Well Tim, my opinion is a little biased (I work for one of the telcos). We are overbuilding TCI with HFC in one large city, and offering cable TV to several thousand customers. I don't know of any former TCI customers that have switched back. Everywhere our crews go to activate the new system, people ask how soon we will be turning up their neighborhood so they can switch. Our marketing people don't have to work very hard, in fact they have new customers on a list waiting for the system to get activated. In addition to analog video, several thousand customers will be cut over from their twisted pair copper telephone lines to the HFC system by the end of the year. It is one of the few truly integrated broadband networks around. The hardest part has been getting the telephone services working in the HFC network due to new software and hardware. If telephone on a new HFC system is a stretch for a telco, just imagine the hurdle for a cable co! (see my recent post in the "Last Mile" thread regarding power) In contrast, for a telco to offer video service over a HFC network is not that big of a hurdle, because the technology is mature.
In a few more months, our digital wireless video system fires up to reach more than 5 million homes in Southern Calif, followed by San Diego and San Francisco. It is MMDS based and will offer over 100 local and cable channels for about the same price as monthly cable service. That should take a chunk out of the cable business, too.
So, in areas where there is no competition, cable cos. will do ok. In other areas, they will face competition that will hit the revenue stream pretty hard. Most cable cos are in debt to the ceiling already, and they will have a hard time upgrading their networks if their existing revenue streams taper off by 10 to 20 percent. Ray. |
