Cable TV Head-Ends: Fixed Mobile Convergence (FMC) Powers Cable TV Counterpunch to IPTV

SUMMARY

Summary

The worldwide Cable TV industry is in a race to provision a "three screen" telecommunications service.

Super Headends provide the economies of scale needed to deliver the greatest number of services, over the greatest geographical reach, at the lowest possible cost.

Modular Cable Modem Termination Systems (Modular CMTS) equipment is being brought into play to upgrade High Speed Data services to compete against ADSL, VDSL, and Fiber-to-the-Home.

More Voice-over-IP equipment is also being purchased.

More QAM channels are being set up to support more services, being delivered to more subscribers.

Fixed Mobile Convergence, or FMC, is being developed using Internet Protocol Multimedia Subsystems (IMS) that come from the mobile market, and is adapting the IMS equipment, protocols, and services to work with Cable's Data over Cable standards.

This report provides detailed forecasts for the number of headends, QAM hubs, and FMC infrastructures being newly built, as well as upgrades of existing locations. In-Stat expects that the value of Internet Protocol infrastructure equipment will grow to more than US$ 2.1 billion in 2010.

TABLE OF CONTENTS

Executive Summary

Methodology

• Previous Reports That Provide Useful Background Information

Cable TV Responds to the TelcoTV (IPTV) Challenge

• Telcos Are Emerging From Ten Years of Deregulation
• Triple Play and Quad Play Coming from Telcos
• Telcos Are Rolling Out Flexible Internet Protocol Infrastructures
  • Cable TV Operators Need to Respond In Four Ways
    • Defend Their Existing Customer Base
    • Expand Their Service Offerings to Include Mobility
      • US Cable Operators in Joint Venture with Sprint Nextel
      • NTL Acquires Virgin Mobile to Launch Quad Play
    • Expand Their Revenues Due to Advertising
    • Expand Their Customer Base to Include Businesses
    • Cox Communications as a "Thought Leader" for Cable TV Business Services
  • A Quick Look at North America's Cable TV Triple Play Market: RGUs and ARPU
  • Revenue Generating Units (RGUs)
  • Average Revenue per Unit (ARPU)
  • Snapshot of North America Triple Play Service Subscribers
    • Plenty of Room Left for Long-Term Growth
    • Approximate Value of North American Triple Play Feature Offerings

Quad Play Puts All Content into a Blender of New Opportunities

• Professional Content
  • Three Kinds of Professional Content Companies
• Personal Content
  • Personal Content Usage Rights Controlled by Consumers
    • Personal Content Also Being Accepted Onto Professional Content Services
  • Communications Content
    • Triple Play Depends on Communications Content
    • Quadruple Play Further Expands the Importance of Communications Content
    • Session Initiation Protocol (SIP) Will Benefit All Three Kinds of Content
  • Communications Services Are Blending with Professional Content Services
    • Content Aggregators Ride on Communications Services
    • A Natural Yin and Yang between Content Aggregators and Communications Services Will Push, then Pull, the Market Forward in Multiple, Overlapping, Steps
    • High Definition Content Changes the Playing Field, Will Force Network Upgrades
      • By 2010, Some Homes Will Need 100Mb/s

Comcast is the Bellwether of the Cable TV Industry

• Comcast Is a Major Content Aggregator and Distributor with Multiple Nation-Wide Networks, Both Via Satellite and Via Fiber Optic
• Comcast Can Lead Cable TV into Mobile Services

Net Insight's Digital TV Platform: An Automated Approach to Cut Costs

• Nimbra-Enabled Solution Is an Example Super Headend
• Net Insight-Enabled Norkring Network for DVB-T in Norway
• Nimbra Platform Designed for Quality of Service
• Net Insight Solution Supports Voice and Mobile Video Services
• Maintains GPS-Accurate Timing for All Network Edge Points

CableLabs Initiatives Will Spur Continued Growth

• Society of Cable Telecommunications Engineers (SCTE)
  • SCTE Standards Provide International Reach

