I look to the UK for guidance, the cable industry over there pulled twisted copper
in the same cladding as the coax to offer apples to apples local phone service.
They did not and will not here in the U.S. since voice on cable using DOCSIS 1.1 and MCNS will support quality telephony on cable infrastructure..they will not pull new coax with twisted pair. Furthermore service will be offered by telephony giant AT&T and customers will flock to get around their local service provider for two reasons. Simplicity - single billing, and cost - AT&T's infrastructure will provide a lower cost basis and existing TELCO's will not be able to compete.
US telcos I have talked to on this issue expect to keep the lion's share of their
telephone business to customers who subscribe to cable modem service.
Wishful thinking. These guys are not leading the charge to the multiservice nets of tomorrow. They in fact are trying to slow it down. They're schizoid. They want to be regulated so they can own all new services offered by deploying broadband DSL, but they want de-regulation so they get into new markets and compete. They'd better move soon or AT&T and other progressive companies will bypass them completely. The result - fewer customers for the LEC's, lower revenues, and less money to add new services.....and a reduced need to deploy new circuit switches.
the greater question is how many US households will adopt cable modems. About
35% of US households have PCs, growing 4-5% a year
Check your data. I've heard 50% penetration currently and 10% growth. Furthermore new, low cost, single purpose devices for accessing the internet on cable will be available shortly. This will bring new non-PC literate customers into the fold.
Many will not have two way capable cable systems and/or do
not subscribe to cable.
HFC networks upgrades have been in process for a couple of years. the cable industry is well on their way here..... I wouldn't bet on their failure especially given the cash that T will bring to bear.
T will have to resolve the shortage of capable installation
personnel that plagues the cable industry.
Agreed.
5 year forecasts of cable modem
subscribers range from 5 to 20 million
Again, our numbers differ. In my discussions with developers of both STB, ASTB, and platforms forecasts are for 10M by end of 2001 and 50M by 2005. Even so if we use your numbers of a 6% take rate.....what did you say POT's growth rates were? I'd have to go back and look but I could swear you said 6%. That would mean if we use your conservative estimates the TELCO's would be treading water.... offering little in the way of value add. That's not going to last and again, no reason to add new 5E's. Furthermore with no new services customers will move to new cable infrastructure at a faster and faster rate.
we'll see a slow deceleration in POTS line growth rates starting in 2000
in US IMHO.
OK.... now we're getting somewhere....
The challenge for LU will be to get their share of the alternative access market,
YES YES YES>.. That is THE issue and the question I posted earlier. Now the question is how will LU do this given reliance on 5E's for significant portion of their revenues. They either have to make the jump and say - yes new alternative services and deployments are the way to go or not. If they do then existing carriers will likely shy away from deploying new 5E's...notwithstanding that they will not have a need do to slow POT's line growth. If LU chooses to continue to press this "older" technology then they risk missing the wave. Again, I don't think LU is in the cable space at all right now..... are they???
Just a note: in Europe, where they still have variable charges for local
calling, ISPs will have one dial up port for every 25 subscribers (more like 10 to 1
or less in US). These charges are coming down and will likely go away - you
remember what happened when AOL went to flat rate pricing? Great for RAS,
Great for internet backbone eqt. (CSCO) Also great for POTS line growth.
Are you saying FREE TELEPHONE CALLS? Are you saying these moves are good for CSCO?! C'mon...now you're sounding like John Chambers. <vbg> Anyway, I agree with you. The cable companies already have this down...they understand service based pricing - ala Pay-per-View. As for portals...I would expect the portals to align themselves with the MSO's... the connection into the portal will be free and the portals will make their money on advertising. The ISP's themselves will have no choice other than to offer free access...the RBOC's will still charge (since they are still bandwidth focused - sad) and the ISP will pay for those charges...simply to keep their customer base. That is not a sustainable model.
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