A long article on Cable Telephony in Telecommunications Magazine, thanks to a post by Steve Sacco on the Com21 board:
telecommagazine.com
A partial reprint follows, the full text can be found at the above link.
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Cable Telephony: Say Hello to Your New Phone Company by Sam Masud
Cable companies have to invest hundreds of dollars to deliver phone service to just one customer. But they payoff could be huge if their subscribers start thinking of them as more than just the local cable TV provider.
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While telecom industry players focus on getting into--or holding onto--the local market, the real competitive threat may come from another quarter. Cable television system operators, such as MediaOne and Cox Communications, have launched a stealth attack on local phone service. They are emerging as competitive local exchange carriers (CLECs) and are attempting to woo the phone companies' residential customers with lower prices and promises of superior service.
AT&T's proposed acquisition of cable giant Tele-Communications Inc. lends a certain legitimacy to the cable network as a vehicle for delivering phone services. Recently, AT&T put its imprimatur on cable telephony as a viable technology by awarding a potential $900-million equipment contract. The clear message to phone companies: Don't underestimate cable operators' potential to cut into the $100-billion business.
Certainly, the deployment of cable telephony ports is small potatoes right now. The number of phone lines supplied over cable networks hovers between 150,000 and 200,000 worldwide. Providers of telephony equipment for cable networks, such as Motorola, ADC, Tellabs, and Arris Interactive, have had more success abroad thus far than in the United States. Motorola, for example, has installed systems in Australia and Belgium, while Arris Interactive, a joint venture between Nortel and cable equipment maker Antec, has sold systems in Japan.
But cable companies have also shown that they can strike quickly into the territories of the local phone companies. According to a recent article in The Wall Street Journal, almost 20 percent of Cox Communications' customers in Orange County, Calif., who had access to Cox's new phone service had dropped their local phone company in favor of the new service. MediaOne began offering local phone service to about 35,000 homes in Los Angeles earlier this year. The multiple system operator (MSO), as these cable companies are called, has plans to make the service available to more than a quarter million homes by the end of the year. |
