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The Wait
for IP Slows Down Cable Telephony
SCOTTSDALE, Ariz., August 6, 2001
- Even though the technology standards and certification processes
have been in place for years, the roll out of IP (Internet Protocol)
cable telephony has taken longer than the industry anticipated,
according to Cahners In-Stat Group (http://www.instat.com).
The high-tech market research firm projects that it will be late
2002/early 2003 before any widespread deployments of IP-based cable
telephony occur. Until then, cable operators who offer telephone
service will continue to rely on traditional circuit-switched technology.
Even with the delay in provisioning
IP-based technology, cable telephony will still see solid subscriber
growth over the next five years. Total worldwide cable telephony
subscribers are forecasted to rise from 2.8 million at the end of
2000 to over 15 million by 2005, with the vast majority of subscribers
residing in North America and Western Europe. Resulting worldwide
cable telephony revenues will rise from $1 billion in 2000 to over
$6.5 billion in 2005.
Transforming a one-dimensional business
like cable into a multi-transactional operation is a major challenge
for today's cable operator. "On one hand, cable operators know that
the technical challenges of cable telephony are not beyond their
capabilities given that they have already mastered the provisioning
of both digital video and data services. On the other hand, the
same operators are quite aware of the service and support challenges
that come with telephony service," says Mike
Paxton, Senior Analyst with
In-Stat's Converging Markets & Technologies Group. "Issues like
billing by the minute, lifeline service, and line powering represent
unfamiliar territory for operators accustomed to only providing
pay television services. And when you factor in the change from
circuit-switched technology to Voice-over-Internet Protocol (VoIP),
it is understandable why many cable operators have shied away from
the whole issue."
Even with most cable operators delaying
voice service, other operators like AT&T Broadband, Cox Communications,
and Telewest already have hundreds of thousands of cable telephony
subscribers. Paxton points out that "the revenue opportunities offered
by cable telephony remain very attractive, and with cable TV subscriber
growth rates flattening in North Americas and Europe, any service
that increases revenue-per-subscriber is difficult to ignore."
In-Stat has also found that:
- Consumers signing up for cable telephony
service are influenced by three main factors: discontent with
their local exchange carrier (LEC), attractive price discounts
on both primary and additional telephone lines, and compelling
"service bundles" that can include cable telephony, high-speed
Internet service, and digital cable TV service.
- In North America, there will be
almost 1.7 million subscribers by the end of 2001. Outside of
North America, the United Kingdom has the greatest number of cable
telephony subscribers, followed by Australia and the Netherlands.
- During the next several years, few
subscribers will actually be using IP cable telephony service.
Circuit-switched service or a twisted-pair overlay service will
account for the lion's share of subscribers. In-Stat forecasts
that IP cable telephony subscribers will reach 5 million in 2005,
just one-third of total worldwide cable telephony subscribers.
The report, "Waiting
for IP: Cable Telephony on Hold" (# MB0108DC), examines
telephony services over hybrid fiber coaxial networks and covers
the issues surrounding the introduction of cable telephony service,
including the development of standards, the different voice architectures/technologies
available, and cable telephony service challenges. In addition,
it profiles cable telephony equipment vendors and cable MSOs in
order to highlight their service strategies. The report also provides
forecasts for worldwide cable telephony subscribers, IP cable telephony
subscribers, and worldwide installed cable telephony lines through
the year 2005. It also forecasts cable telephony service revenues
for the next five years. In addition, it presents the results of
a survey of cable operators in the U.S., inquiring about their plans
to provision cable telephony through 2002. To purchase this report,
or for more information, please contact Matthew
Woods at 617.630.2139; mwoods@instat.com.
The report price is $2,995 USD.
Cahners In-Stat Group (http://www.instat.com)
covers the full spectrum of digital communications research from
vendor to end-user, providing the analysis and perspective that
allows technology vendors and service providers worldwide to make
more informed business decisions.
In-Stat is a unit of Cahners Business
Information (http://www.cahners.com),
a leading provider of critical information and marketing solutions
to business professionals and a member of the Reed Elsevier plc
group.
For more information,
contact:
Mike
Paxton, Senior Analyst - Converging Markets and Technologies
Phone: 480.483.4462
Email: mpaxton@instat.com
Kirsten Skedd,
Marketing Manager
Phone: 480.609.4534
Email: kskedd@instat.com
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