Cable-TV industry faces uncommon challenges
George D. Miller
Confronted by formidable business, operation and technology issues, cable operators need to craft beneficial decisions.
For the cable-TV industry, the business horizon is fraught with challenges. As cable TV attempts the transition from video entertainment supplier to full-service, interactive video-data-voice provider, the challenges appear to come from all fronts--technical, regulatory, business/economic, both within the cable-TV industry and outside it.
Prospering in this environment requires a more sophisticated combination of business and technical savvy than ever before. On the technical front, the permutations of the basic hybrid fiber/coaxial-cable architecture continue at a dizzying pace. Variations based on calculations of subscriber density factored against the kinds of services that will be offered abound, but who`s to say if or when the services offered will be used? Even if you`re confident about demand, you still have to wrestle with questions of willingness and ability to pay for the services.
Concerning network architecture, the influence of the telecommunications industry is apparent--its higher reliability levels are becoming a benchmark for the cable-TV industry. Considering both reliability and interactive services, aggressive deployment of fiber remains part of the plans of the largest multiple system operators. But even the smaller MSOs are deploying fiber whenever they can. It`s justifying the depth of fiber penetration that becomes problematic, given level-of-service uncertainties.
Currently in the local loop, the battle is over existing telecommunications market share and customer loyalty. Such business basics cannot be taken lightly when the cable-TV and telephone industries will be offering the same services to consumers, no matter how much bigger the "big picture" might appear. And let`s face it: The cable-TV industry is still wrestling with an attitude problem in the eyes of many consumers. Articles such as "Viewers` Horror Stories Cast Cable TV as Villain" in the March 8 edition of The Wall Street Journal are still more common than articles assailing telephone-company service.
In this environment, service providers need to rely on the expertise of others around them. Symbiosis will lead to survival. Suppliers are already working with service providers to help them characterize their requirements and make technology and network platform decisions. Suppliers, likewise, are forging relationships with other suppliers to develop well-rounded product offerings. Expect such symbiosis to continue, and even increase, as MSOs themselves continue to consolidate.
So that`s the business landscape. Here`s an industry call to action that can be drawn from this perspective:
From a company point of view, keep your eyes peeled for opportunities--consolidation among MSOs continues to make sound business and economic sense.
Ask questions and prepare for new thinking regarding the applicability of any technology to this industry`s changing needs. Prepare for new thinking on hybrid fiber/coaxial-cable platforms and how they are best applied to your needs. Remain aggressive in fiber deployment and make sure Sonet and WDM are part of your vocabulary.
Accept the fact of growing complexity in your business and economic models. The short-term war is about existing telecommunications market share and customer loyalty. The multimedia war hasn`t started yet. You`ll wind up fighting both, of course, but the economics of the network architectures required for both may be vastly different.
Develop programs for training your crews to manage and maintain your more sophisticated networks.
Take network reliability and customer satisfaction very seriously. Make sure the rest of your organization does, too.
Work closely with your suppliers and allow them to help you characterize your network requirements.
Support your suppliers in their attempts to partner with other suppliers.
On the regulatory front, use your lobbying power.
There is nothing straightforward about the challenges you face. So proceed cautiously and stay well informed.
George D. Miller