Why Cable TV Mobile Services Will Be Disruptive

• Cable TV Operators Are More Nimble than People Think they Are

Cable Infrastructure Forecasts

• Cable TV Systems Are Emerging as Full Service Telecommunications Providers
• Key Industry Trends
  • Increasing Use of High Definition TV Programming
  • Expanding Video-On-Demand Infrastructure
    • Advertising Insertion
    • Upgraded Cable Modem Video Services with Targeted Advertising
    • Video Content and Targeted Advertising for Mobile Services
  • Switched Digital Video to Conserve Bandwidth
  • Increase to 1GHz Bandwidth in the Final Mile
  • Channel Bonding for Cable Modems
  • Special Approaches to Support Business Users
  • Eventual Move to 100% Digital Final Mile
  • Fixed Mobile Convergence (FMC)
  • Mid-Stream Upgrades to Create Opportunities for New Players to Approach the Cable TV Industry
• Super Headends by Region
• Local Headends by Region
• QAM Channels by Region
  • Broadcast QAM, VOD QAMs and IP-QAM Channels
  • Newly Built QAM Hubs by Region
  • Upgraded QAM Hubs by Region
  • Estimate of QAM Units Shipped by Region, by Category
• Fixed Mobile Convergence Infrastructure by Region
• North American Cable Infrastructure Equipment Forecast by Category
• European Cable TV Infrastructure Equipment Forecast by Category
• Asian Cable TV Infrastructure Equipment Forecast by Category
• ROW Cable TV Infrastructure Equipment Forecast by Category
• Regional Summaries and Comparisons
• Worldwide Summaries by Category

Profiles of Key Companies

• Cisco Systems
  • Cisco-Linksys
    • Linksys Home and Small Business Media Gateways
      • Media Gateways Enable Managed Services
  • Scientific Atlanta Acquisition
    • Scientific Atlanta Provides Four Growth Vectors
  • Cisco Acquires Arroyo Video Solutions, Inc.
    • Arroyo Provides Low-Cost, High Performance, Video On Demand
  • Cisco Announces CRS-1 Core Router Improvement
    • Wideband Channel Bonding
• Motorola, Inc. Connected Home Solutions
  • Kreatel IPTV Set Top Box Acquisition
  • Broadbus Technologies Video Server Acquisition
  • An Ever-Expanding Portfolio of Solutions
    • MediaCipher™ IP
    • Channel-Bonding Solutions for Very High Speed Data
    • Cable MESH for Metropolitan Area WiFi Services
    • 1GHz Products with Enhanced Upstream Bandwidth
    • Switched Digital Video Network Architecture
• Juniper Networks, Inc.
  • Juniper Partners with Motorola on Modular CMTS
    • Juniper's Expanding Portfolio of IP Solutions for Cable TV Multiplay
    • Expanding Business with Cox Communications
    • SDX-300 Service Deployment System for Packet Cable Multimedia (PCMM)
  • Juniper's Open IPTV and Multiplay Initiative
    • Four Vectors of Growth Enabled by Juniper Networks
• TANDBERG Television ASA
  • Any Platform to Any Device Solutions
    • World Leader for Advanced Video Codecs (AVC) and IP Networking Enables Video to Any Device Over Any Platform
    • OpenStream Digital Services Platform® Enables VOD Delivery
    • AdPoint On-Demand Advertising Platform® Supports Zones
  • SkyStream Acquired by TANDBERG Television
• ARRIS Group, Inc.
  • ARRIS Labs Provides Unparalleled Interoperability Expertise
  • ARRIS FlexPath™ and Cadant® C4™ CMTS Enable Wideband
