GlossaryJune 27, 2022
What is Cable Multiple Systems Operators (MSO)?
A Cable Multiple Systems Operator (MSO) is an operator of multiple cable television systems. The Cable Multiple Systems Operators (MSO) infrastructure serves as one of the main foundations for broadband service offerings in many countries. In the U.S., for example, a cable system is a facility which serves a single community or a specific governmental entity, each having its own franchise agreement with the cable company. The majority of Multiple Systems Operators run cable systems in more than one community. So, any cable company that serves multiple communities is an MSO. Multiple system operators bring cable systems under control of single corporate entity where individual systems may or may not be combined to single networks or combined at regional or metropolitan levels. Due to the physical characteristics of coaxial cable, MSO operators have extended the usefulness of their networks, historically associated with cable TV distribution, to broadband connectivity services.
The Evolution of the Cable Multiple Systems Operators (MSO)
Multiple Systems Operators (MSO) and Cable providers have experienced significant growth in IP traffic. With about 80% of traffic attributed to IP video, MSOs have been impacted by the growth of video streaming services like Netflix, YouTube, Hulu, and many more. Furthermore, the rise of new data-intensive innovations, like virtual reality, augmented reality, and Internet of Things (IoT), is driving the demand for bandwidth and higher speed access as data usage spikes.
Challenges for Cable Multiple Systems Operators (MSO)
After decades of successful growth, cable MSOs now face a crucial challenge – how to continue to grow profitably, and at the same time efficiently compete with other broadband vendors, while demand for broadband surges.
This has created considerable challenges for Cable MSOs, as they continually need to upgrade their networks to ensure sufficient bandwidth and support emerging use cases. Such use cases include 1 Gbps service tiers, 4K video, and VPN as well as audio and video conferencing for enterprises.
While the demand for both upstream and downstream capacity skyrockets, revenue per bit continues to fall. Cable providers can’t reap the ARPU benefits of capacity expansion because the capacity increase in traditional network architecture is both inefficient and expensive. Cable MSOs are focusing on how to aggressively reduce the operational costs for delivering their services while directing efforts to new revenue-generating opportunities.
Meanwhile network complexity has been on the rise with both the growth of hub locations and the separation of consumer and enterprise networks. Leading to poor reliability, this adds to growing capital and operational expenses.
One of the main issues facing these operators is actually the traditional cable infrastructure. This network infrastructure – from access/DOCSIS to the core network- still relies on hardware-based proprietary equipment provided by a handful of vendors at premium costs. This both makes capacity upgrades expensive, and adds complexity to operations.
As the traditional infrastructure lacks scalability, flexibility and still uses inefficient analog technologies, the introduction of new services to market remains difficult and slow. For example, many are ill-equipped for 5G backhaul which holds significant revenue opportunities.
The Future for Cable Multiple Systems Operators (MSO)
The underlying concept for how we watch television is rapidly changing. Consumers favor Subscription Video on Demand (SVoD) content from Netflix-style services on multiple devices – over the traditional viewing of live television content.
MSOs need to evolve their video offerings and delivery capabilities to meet and take advantage of these changes in market trends. This requires being prepared for the new content, new formats, and devices, new IP delivery models, and new consumption models that are coming at an unpredictable and ever-increasing scale.
Jeff Heynen, Vice President, Dell’Oro Group said “The Broadband Access and Home Networking market is changing dramatically as firms rapidly introduce new technologies to enable next-generation services…With markets expected to become more competitive, broadband providers will have to continue spending in order to differentiate their services not only by increasing advertised speeds, but also improving latency and expanding managed Wi-Fi services.”
For most cable MSOs, the paths to future transformation they need to undertake will mean rebuilding the MSO infrastructure. The transformation will either happen through complete overbuilds, or through “cap and grow” deployments. Cable MSOs can significantly simplify their network architecture, efficiently increase capacity, and reduce costs by transforming their network and applying the principles of cloud-native and the disaggregated network model from the access to the core. Open, software-driven networks will be the way to address current cable network challenges.