Keeping up with the Joneses in data

I suppose that one day I will be able to glance at a headline containing the term “1Gbps” and not feel an instinctive need to click through to find out more. I guess knowing that somebody out there can get access to such broadband speeds makes me somewhat jealous.
As a result, you can imagine my curiosity when I saw the headline “Virgin Media trials 1.5Gbps broadband speeds powered by Cisco cable access technology.”
The reason for my curiosity was pretty simple: All year FTTH/B operators have told me that they are crushing DSL and cable operators with their massive bandwidth advantages, and yet here was a UK cable player trialing speeds beyond those of any FTTH/B player in the market.
Virgin Media, which battles incumbent player BT’s DSL services in the UK, has yet to announce whether it will proceed to a commercial launch of the 1.5Gbps services. But with BT fast deploying its own FTTH and FTTN services, it would seem likely that Virgin will push to increase the access speeds available to its own subscribers.
In the trial, which took place in East London, Virgin used new technology from Cisco, principally its 3G60 Broadband Processing Engine, a high-density line card for Cisco’s Universal Broadband Router and Cable Modem Termination System, to generate the 1.5Gbps speeds on its DOCSIS 3.0 HFC network.
For cable multiple service operators (MSOs), the advantages of deploying the Cisco technology are pretty obvious. In return for a relatively modest investment, MSOs can offer speeds well in excess of what are being offered by FTTH networks, which typically cost $1,500 [€1,082] to $2,000 per household to deploy. Nonetheless, Cisco executives say that the widespread deployment of its 1.5Gbps technology will largely depend on the availability of new applications that will force operators to make the upgrade and will spark subscriber demand for ultrafast broadband services.
“It is really the applications that will drive the adoption of these speeds,” Ben Bekele, market-management manager at Cisco, told Informa Telecoms & Media. “DOCSIS 3.0 was available almost four years ago, but it has not been heavily adopted by the consumers, even though MSOs are offering the speeds, albeit at a higher price.
“So far there have not been any applications that have driven the consumers to adopt these kinds of speeds just yet, but if the applications demand it, then HFC [hybrid fiber-coaxial] can deliver those kinds of speeds at a fraction of the cost that it would take to put an FTTH solution in place. The cable operators are leveraging the same infrastructure. It is just a new line card, but from an infrastructure perspective you are extending the life of your infrastructure and delivering ten times as much bandwidth to subscribers.”
The Asia Pacific angle
Although Cisco’s argument that more bandwidth-intensive applications will need to arrive in the market before MSOs feel the need to deliver 1Gbps services to subscribers is probably correct in most geographical territories, the company might be surprised by the amount of interest Asia Pacific MSOs have shown in deploying such speeds.
Souped-up HFC has strong implications for the region, given that cable MSOs, most notably those in South Korea, Taiwan and Hong Kong, are finding themselves under siege from the increasingly impressive speeds offered by telecom operator’s FTTH/B services. As a result, these MSOs are in need of an upgrade path or else face the possibility of seeing subscribers migrate in large numbers to the higher speeds offered by telecoms operators.
“There really isn’t much more you can do with 1Gbps that you can’t do with 50Mbps,” a South Korean MSO executive told Informa. “The problem is that it really becomes an issue of perception. If your rival is offering faster speeds than you and at cheaper prices, then it becomes very hard to stop subscribers from churning, simply because they feel that the higher speeds are giving them more value.”
As a result, operators in many Asia Pacific markets are being forced to upgrade networks not because they are short of network capacity but simply because they are being forced to by competitive pressures from rivals.
Cisco officials say they see South Korean MSOs as likely to be early adopters of high-speed HFC technology, a prediction that is likely to be proved correct as South Korean MSOs look to counterattack once broadband-market leader KT eventually launches its own commercial 1Gbps services on a wide scale, probably in the next year or two.

Original article: Will Asia Pacific MSOs embrace superfast cable services?