    • FlexPath™ Protects Investment in DOCSISR 1.1 and 2.0 Modems
  • Cadant® G2 IMS™ Intelligent Management System
    • Fixed Mobile Convergence Is On the Way from ARRIS
• Lucent Technologies
  • Merger with Alcatel
  • Lucent Delivers Value over IP™
    • Lucent Advantages for Cable TV MSOs
    • Lucent Working with CableLabs, SCTE, CTAM, NCTA
      • Lucent's Leading IMS Technology Being Adapted for PacketCable 2.0 and Open Cable Applications Platform (OCAP)
    • Communications Applications in the Home, and On the Go
    • Lucent IMS is an Enabler for Sprint Nextel Joint Venture
    • Success with Voice-over-IP Offerings
    • Managed and Hosted Services
    • Lucent Worldwide Services Organization
    • Lucent's MiViewTV™ Concept May Enable Personalized TV Delivery across Wired and Wireless Boundaries
• Alcatel
  • Alcatel Merger with Lucent Technologies
  • Alcatel Partnership with Microsoft TV for IPTV
  • IPTV and IMS Fixed Mobile Convergence for TDC Denmark
  • Triple Play Service Delivery Architecture for Cable TV MSOs
    • Alcatel's 7750 Service Router
    • Alcatel's 7450 Ethernet Service Switch
    • Alcatel's 7342 G-PON
• C-COR, Incorporated
  • C-COR Driving Forward with Success in Europe
  • Four Main Focus Areas
• Harris Broadcast Communications
  • Focusing On Pulling "Content" Into the Future- Profitably
  • Cable TV Systems Will Need Local Content
    • Cable TV Systems Will Need Local Control of Their Local Content
    • Analog Cut-Off to Impact Local TV Broadcasters, and Cable TV Can Benefit
    • Local Cable Can Host Community-Based Content Sharing Services
    • Community-Based Content Could Go to TV Sets, PCs, or Cell Phones
  • Harris H-Class Platform Enables Local Content for Cable TV
    • Cable TV MSOs with Nationwide Fiber Optic Backbones Could Benefit
  • Harris Also Provides Mobile TV Capabilities
  • Harris has Been Delivering Targeted Advertising for Decades
    • Local Cable TV Ad Sales Already Supported by Harris Broadband Solutions Novar Traffic and Billing Software
• BigBand Networks
  • BigBand's Platform Approach to Digital Cable and IP Services
  • Switched Digital Broadcast is Big Band's Forte'
  • Big Band Cuda? CMTS Demonstrates 100Mb/s at IBC
• Harmonic
  • ProStream™ 8000 Digital Mosaic Wins International Award
    • Tiling Multiple Video Streams Will Become a Service Enhancer
  • Harmonic Acquires Entone Video Networking Software
• Scopus Video Networks Ltd.
  • Scopus' Intelligent Video Network™
  • Digital Ad Insertion with IVG 7500 Intelligent Video Splicer
  • Scopus UID-2912 Dense Edge IP Decoder
  • Network Management and MPEG-4/AVC for IP Video Networks
• ECI Telecom
  • Metro Area Networks for All Service Providers
  • Europe's Cable TV Systems Building Metro Area Networks
  • Fixed Mobile Convergence Driving Growth
• Telcordia®
  • Telcordia® Maestro™ IMS Portfolio
  • Telcordia Cable TV Solutions Enable a Competitive Edge
• Huawei Technologies Co., Ltd.
  • Huawei Digital Media and Entertainment (DME) Solutions
  • Huawei Mobile Networks and IMS for Fixed Mobile Convergence
• Nortel Networks Corporation
• Optibase
  • Optibase Demonstrates Picture-in-Picture with UTStarcom
• RGB Networks
  • RGB Announces Third Round Venture Funding
• Terayon Communication Systems, Inc.

