By: Douglas J Barnett

dbarnett@atlantic-acm.com

Background:

ATLANTIC-ACM recently completed the research dataset for its annual sizing and share report, and is presently assembling the study, tentatively titled Wireless Wins, Wireline Wanes: US Telecom Wired and Wireless Sizing and Share 2010-2015.   Several noteworthy trends are emerging relative to the cable segment:

• Expanding Presence in the Business Space: Among smaller- sized businesses, the cable modem will prove to be an effective broadband solution, with recent and planned wideband rollouts expanding the potential for higher-speed connectivity. ATLANTIC-ACM forecasts that are about to be released indicate that business cable modem revenues will grow at a CAGR of 10.1 percent from 2009 to 2015. As cable providers widen their focus to include medium- and large-sized businesses, IP Access, IP VPN and Transport (local and long haul) products will succeed as well, driven by growing demand for ubiquitous connectivity and capacity to support bandwidth-intensive applications.
  
• Cable moving up-market, introducing new products: Optimum Lightpath's recent announcement that it joined CENX's Ethernet exchange is just one example of how cable is looking to expand its next generation service offerings. Cablevision's move, through Lightpath, significantly expands its Ethernet footprint, enabling it to quickly create connections between multiple enterprise sites without the significant cash outlay. Comcast is reportedly committed expanding its product suite to include point-to-point and point-to-multipoint Ethernet services. Finally, look for cable providers to capture share in the IP VPN market as price-sensitive business buyers look to curb costs through cable's competitive bundles.
  
• Cablecos emerging as competitors in the cellular-backhaul market: Both Comcast and Time Warner Cable continue to report in their earnings call that mobile backhaul represents a growing opportunity on which they intend to focus. In interviews with providers, cable providers' Ethernet-over-fiber offers a competitively price alternative to traditional DSn or OCx transport solutions. As mobile data consumption continues to grow exponentially, wireless providers seeking cost-effective transport will increasingly look to cable providers. ATLANTIC-ACM forecasts total local wholesale transport will grow at a CAGR of 2.8 percent from 2009 to 2015, while cable's local wholesale transport revenues are forecasted to grow at a CAGR of 18.4 percent for the same time period.

The Bottom Line:

Cable is gaining traction in the business space as success of cable modem is complemented by growth in IP services and transport, both local and long haul. Cable's price competitive, Ethernet-over-fiber mobile backhaul service offers larger wholesale buyers the opportunity to save on cost-per-bit for transport. In ATLANTIC-ACM's soon to be released Sizing and Share, cable service revenues are forecasted to grow at a CAGR of 5.1 percent from 2009 to 2015.

Note:  "Wireless Wins, Wireline Wanes: US Telecom Wired and Wireless Sizing and Share 2010-2015" is slated for release August 16.  Contact us at +1 617 720 3700 to reserve your copy.