In the shadow of the pandemic and with surging demand for broadband, cloud and OTT services, cable providers are facing a hurricane while armed with only a flimsy umbrella.
First, there is the continuing decline of traditional revenue streams as users cut the cord on their channel-surfing video-only subscriptions in favor of on-demand, broadband-based OTT services. How bad is it? Leichtman Research Group recently found that, overall, the top cable providers lost 3.3% of video subscribers in 2019 compared to a loss of 1.9% in 2018.
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The Future of IP Networking – Time for Radical Change
Of course, at the same time, these same providers are gaining broadband subscribers and developing new successful services like towards SMBs (security, cloud or wireless), or consumers (wireless). Yet this creates serious challenges that their networks need to support.
Current Cable Network Challenges
First, while the demand for upstream and downstream capacity is exploding, revenue per bit is in a downward spiral. Cable providers are unable to reap the ARPU benefits of capacity expansion because the capacity increase in traditional network architecture is inefficient and expensive.
Second, network complexity is naturally increasing with the number of hub locations or the separation of consumer and enterprise networks that many cable operators have developed over the years. This leads to poor reliability, while incurring growing capital and operational expenses.
Third, the introduction of new services is difficult as traditional infrastructure lacks scalability, flexibility and still uses inefficient analog technologies. Current outside plants are ill-equipped for 5G backhaul which holds significant opportunities for the future.
The core issue facing cable operators is the traditional cable infrastructure. The network infrastructure – from access/DOCSIS to the core network- still relies on hardware-based proprietary equipment provided by a handful of vendors at premium cost. This makes capacity upgrades expensive, while adding complexity to their operations and slowing time-to-market for new features and services.
How can Cable Operators transform their networks and overcome these challenges? What are the short-term vs. longer-term solutions?
Time to Rethink Cable Networks
Some cable operators have started their journey to transform their network infrastructures.
On the access network, the use of fiber technologies placed closer to end-users associated with digital optics (“deep fiber”), node split and mid-split design– extending the upper limit of return band of 5-42 MHz to 85MHz and increase upstream bandwidth – provides the ability to increase the total capacity and capacity per subscriber. CableLabs’ Distributed Access Architecture (DAA) enables the disaggregation of traditional CCAP functions from the headend to the optical node (MAC or MACPHY), reducing headend space and power.
By using a software-driven approach and virtualization technologies applied to CCAP platforms, leading operators have applied an approach that uses standard hardware. This can optimize infrastructure resources to their needs, increase scalability, agility and speed up upgrades while reducing capital and operational expenses. And with the extended use of fiber it is now possible to consolidate different headend and hub locations to simplify network architectures and save on operational costs even more.
“Global cable operators are investing heavily in distributed access architectures to make their networks more efficient, offer premium bandwidth, and stay ahead of fiber-based competitors. Today’s investments in DAAs will prepare cable operators for a future of 10 Gbps services using a combination of extended spectrum DOCSIS, full duplex DOCSIS 3.1 and, ultimately, fiber to the home.”
The aggregation network needs to adapt to the changes at the access. A Converged Interconnect Network (CIN) now can simplify the aggregation of nodes by using IP routers. Cable operators are intending to use the principles of open, software-driven networking running on standard white boxes to support the high-scale traffic to the edge and core networks. High-scale disaggregated routers, like the cloud-native solution from Drivenets, are well positioned to deliver these benefits, including at the edge and core of their networks.
Cable operators can significantly simplify their network architecture, efficiently increase capacity, and reduce costs by transforming their network and applying these principles from the access to the core. Open, software-driven networks are the way to go to address current cable network challenges.
Transforming the Cable Industry
The cable industry is moving away from its origins in pay-TV offerings and now transforming into a broadband-connectivity industry. Like telcos, cable operators have to reinvent themselves to seize on the new opportunities in business connectivity and beyond. More importantly they need to rethink the underlying building blocks of their network architecture. This means turning their attention to focus on raising network profitability, agility and value-added services. This can only be achieved with a paradigm shift. In today’s volatile consumer environment cable companies that don’t adapt, will simply be left behind.