Expect More: Addressing MSO Challenges (Part 1)

In my last blog, I said that multiple system operator (MSO) networks have continued to evolve, and are ripe to provide competitive and compelling services. The robust nature of hybrid fiber coax (HFC) networks, paired with an evolving DOCSIS capability, will provide gigabit downstream services from today forward. That said, some subscribers are in need of symmetrical service, and some are in areas planned for fiber networks.

In my next few blogs, I will lay out strategies for MSOs to use in preparing to evolve their HFC network toward a network that can provide the symmetrical capabilities of fiber in a cost effective way.

First Strategy: Determining When and Where to Transition

FTTH networks undeniably provide great reliability and capability. That said, network installation of any type has an associated cost. Considering the costs relative to the build area, competition and anticipated customer demand can provide some good insight into the best network to deploy.

• A brownfield area with existing HFC services will, by nature, have the highest differential cost associated with network installation, since the HFC network is already in place, and FTTH is fully incremental. In this scenario, it would appear that only the highest levels of customer demand or competitive pressure would drive a move to FTTH.
• Extension areas where there are existing HFC surrounds are a bit more complex. The greenfield nature of an extension would lean toward FTTH, but the cost of extending fiber deep into an existing HFC area may drive the economics more toward HFC. Competitive and demand drivers are more impactful in this scenario. Medium demand or competitive presence may tip the decision toward FTTH.
• In a greenfield area where facilities are open, the costs of FTTH networks have been on par with HFC networks—or maybe even a little under.. This comparison can vary somewhat with density, but in general, first costs in a greenfield area are similar. For this reason, whether demand or competitive presence is high or low, FTTH is often chosen for greenfield builds today.
• One final and special case is apartment buildings (multi-dwelling units) and commercial buildings. These areas are often high on the competitive and demand scale, and offer density that favors FTTH installation.

The graphic shown here depicts how differential cost in each build area may interact with competitive forces or consumer demand to drive a build decision. Bear in mind, the cost curve is far from static, and solutions exist that may drive the curve much lower, moving the decision point along with it. Bottom line, if you weigh build area and differential costs against demand and competitive presence, the where and when to transition will become clear.

In my next blog, I’ll discuss the second strategy to evolving HFC networks when specifically building multi-dwelling units, or MDUs. In the meantime, tell me what you think about brownfields and greenfields – what makes sense to you?