Major cable MSOs (multi service operators) across the world are gradually deploying high-speed Wideband network based on the DCOSIS 3.1 technology. The latest addition in this list is Liberty Global plc. (NASDAQ:LBTYA) , a leading cable MSO with operations in Europe and Latin America. The company recently announced that it will launch its first DOCSIS 3.1 service in 2017.
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 specifically designed to be the cable TV industry’s answer to high-speed wireless and fiber-based wireline networks of telecom operators. The currently available DOCSIS 3.0 technology has helped cable TV operators compete in the race for the fastest Internet speed available in the market.
The 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 such 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, which allows cable MSOs to provide high-speed Gigabit broadband to customers, without having to incur additional digging or other cable laying costs, unlike FTTH providers. This is sure to boost margins of cable MSOs.
The Bottom Line
Recently, increased cord cutting has put pressure on the pay TV industry, leaving them looking for alternatives for revenue generation. DOCSIS 3.1 is facilitating cable MSOs to explore new markets. The slump in the basic video market is being compensated by broadband services in the cable telephony and high-speed Internet markets. Escalating demand for TVEverywhere (watching movie on the Internet) has made DOCSIS 3.1 essential for cable MSOs. In addition, demand for online gaming and downloading of various multimedia applications have also increased.
In the U.S., leading cable MSO, Comcast Corp. (NASDAQ:CMCSA) is aggressively deploying DOCSIS 3.1 networks. Meanwhile, the DOCSIS 3.1 cable modem market is expected to become increasingly competitive with the presence of large players like ARRIS International plc (NASDAQ:ARRS) and Cisco Systems Inc. (NASDAQ:CSCO) .
Liberty Global currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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