Comcast Initiates Nationwide Rollout Of DOCSIS 3.1 Gateway

Comcast Corp. (NASDAQ:CMCSA) has started the nationwide rollout of the DOCSIS 3.1 technology, with its latest xFi Advanced Gateway. Comcast will lease the DOCSIS 3.1-powered, multi-gigabit advanced gateway, formerly known as the XB6, for $10 a month in nearly 75% of operating area.

ARRIS International plc. (NASDAQ:ARRS) and Technicolor are the two major DOCSIS 3.1 equipment manufacturers for Comcast. ARRIS will use Intel Corp’s (NASDAQ:INTC) chipsets for its version, while Technicolor will manufacture another version using Broadcom (NASDAQ:AVGO) chips.

Comcast has been extensively deploying DOCSIS 3.1 network in several markets in the United States. The company has offered 1 Gbps downstream and 35 Mbps upstream speeds for DOCSIS 3.1 network. Comcast Business launched DOCSIS 3.1-based internet service to business customers in the Northeastern and Mid-Atlantic United States including Greater Boston, Greater Philadelphia, New Jersey, northern Delaware as well as in Baltimore, Charlottesville and Washington.

Upgrading to DOCSIS 3.1 will enable Comcast to compete against AT&T’s ongoing Fiber-to-the-Home (FTTH) program. We believe that DOCSIS 3.1 and Gigabit Pro rollout is slated to drive prospects.

The XB6 devices is compatible with DOCSIS 3.0 and DOCSIS 3.1 networks. XB6 also supports MoCA 2.0, dual-band 802.11ac WiFi, ZigBee, Bluetooth LE (low energy), as well as ports for digital voice services. The new gateway will have a 160 MHz-capable 8x8 Wi-Fi antenna array, Mu-MiMo (Multi-user, Multi-input, Multi-output) technology and a combination of specialized IoT radios.

Per sources, Comcast is chalking a retail strategy for the XB6, which will employ a new self-install system.

DOCSIS 3.1 versus DOCSIS 3.0

DOCSIS (Data Over Cable Service Interface Specification) is a communications protocol that allows cable MSOs to provide high-speed broadband connections. This technology was designed as the cable-TV industry’s answer to high-speed wireless and fiber-based wireline networks of telecom operators. The old-generation DOCSIS 3.0 technology has helped cable-TV operators compete in the race for fastest internet speed available in the market.

The next-generation DOCSIS 3.1 standard is an improved formulation of the existing DOCSIS 3.0. Theoretically, while DOCSIS 3.0 supports 152 Mbps download and 108 Mbps upload speeds, DOCSIS 3.1 offers as high as 10 Gbps downstream and up to 1 Gbps upstream network capabilities. Additionally, DOCSIS 3.1 comes with several operational benefits.

The technology is also backward compatible, allowing the present hybrid fiber-coaxial cable lines to allow high internet speed by simply switching to a DOCSIS 3.1 compatible modem. Although FTTH has the advantage of providing unlimited bandwidth, backward compatibility is a major advantage of DOCSIS 3.1. This allows cable MSOs to provide high-speed Gigabit broadband to customers, without having to incur additional digging or cable laying costs. This is expected to boost margins of cable MSOs.

Other Major Players Using DOCSIS 3.1

Leading European cable MSO Liberty Global plc. (NASDAQ:LBTYA) has decided to install DOCSIS 3.1 infrastructure during the fourth quarter of 2017. Mediacom Communications is also offering DOCSIS 3.1. Cox Communications is going through the trial phase of this technology.

Zacks Rank & Price Performance

Comcast currentlycarries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past month, the stock has returned 1.8% against the industry’s decline of 1.0%.

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