Comcast is targeting “less than $200” per location to upgrade its network to support higher and more symmetrical broadband speeds, but Charter is only targeting $100 per location with the same goal, note financial analysts from MoffettNathanson in a research note. The analysts delved into the differences between what the two companies are planning and speculated about the difference in cost estimates.
The upshot, according to the authors, is “we believe Comcast’s and Charter’s approaches are each grounded in economic and competitive reality.”
Charter Comcast Network Upgrades
The number of locations targeted for the two companies are similar – 50 million for Comcast and 55 million for Charter. The key differences between the anticipated costs, according to MoffettNathanson:
- Charter’s plans call for upgrading to DOCSIS 4.0 for only 85% of its target 55 million locations, while Comcast DOCSIS 4.0 plans apparently encompass all 50 million of that company’s target locations.
- The two companies plan to use different DOCSIS 4.0 options. Charter plans to use Extended Spectrum DOCSIS (ESD), while Comcast plans to use Full Duplex DOCSIS (FDX). The former dedicates different frequencies to upstream and downstream communications within the coaxial portion of a hybrid fiber coax (HFC) connection and supports greater capacity on the downstream path. The latter enables all the spectrum within the coaxial connection to be used for upstream and downstream communications simultaneously, enabling more symmetrical communications.
- FDX is expected to be less costly eventually because it minimizes the need to make certain additional investments in the network, such as certain taps, but it requires special amplifiers that require further development, particularly if they are to become cost effective, according to the analysts. As a result, Comcast may need to accomplish its network upgrades in two separate steps, increasing upgrade costs, the analysts speculate.
- Charter already has made greater use of switched digital video (SDV) in its network, eliminating the need to dedicate spectrum to content that isn’t being watched and therefore making more spectrum available for broadband.
In either case, the analysts estimate that it will cost the companies $200 to $300 per home passed in “long-term upgrades toward full DOCSIS 4.0 implementations/ symmetrical 10G plants.”