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SP360: Service Provider

By Roland Klemann, Director of Service Provider Practice, Western Europe, Internet Business Solutions Group

Although the coaxial cable may have been born in 1929, predictions of its death have been greatly exaggerated.

While traditional models for consuming television are indeed under siege—from time-shift TV, over-the-top video, and an ever-expanding array of new devices—cable remains highly relevant, even in an age of exploding data traffic. In fact, with savvy deployment of Wi-Fi services, cable providers can seize an opportunity—not in spite of the mobile data deluge, but because of it.

After all, that sleek new iPad—introduced last week while I was attending the Cable Congress in Brussels—boasts dazzling video resolution. But for network operators, it only adds to a growing problem. They are already reeling under the burden of a massive upsurge in traffic, from tablets and IP-enabled devices of all kinds. What’s worse, they are still at the low end of an ongoing mobile data explosion. Cisco’s Virtual Networking Index predicts an eighteen-fold increase in mobile traffic from 2011 to 2016.

As a result, two things are breaking down: 1) the physical capacity of the networks, and 2) their economics. Theoretically, mobile carriers can build enough macro cells to carry all the traffic in the world, but in reality, that gets prohibitively expensive—fast. No wonder some are feeling an encroaching sense of doom.

Cable has the potential to brighten this picture for providers—but its capabilities will need to expand in three core areas to become fully future-proof:

1.     By continuing its extension from a TV-centered experience into a multi-screen setting, cable must accommodate a rapidly expanding range of IP-enabled devices, from smartphones and tablets to gaming consoles, over-the-top boxes, and Blu-ray players.

2.     As boundaries between “business” and “residential” use get blurred, cable will need to reach deeper into the business space. Trends like BYOD (bring your own device) for enterprises are examples of this.

3.     Cable providers will need to rethink their concept of connectivity, expanding from fixed to mobile and nomadic access.

Cisco IBSG’s Connected Life Market Watch study of more than 3,000 North American and Western European broadband users revealed that 80 percent of mobile video is not really mobile. It is viewed in the home, at the office, or at other indoor, fixed locations that do not require true mobility.

But regardless of where it is consumed, all of that video demands a lot of bandwidth. Cable has it.

It also demands an existing network infrastructure for backhauling. And cable has that.

Plus, cable already “owns” the consumer’s home (in many countries, almost to a ubiquitous extent), and is trusted by consumers.

Building on recent advances in Wi-Fi technology, including Cisco’s Hotspot 2.0, cable can become a major player in mobile and nomadic connectivity. With a seamless handoff between mobile and cable/Wi-Fi, a large portion of the burden on mobile networks can be offloaded using cable’s superior backhauling capabilities. That’s why at the recent Mobile World Congress in Barcelona, Wi-Fi was highlighted as a core element in building heterogeneous networks capable of handling the ever-increasing data deluge.

As a result, some providers, such as Cablevision in America and BT in England, are already deploying expanded Wi-Fi capabilities. In return for their Wi-Fi-enhanced broadband services, they have each experienced a 10-15 percent reduction in subscriber churn.

At Cisco, we believe that there is a huge opportunity brewing for mobile offload; we project that it will translate into a value of much more than 10 billion euro (about US$13.1 billion) in Western Europe alone. Cable is uniquely positioned to capture a significant share of that market.

Not bad for technology based around a 1929 invention. But then, Scotch tape, sunglasses, and the car radio were also invented that year. And they aren’t going away, either.

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