In the US, more than 60% of residential broadband subscribers receive their services via cable modem as of 3Q18, according to Ovum research. With increased FTTH competition across the country, cable operators continue to upgrade bandwidth speed tiers while also enhancing service offerings. Several cable operators have announced an FTTH approach in order to compete. Still, most cable operators in North America continue to utilize their existing hybrid fiber-coaxial (HFC) infrastructure to deliver higher speeds, and even gigabit services.
In order to remain competitive with growing FTTH offerings, cable operators need to go beyond platform upgrades like DOCSIS 3.1. To future-proof their networks, cable operators need to look to a distributed access architecture (DAA) – a collection of technologies – accompanied by a "fiber deep" framework to transform their headends/hubs and outside plant. While there are philosophical technology arguments, the objective is to achieve more bandwidth per subscriber while realizing reduced opex costs.
DAA is a key transformation in next-generation cable-access networks. The shift to placing the intelligence in the field is a relatively new concept within cable access. HFC networks were designed like bookends, with key functions at either end, in the headend/hub and at the customer premises. As intelligence is pushed out of the headend and into the outside plant, more efficiencies – lower real estate, power, and cooling costs – are realized. DAA can be adopted in stages while ensuring that the customer premise side remains the same, thereby avoiding expensive upgrade costs to subscriber homes.
As functions are moved out of the headend/hub and into the field, outside plant equipment and operations will increase, leading to more complex routine testing and maintenance programs, all of which needs to be assessed in the planning stage. This is where SDN/NFV plays a key role in DAA, not just to keep opex costs lower but also to automate, monitor, and control quality of service. A larger outside plant is not without risks: consequences of theft, and of potential damage from humans, animals, or environmental factors/disasters, increase with more intelligence in the field.
Considerations for DAA upgrade paths vary from operator to operator and within each operator's network: current space constraints in the headend/hub, rising power/cooling/real estate costs, the availability of capex for network investment, current network capacity, and future growth plans/onboarding new service groups.
The goal for any operator is to pull fiber closer to the end user. Eventually, all operator access networks will be full fiber, but there is a long way to go before that happens. Cable operators will transform their networks and service offerings, just as they always have, to stay competitive with their telco rivals. Further iterations of DOCSIS will enable symmetrical, multi-gigabit services to customers, but ultimately it is the pairing of next-gen technology with DAA that will make the future business case possible for cable operators.
Straight Talk is a weekly briefing from the desk of the Chief Research Officer. To receive this newsletter by email, please contact us.