Comcast Corp. (CMCSA) is aggressively deploying Docsis 3.0 technology to upgrade its existing customers to high-speed network. Docsis 3.0 (also called Wideband network) is a digital channel-bonding technique that creates one larger and faster logical pipe to support throughput of at least 100 Mbit/second. Recently, management announced that it expects to upgrade around 40 million homes and businesses of the company’s existing networks with next-generation super-fast wideband technology by the end of 2009. This revised estimate exceeds Comcast’s previous guidance of 30 million homes and businesses.
With Docsis 3.0, Comcast is now able to offer one of the fastest Internet speeds available in the market. The company has not only doubled the speed for its customers but also offers new higher-speed service plans. Offering high-speed Internet access has become essential for service providers since preference for video-on-demand (watching movie on the Internet) has increased among customers. In addition, demand for online gaming and downloading of various multimedia applications has also grown significantly.
Comcast posted solid growth in the second quarter. However, it lost 214,000 basic video customers during the period. US telecom giants are gradually expanding their fiber-optic networks to take the fight to cable MSOs. Verizon Communications (VZ) with FiOS network and AT&T (T) with U-Verse network are likely to make broader entertainment, information and communications markets highly competitive. Quest Communications (Q) is also planning to start implementing VDSL-2 based high-speed network.
Implementation of Docsis 3.0 has also improved Comcast’s bottom line. For most of its installations, the company is using denser cable modem termination system (CMTS) blades that reduce downstream port costs by more than 50%. It has undertaken a project to reclaim 40 to 50 of its existing analog channels to free up spectrum for Docsis 3.0. We believe the major beneficiaries of Comcast’s nationwide Docsis 3.0 deployment will be Arris Group (ARRS), Thomson S.A. (TMS) and Motorola (MOT).
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