List of Tables

• Table 1. Worldwide Forecast for Cable TV Infrastructure Equipment (US$ Millions, Annual Growth Rate, Compound Annual Growth Rate)
• Table 2. Snapshot of North America Triple Play Service Subscribers (Subscribers by Service Taken)
• Table 3. Relative Penetration of Triple Play Services (Number of Subscribers by Service, Percent of Total Subscribers)
• Table 4. Approximate Value of North American Triple Play Feature Offerings (Annual Value in US$ Thousands, Annual Growth Rate)
• Table 5. Cable TV Newly Built Super Headends by Region (Units, Annual Growth Rate, Percent of Total, CAGR)
• Table 6. Typical Equipment Costs for Newly Built Super Headends by Region (US$ Millions, CAGR)
• Table 7. Annual Value of Equipment in Newly Built Super Headends by Region (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)
• Table 8. Cable TV Upgraded Super Headends by Region (Units, Annual Growth Rate, Percent of Total, CAGR)
• Table 9. Typical Equipment Costs for Newly Built Super Headends by Region (US$ Millions, CAGR)
• Table 10. Annual Value of Equipment in Upgraded Super Headends by Region (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)
• Table 11. Annual Value of Newly Built and Upgraded Super Headends by Region (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)
• Table 12. Cable TV Newly Built Local Headends by Region (Units, Annual Growth Rate, Percent of Total, CAGR)
• Table 13. Typical Equipment Costs for Newly Built Local Headends by Region (US$ Millions, CAGR) 38
• Table 14. Annual Value of Equipment in Newly Built Local Headends by Region (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)
• Table 15. Cable TV Upgraded Local Headends by Region (Units, Annual Growth Rate, Percent of Total, CAGR)
• Table 16. Typical Equipment Costs for Upgraded Local Headends by Region (US$ Millions, CAGR)
• Table 17. Annual Value of Equipment in Upgraded Local Headends by Region (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)
• Table 18. Annual Value of Newly Built and Upgraded Local Headends by Region (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)
• Table 19. Calculations of Costs for Newly Built QAM Hubs in North America (QAMs per Hub, Cost US$, # of Digital QAM Channels)
• Table 20. Calculations of Costs for Newly Built QAM Hubs in Europe (QAMs per Hub, Cost US$, # of Digital QAM Channels)
• Table 21. Calculations of Costs for Newly Built QAM Hubs in Asia (QAMs per Hub, Cost US$, # of Digital QAM Channels)
• Table 22. Calculations of Costs for Newly Built QAM Hubs- ROW (QAMs per Hub, Cost US$, # of Digital QAM Channels)
• Table 23. Cable TV Newly Built QAM Hubs by Region (Units, Annual Growth Rate, Percent of Total, CAGR)
• Table 24. Typical Equipment Costs for Newly Built QAM Hubs by Region (US$, CAGR)
• Table 25. Annual Value of Equipment in Newly Built QAM Hubs by Region (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)
• Table 26. Calculations of Costs for Upgraded QAM Hubs in North America (QAMs per Hub, Cost US$, # of Digital QAM Channels)
• Table 27. Calculations of Costs for Upgraded QAM Hubs in Europe (QAMs per Hub, Cost US$, # of Digital QAM Channels)
• Table 28. Calculations of Costs for Upgraded QAM Hubs in Asia ((QAMs per Hub, Cost US$, # of Digital QAM Channels)
• Table 29. Calculations of Costs for Upgraded QAM Hubs in ROW Countries (QAMs per Hub, Cost US$, # of Digital QAM Channels)
• Table 30. Cable TV Upgraded QAM Hubs by Region (Units, Annual Growth Rate, Percent of Total, CAGR)
• Table 31. Typical Equipment Costs for Upgraded QAM Hubs by Region (US$, CAGR)
• Table 32. Annual Value of Equipment in Upgraded QAM Hubs by Region (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)
• Table 33. Annual Value of Newly Built and Upgraded QAM Hubs by Region (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)
• Table 34. Number of QAM Modulator Units Shipped by Region, by Category (Number in Units, Annual Growth Rate, Percent of Total, CAGR)
• Table 35. Cable TV Newly Built FMC Service Infrastructure by Region (Units, Annual Growth Rate, Percent of Total, CAGR)
• Table 36. Typical Equipment Costs for Newly Built FMC Infrastructure by Region (US$ Millions, CAGR)
• Table 37. Annual Value of Newly Built FMC Service Infrastructure by Region (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)
• Table 38. Cable TV Upgraded FMC Service Infrastructure by Region (Units, Annual Growth Rate, Percent of Total, CAGR)
• Table 39. Typical Equipment Costs for Upgraded FMC Infrastructure by Region (US$ Millions, CAGR) 61
• Table 40. Annual Value of Upgraded FMC Service Infrastructure by Region (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)
• Table 41. Annual Value of Newly Built and Upgraded FMC Service Infrastructure by Region (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)
• Table 42. North American Cable Infrastructure Equipment Value by Category (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)
• Table 43. European Cable Infrastructure Equipment Value by Category (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)
• Table 44. Asian Cable Infrastructure Equipment Value by Category (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)
• Table 45. ROW Cable Infrastructure Equipment Value by Category (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)
• Table 46. Value of Cable Infrastructure Equipment Value by Region (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)
• Table 47. Worldwide Value of Cable Infrastructure Equipment Value by Category (US$ Millions, Annual Growth Rate, Percent of Total, CAGR)

List of Figures

• Figure 1. Relative Annual Value of North American Triple Play Feature Offerings (Annual Value in US$ Thousands)
• Figure 2. Net Insight's Remotely-Operated Digital Terrestrial Network System
• Figure 3. Annual Value in Newly Built and Upgraded Super Headends by Region (US$ Millions)
• Figure 4. Annual Value of Newly Built and Upgraded Local Headends by Region (US$ Millions)
• Figure 5. Annual Value of Newly Built and Upgraded QAM Hubs by Region (US$ Millions)
• Figure 6. Annual Value of Newly Built and Upgraded FMC Service Infrastructure by Region (US$ Millions)
• Figure 7. North American Cable Infrastructure Equipment Value by Category (US$ Millions)
• Figure 8. European Cable Infrastructure Equipment Value by Category (US$ Millions)
• Figure 9. Asian Cable Infrastructure Equipment Value by Category (US$ Millions)
• Figure 10. ROW Cable Infrastructure Equipment Value by Category (US$ Millions)
• Figure 11. Value of Cable Infrastructure Equipment Value by Region (US$ Millions)
• Figure 12. Worldwide Value of Cable Infrastructure Equipment Value by Category (US$ Millions)