Fiber Optic

A growing number of cable companies are either planning to upgrade or currently upgrading the fiber potion of their networks to 25GS-PON, according to Dell’Oro Group analyst Jeff Heynen.

The business market is an important one for cable companies, and, as Heynen noted, the cablecos believe it is important to be able to deliver true 10 Gbps speeds — a goal that requires 25GS-PON. The cable companies also see 25GS-PON as a means of enhancing their competitive position against fiber broadband providers that have deployed GPON or XGS-PON, he said.

One example of a cable company making the move to 25GS-PON is Service Electric Cablevision. The company, which claims to have deployed the first cable system in the United State, will pass 200,000 new and existing homes in Pennsylvania.

Dell’Oro Group expects to see similar projects from other cable companies.

Beating fiber-based providers who are encroaching on their territory obviously is an important objective for cable operators. But it may only be their secondary goal. Their primary goal, according to Heynen’s analysis, likely is to dissuade competitors from even trying.

Cable companies’ thinking, he said, is that once cable companies are delivering 10 Gbps services across their fiber footprint, competitors will have less incentive to overbuild.

The move to 25GS-PON also is an acknowledgement that the industry’s fundamentals have changed. Streaming video has gained in popularity among consumers at the expense of traditional video packages from cable and telephone companies. Many customers are streaming content and using smaller cable packages for local channels.

Source: Dell’Oro Group

In this environment, 25GS-PON provides cable operators with the flexibility to protect their customer base, Heynen writes. In other words, if traditional customers are churning or reducing their traditional video packages, it makes sense for cable operators to offer the delivery platform to which they are moving.

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