<I recently came across an estimate that it costs about $125 per home for a cable operator to upgrade from traditional service to advanced HFC.>
I think their estimate is light-most people I talk with are looking at $200/home just for the HFC upgrade, and then you still have to pay to activate the return channel (primarily replacing/adding amplifiers). Time Warner says their cost to become interactive-ready for telephony and data is $360/home passed. To do data access, you then have to add in the head-end networking equipment (routers, servers, management software, and systems integration expenses), which can easily run another $40-$50/home passed. Figure that only 60% of the homes passed actually subscribe to cable, and only a small fraction of those are going to sign up for the new data service in the first year or two, and the cost per actual subscriber gets up in the thousands for those early subscribers, because you have pay for the entire upgrade and much of the networking build-out before you can start generating revenues.
Now add in the modem, at $500 today, dropping if/when volume builds, and easily $125 in installation costs, and you can see that someone is going to have to front a lot of $$ to get this capability in place.
I think there will be a good market for the vendors of advanced modulation capability in the upstream, which will allow the MSO to start provisioning the service without doing the HFC upgrade (still have to activate the return path, but no backhoes required). With this technology, the MSOs can adopt much more of a pay-as-you-go approach, which is more consistent with the midset of the typical cable exec. (IMHO). |
