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Update Cable's Not So Secret Weapon - 04-April-2008, 18:39

Cable's Not So Secret Weapon

Cable has a not-so-secret weapon for its efforts to compete in the multiplatform industry.

High-speed internet access continues to be a big winner for cable operators. The service from MSOs has attracted millions of customers every year, despite the fact that enrollments aren't what they used to be for the business. More importantly, the speedy Web services have kept customers with their respective cable operator.

And this week the cable internet product apparently got better - and faster - with the boost it's getting from DOCSIS 3.0.

On Wednesday, Comcast launched high-speed internet service with DOCSIS 3.0, or wideband, in the Twin Cities region of Minnesota. The service delivers up to 50 Mbps downloads and 5 Mbps uploads.

Not only is this a bonus for residential customers, but the technology could help Comcast and other MSOs attract key business/enterprise customers.

That's critical given the fact subscribership to cable modem service is slowing.

According to Leichtman Research Group, MSOs added 4.1 million broadband subscribers in 2007. That's down from 4.8 million net additions in 2006 and 4.5 million in 2005, said the New Hampshire-based firm.

Even if net customer additions are slowing, cable continues to dominate the broadband space. Leichtman said MSOs finished 2007 with 35.5 million broadband subscribers, making up the majority of the nearly 62 million consumers tapped into high-speed internet access in the U.S.

And while some have suggested the broadband market is maturing, "There is still plenty of growth left in the high speed data market," said Comcast's Stephen Burke on the company's fourth quarter conference call.

He added, "If we maintain around a 50 percent share and broadband penetration reaches 80 percent, as many have suggested, we'll eventually reach 40 percent penetration or nearly 50 percent more subscribers than we have today."

Comcast finished 2007 with 13.2 million high-speed internet customers.

The video business isn't what it used to be for cable, with the industry suffering hefty basic customer losses every quarter. Nonetheless, the industry has proven it can compete with others in the multiplatform space, not only with broadband but also with video-on-demand, digital video and telephony, all growing services for the industry.

And that means cable's competitors - including DBS - still must keep a very close eye on the wired multiplatform incumbent.

(More about cable's effort in the broadband and multiplatform space can be found in this week's issue of The BRIDGE:
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