Record high year for cable broadband market;
Comcast to pass 65% of homes with DOCSIS 3.0 in 2009

ANALYST NOTE

“The cable broadband market posted a record year at $1.2 billion in worldwide revenue as the long-term DOCSIS 3.0 strategy trumped short-term economic concerns and operators upgraded or bought ports in record numbers. Normally, vendor revenue decreases significantly in the quarters or year following heavy port investment, but 2009 will be a different story. Yes, revenue is going to dip, but not nearly as much as one would normally expect, because cable operators are going to continue purchasing CMTS and universal edge QAM equipment, just at a slightly slower pace. With the telcos breathing down their necks, cable operators aren’t about to roll over and sacrifice the tremendous gains they’ve made in broadband and telephony subscribers.”

Jeff Heynen, Directing Analyst - Broadband and Video, Infonetics Research

REPORT HIGHLIGHTS

• 2008 was a banner year for the cable broadband hardware market, worldwide revenue for which jumped 35% from the previous year to $1.2 billion, led by aggressive deployments of CMTS downstream ports to support channel bonding
• For the quarter, the combined CMTS and universal edge QAM (UEQ) markets increased just 3% in 4Q08 to $275 million, on the heels of a 28% decrease in 3Q08
• The economic uncertainty and decrease in housing starts in the US contributed to the flat quarter, but will have more of an impact throughout 2009 as cable operators pull back on downstream port rollouts until subscribers are ready to spend again and upgrade their broadband services
• Despite the economic uncertainty, cable operators have three strategic goals that will sustain their CMTS and UEQ investments during the downturn:
• Expanding DOCSIS 3.0 footprint
• Transitioning from T-CMTS and I-CMTS to M-CMTS architectures
• Introducing hybrid IP/QAM video services to support tru2way and DVB-MHP services
• Yesterday, Comcast announced it expects to pass 65% of all North American homes with DOCSIS 3.0 in 2009
• However, subscriber uptake in North America will be limited in 2009 and 2010, mainly due to economic pressures and high cable prices
• Other regions will see better subscriber uptake rates because pricing is competitive with telco fiber and VDSL offerings
• In Japan and South Korea, J:Com, CJ Cablenet, and others have already passed 80% of their subscribers with DOCSIS 3.0 and are expected to complete their buildouts this year
• In the near term, UEQs will be deployed in increasing numbers to support M-CMTS and switched digital video rollouts, and in the longer-term, to support the move to cable IPTV and switched unicast offerings

REPORT SYNOPSIS

FOR MORE INFORMATION

Infonetics Research (www.infonetics.com) is an international market research and consulting firm serving the communications industry since 1990. A leader in defining and tracking emerging and established technologies in all world regions, Infonetics helps clients plan, strategize, and compete more effectively.

# # #