0 providing services up to 120mbps.
However, Arthur D. Little analysts said operational excellence will be the key condition to convert these technological assets into market success. In particular, customer operation management and marketing often remain a weakness of cable operators. The success of any operator in any individual market will depend on its ability to continuously improve customer satisfaction and marketing capabilities.
“Technology alone will not be enough to be successful; operational excellence and branding need to be a part of the value proposition to end-users,” said Karim Taga, co-author of the report, “The Moment of Truth: Cable Infrastructure As A Competitive Next Generation Access (NGA) Platform in A Financial Crunch?” and director at Arthur D. Little’s Telecoms Information Media & Electronics (TIME) Practice.
Given the current financial crisis, Arthur D. Little recommends all market players to shift their attention from cash-intensive FTTH-only investment and to include cable infrastructure in their strategy to define next-generation access platforms.
Fixed operators, especially alternative operators, should consider the acquisition of cable infrastructure, if feasible, as opposed to deploying a fiber access network. If not, they should reassess risks to their business from cable, the analysts advised.
Similarly, the researchers suggested mobile operators consider an acquisition of, or a partnership with, a cable operator as an option for fixed-market entry.
And, cable operators, apart from the continuing consolidation in order to establish a sizable footprint, should focus on improving customer excellence to fully leverage their assets. In addition, they need to pre-empt regulatory risk by proactively developing a wholesale offer, especially to mobile operators.
The research firm also advised financial investors to shift their portfolios from FTTH-only investments to a more balanced NGA portfolio that includes cable infrastructures. And, it argued policymakers need to consider cable infrastructure as part of their next-gen access strategy, as cable infrastructure could provide a cost-effective platform for ensuring ultra-broadband access.
