Cable Ready To Capitalize On IP Telephony
New Kinetic Study Forecasts North American Cable Operators Will Add More than 15 Million IP Phone Subscribers Over the Next Five Years PHOENIX, AZ - Over the next five years North American cable operators are poised to capture more than $15 billion in telephone service revenue from incumbent telephone companies, according to a new research report from Kinetic Strategies Inc. In its Cable IP Communications Infrastructure and Services Forecast for the North American Market 2005-2009, Kinetic projects that cable operators in the U.S. and Canada will add more than 15 million local telephone customers using Internet Protocol (IP) technology through 2009, creating an infrastructure equipment opportunity valued at more than $3 billion for industry suppliers. The cable industry's IP phone offering differs significantly from the voice over IP (VoIP) services now offered by flashy start-ups like Vonage Holding Corp. and Packet8, as well as established players like AT&T and Verizon. These services, which are based on Session Initiation Protocol (SIP) technology, are able to work over any broadband connection, offering subscribers the benefits of service portability and flexibility. However, in practice, the quality and reliability of these "best-effort" VoIP services are often flimsy because they operate separately from the underlying transport network. Cable operators, by comparison, are now offering IP telephone services using PacketCable technology, a solution designed from the ground up to meet or exceed the quality of the public switched telephone network (PSTN) using Data Over Cable Service Interface Specification (DOCSIS) 1.1 or 2.0 cable modem networks. With PacketCable, cable operators are able to deliver the call quality and reliability consumers expect at a lower price point than incumbents, while introducing innovative IP calling features such as Web-based voicemail, find-me call forwarding and personal conferencing. "After years of false starts, North American cable operators are finally poised to capture a meaningful share of the local and long distance telephone services market by leveraging IP technology," said Michael W. Harris, president and principal analyst, Kinetic Strategies. "Cable operators already serve more than 2.5 million local telephone customers in North America using legacy circuit-switched technology. The industry's move to IP will reduce deployment costs while spurring application innovation." The North American cable industry's push into IP telephony comes as growth in its high-speed data business is slowing. Intensifying competition from DSL providers and consumer market saturation for broadband Internet access at premium price points are causing a deceleration in cable modem subscriber additions. Rather than take a hit in operating cash flow by dropping their monthly broadband service prices to spur subscriber growth, cable operators appear content to accept this trend and turn their attention toward IP telephony. As a result, in the cable IP communications segment, growth in both new subscribers and revenue will increasingly be driven by telephone services. Indeed, over the next five years, Kinetic forecasts North American cable operators will add more IP telephone than high-speed data customers. Based in Phoenix, Ariz., Kinetic Strategies has served as a leading provider of broadband research and market analysis since 1996. The Cable IP Communications Infrastructure and Services Forecast for the North American Market 2005-2009 report offers a concise and timely analysis of the North American high-speed data and IP telephony market. This informative report includes an assessment of cable operator IP telephone service deployment strategies, highlighting the role of PacketCable NCS, SIP and PacketCable Multimedia solutions. Additional information is available online at www.kineticstrategies.com/ipcom/.
FOR MORE INFORMATION CONTACT:
Kinetic Strategies, Inc.
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