US cable TV operators look to bolster their mix of digital services

March 6, 2003--In a recent survey conducted by market researcher In-Stat/MDR, US cable TV operators indicated that they have completed most of their bandwidth upgrades and are now focused on driving new revenue-generating services through these upgraded systems.

Mar 6th, 2003

In a recent survey conducted by market researcher In-Stat/MDR, US cable TV operators indicated that they have completed most of their bandwidth upgrades and are now focused on driving new revenue-generating services through these upgraded systems.

Nearly 90% of the cable TV operators surveyed already offer digital video programming services, and nearly that amount currently provide high-speed data services with cable modems. Now, they are focused on rolling out services specifically requested by their local subscriber base, including Video-on-Demand (VOD) and High Definition TV. Cable TV's "triple play" is on the brink of coming to fruition, says the report, with two-way systems ready to provide a bundle of two-way services, including telephony services, interactive digital video products, and high-speed data service.

"Even as digital cable services become more widely available, there is still plenty of room for US digital cable service subscriber growth," contends Gerry Kaufhold, principal analyst with In-Stat/MDR. "In-Stat/MDR's survey highlights that the current median penetration rate for digital cable services is only between 21% and 30% of total system subscribers. This leaves plenty of room for continued long-term growth for digital cable TV."

The report also finds that:
• VOD is a key high value service; 28% of those surveyed have deployed VOD services while an additional 20% plan to offer the service by the end of this year.

• Fifty-eight percent of respondents have 750 MHz or more bandwidth on their cable TV systems, which is more than adequate to provision the whole range of "triple play" services.

• Digital video and high-speed data are the two most popular digital cable services; 86% of those surveyed are currently offering digital cable video services, while 78% are offering cable modem services.

• Due to both investor pressure to lower debt levels and the advanced state of infrastructure upgrades, US cable industry capital expenditure is projected to decrease to $11.7 billion this year, down from $13.3 billion in 2002.

The report, "MSO Survey: US Cable Operators Fine Tuning Their Bundle of Digital Services," is based on a survey of 50 different cable operators from 30 different states. Analysts examine the current market for digital services as well as future plans for advanced service rollout. For more information, visit the company's Web site at www.instat.com.

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