Cable bandwidth crisis looming, says report

August 14, 2007 -- Escalating demand for bandwidth-hungry services such as HDTV and online gaming is gradually draining capacity from cable operators' networks, according to ABI Research.

August 14, 2007 -- Escalating demand for bandwidth-hungry services such as HDTV and online gaming is gradually leading to a critical lack of capacity in cable operators' networks, according to a study from ABI Research.

The firm reports that the several solutions available to alleviate the coming shortfall will collectively account for some $80 billion in worldwide in investment over the next five years.

"Cable TV operators trying to satisfy the increasing bandwidth demands of HDTV customers feel very much like the thrifty grocer who tried to cram ten pounds of potatoes into a five-pound bag," comments ABI's vice president and research director Stan Schatt.

According to ABI, some of the solutions noted in the study, such as rate shaping and expanding the broadband spectrum beyond 750 MHz, have already been undertaken by some cable operators, particularly in the United States.

However, the firm says that a number of other solutions will come into play during the study's 2007 - 2012 forecast period, including spectrum upgrades coupled with node-splitting, switched digital video, PON overlay, MPEG-4 compression, and home gateway bandwidth management solutions.

All such solutions involve tradeoffs and balancing of cost versus benefit, and some are more applicable in certain circumstances than others. The firm contends that the best real-world solutions for particular operators may be determined using several cost models developed for the research: an ROI model, a Cost-Benefit model, and a Relative Cost model.

The study, "Assessing CATV Bandwidth-Expansion Solutions," applies these models to the various ways of expanding the spectrum and bandwidth of video networks. The report forms part of ABI's "Broadband Networks" and "Multi-Channel Video" subscription research services.

"The increasing bandwidth demands on cable operators will soon reach crisis stage, yet this is a 'dirty little industry secret' that no one talks about," concludes ABI's Schatt.

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