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Cable TV Operators Tackle Bandwidth Crunch

The accelerating adoption of high-definition television, multi-player gaming, and other data-intensive services is leading to a bandwidth shortage that will require cable TV system operators to upgrade the capacity of their networks.

A number of solutions are available, according to a new study from ABI Research, the total revenue from this market opportunity is expected to exceed $24 billion in 2012 and will amount to $80 billion in total investment from 2007 through 2012.

"The looming bandwidth crunch, which is more pronounced in the United States than elsewhere due to its deeper penetration of digital cable, will present different problems to different operators, and each will need to find its own bandwidth upgrade formula," says principal broadband analyst Michael Arden. The severity of the crunch will depend on factors such as the speed with which HDTV is adopted in particular markets, and the extent to which cable operators add extra HDTV channels.

As usual, the available technology solutions are ranked along on a 'you get what you pay for' range: some approaches, such as rate shaping and switched digital video are relatively inexpensive but don't deliver very much in the way of increased capacity, while others, such as a fiber-to-the-home PON overlay, are what Arden terms 'outrageously expensive,' but can provide all the bandwidth most operators will ever need.

"When designing an upgrade strategy," he adds, "operators should consider how much competition they face in their markets. Where there is significant IPTV competition, the need to grow capacity is more urgent because IPTV automatically comes with greater bandwidth capabilities. Markets with high sales of HDTV sets and substantial numbers of digital cable subscribers may also justify a greater investment in capacity upgrades."

In practice, says the study authors, network upgrades will naturally start in the major urban centers and gradually spread to less densely-populated regions. The good news for U.S. cable TV system operators, they can learn from their peer group in other more advanced parts of the world, such as Japan, where fiber to the home, HDTV and low-cost high-bandwidth broadband access services are already the norm.

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