Stable 5-year growth projected for U.S. MSO equipment

U.S.-based multiple-system-operator (MSO) spending on transmission, routing, and switching equipment should see sequential growth, with total aggregate spending of about $3.2 billion over the next five years, according to new research from CIR (Charlottesville, VA).

Cisco Systems, notes the report, has become the most successful vendor to cross over to the cable industry from the telecommunications and enterprise markets and has become the dominant supplier of cable-modem termination systems (CMTSs) as well as switching and routing equipment. The company has shaken off all serious competition in the headend cable-data market and, with the exception of ADC, has left everyone else scrambling for inconsequential contracts and international opportunities, say CIR analysts.

The MSOs have won broadband, claims the market research firm. While some observers still expect DSL, 802.11, or even satellite broadband to gain share, CIR expects cable to continue its residential broadband domination, with around 65–70% of the market. The fastest-growing MSO service—residential broadband Internet—should jump from about 15% of cable revenue today to about 30% in 2007. It will continue to be the application that determines MSO networking decisions instead of video on demand.

MSOs have surpassed the long-distance companies as the biggest threat to the RBOCs selling Ethernet. CIR notes that while interexchange carriers and competitive local exchange carriers typically fall on top of each other trying to grab the biggest customers in the largest markets, the MSOs stick to only those cities where they have existing franchises and can leverage existing infrastructure. Moreover, they are not afraid to slash pricing when chasing accounts.

For more information about the report, "Transmission, Routing, and Switching in the Cable Network," visit www.cir-inc.com.

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