The traditional telephone carriers and the cable multiple systems operators (MSOs) are squaring off in an attempt to wrest customers away from each other. Both are entering the triple play arena-the MSOs through the addition of voice services and the telcos through the addition of video. While each provider’s existing network is radically different from the other, the networks they’re currently building to support triple play services are actually quite similar.
Before the MSOs decided to challenge the telcos with a triple play offering, the two camps had deployed differing network topologies. In the telco world, SONET/SDH is king, whereas the MSOs favor Ethernet and IP for their current video service delivery. The telcos have a large installed based of legacy equipment to contend with, while the MSOs can more quickly deploy next generation optical technology like wavelength switches and ROADMs. But the drivers for those networks represent perhaps the biggest difference between the two.
“If you look at the telco world, typically they respond to very-high-end business needs, commercial services,” reports Al Lundsbury, director of Nortel Networks’ MSO optical solutions division (Ottawa, Ontario). “But a radical shift is occurring. The consumer is now driving the bandwidth, not business.”
The cable operators have always been more consumer-centric, and today’s consumer is demanding very-bandwidth-intensive services, including video on demand (VoD), digital video recording (DVR), and IPTV. As a result, video bandwidth is justifying most of the new growth in the cable MSO sector, says Lundsbury. “What the cable MSOs are preparing for-and we’ve answered RFPs that are worded this way-is, ‘Imagine how much bandwidth we need to deliver a personal video stream to each individual subscriber,’ ” he reports. “That is where the MSOs are headed.”
These bandwidth-intensive video services are prompting the MSOs to build out their metro networks with WDM, adds Sterling Perrin, senior research analyst of optical networking at IDC (Framingham, MA). He estimates that 15%-20% of North American metro WDM sales come from the cable MSO market. “It’s really metro WDM where you are seeing the growth opportunity and a lot of the buzz from the MSOs,” he says. “The enormous push is into the video on demand application, which is mostly WDM, some MSPPs [multiservice provisioning platforms]. Those would be the two major technologies that the optical vendors are able to sell to the MSOs.”
The cable operators’ need for greater bandwidth and increasing network flexibility is also driving their early adoption of wavelength switches and ROADMs, adds Winston Way, CTO and founder of OpVista, an Irvine, CA-based startup that has been successful in the MSO space, inking deals with Cox Communications, among others. “As soon as individualized video content becomes a real trend, the number of wavelengths will just keep on increasing,” he says.
Moreover, many of the cable companies today have separate networks for video and data service delivery, and they are converging those networks into a single optical network, with one wavelength for video and another for data.
As the traditional telephone carriers and cable operators start to move into triple play, their networks will begin to look very similar, says Perrin. “From a next gen perspective,” he explains, “the cable MSOs do have a bit of an advantage coming from what is essentially a greenfield perspective moving into WDM. They can use Ethernet and DWDM as the transport layer of their networks, while the telcos are always going to have to struggle with the legacy SONET transport network that is in place.”
While the telcos are deploying fiber to the premises, curb, or node, the cable MSOs will likely embrace fiber to the node as their architecture of choice, because it will enable them to leverage the existing coaxial cable plant.
The road to triple play may not be smooth for either camp, however, as both the telcos and MSOs face challenges. The MSOs already have a data strategy via cable modem, TV distribution is their bread and butter, and they were the first to offer a VoD service. For the MSOs, voice service delivery represents the final frontier. They will use VoIP technology, but their challenges do not end with technology choice. “The big one that is always cited is customer service and reliability of service,” says Perrin. “These have never been the hallmark of the MSOs, and that’s something that becomes more critical when you move into a voice network versus a TV network.”
The telephone carriers are also entering an arena completely foreign to them, and like the cable operators, their challenges are not limited to technology choice. There is a clear demand for video services, says Perrin, who notes that 90% of U.S. households already subscribe to cable. For the telco, then, the challenge is to build a business case that is compelling enough to lure those customers away from the cable operators-and to do it at a price that enables them to generate revenue from those services.
While he acknowledges that the telcos and cable MSOs could coexist in the triple play arena, Perrin contends that one will likely be more successful than the other. “Look at the broadband data market and how that emerged in the U.S.,” he says. “There is a coexistence of DSL and cable modem, but cable modem had become the dominant technology with about two-thirds of the subscribers on cable modems versus one-third doing DSL. So there’s coexistence, but the cable companies really won that battle,” he notes. “As they move into this next battle, it’s a question mark as to who is going to win that one.”