Cable TV factors in fiber growth

March 1, 1998

Cable TV factors in fiber growth

As customer demands for more cable-TV channels force multiple system operators (msos) into network upgrades, research firm Frost & Sullivan of Mountain View, CA, predicts that total revenues for the cable-TV and associated technology market in the United States will grow from $3.9 billion in 1996 to $8.9 billion by 2003.

The company?s new report, US Cable Television and Associated Technology Markets, covers the market from 1993 through 2003.

The 1996 market figure represented an annual growth rate of 10.2%, according to the report. The report predicts that by 2003, the market will reach $8.96 billion with a compound annual growth rate (cagr) of 12.6%.

The main drivers outlined in the report are customer demand for more channels, forcing msos into network upgrades and new equipment purchases; competitive pressure from digital broadcast satellite and multichannel multipoint digital services; transition from coaxial to hybrid fiber/coaxial-cable (hfc) infrastructure, resulting in equipment upgrades; and increasing demand for more advanced digital equipment.

Market restraints listed in the report include financial problems of cable network operators that limit their investment capabilities; competition endangering profitability of network service providers and a decrease in their borrowing power; high acquisition costs of digital equipment causing purchasing delays for cable network operators; and slow growth in the subscriber base delaying purchasing decisions of msos.

The report divides the market into three areas: cable-TV transmission and distribution lines; cable-TV transmission and distribution equipment; and cable-TV headend and studio equipment.

The cable-TV transmission and distribution lines market consists of three categories?the cables market, satellite earth stations market, and microwave market. The cables market comprises coaxial cables and fiber-optic cables. The transmission and distribution equipment market is composed of addressable and nonaddressable converters, amplifiers, distribution equipment, and traps. Headend and studio equipment are subdivided into headend equipment and video/audio production and postproduction equipment.

In 1996, the cable-TV transmission and distribution lines market generated $1.41 billion in revenues. The report forecasts that by 2003, the market will reach $4.65 billion, with a cagr of 18.6%. The main market drivers are

Y the transition from coaxial cable to hfc

network infrastructure,

Y the demand for advanced digital cable,

Y wireless growth stimulating sales of mi-

crowave transmission and distribution equipment,

Y network upgrades resulting from a shift

from one-way transmission to two-way delivery.

Major restraints on the market predicted in the report include

Y cash-flow problems of cable network

operators,

Y growing competition from direct broadcast

satellite and multipoint multidirectional distribution systems,

Y high costs of new equipment delaying

decisions to upgrade equipment,

Y expensive deployment of fiber and mi-

crowave broadband delivery in rural areas, curbing demand.

The report is available from Frost & Sullivan for $2295. For more information, contact Frost & Sullivan at tel: (415) 961-9000, fax: (415) 961-5042. u

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