DOCSIS3.1: THE PRACTICAL REALITIES OF IMPLEMENTATION

Transcription

1 RESEARCH STRATEGY REPORT DOCSIS3.1: THE PRACTICAL REALITIES OF IMPLEMENTATION STEPHEN WILSON analysysmason.com

2 About this report This report analyses the practical realities of DOCSIS3.1 and what will be required to implement the technology. The report provides recommendations for cable operators on what they will need to do to roll out DOCSIS3.1 and what the best possible roll-out strategy might be. It also provides recommendations for telcos that are seeking to compete with DOCSIS3.1 roll-outs. It is based on several sources, including: Analysys Mason s internal research, for example, fixed network data traffic forecasts 1 interviews with stakeholders in the DOCSIS3.1 cable market, particularly DOCSIS component and system-level vendors, and operators. KEY QUESTIONS ANSWERED IN THIS REPORT How can cable operators implement DOCSIS3.1, for example, using existing or extended frequencies? What download and upload speeds will be possible with DOCSIS3.1 initially and how will these speeds change over time? What costs will cable operators incur when deploying DOCSIS3.1 for example, in terms of cable modems and CMTS devices? When will cable operators worldwide deploy DOCSIS3.1? How will DOCSIS3.1 deployments compare with network upgrades by telco competitors in terms of the speeds offered, the costs involved in and the time to market? WHO NEEDS TO READ THIS REPORT Executives in telcos faced with cable competition. Management executives in cable operators who want to compare their future DOCSIS3.1 roll-outs with those of their industry peers. Marketing executives in DSL and FTTH equipment vendors who want to understand the potential impact and strengths and weaknesses of DOCSIS3.1. Regulators and policymakers who want to understand the impact of DOCSIS3.1 roll-outs on the competitive landscape and on meeting government broadband roll-out targets. 1 For more information, see Analysys Mason s Fixed network data traffic worldwide: forecasts and analysis Available at 2

3 CONTENTS EXECUTIVE SUMMARY POTENTIAL DEPLOYMENT SCENARIOS MAXIMUM SPEED AND CAPACITY BENEFITS IMPLEMENTATION COSTS AND TIMELINES ABOUT THE AUTHOR AND ANALYSYS MASON 3

4 Executive summary DOCSIS3.1 access is nearly 2 years away for end users, but cable operators should begin preparing to deploy it. In all deployment scenarios, the capacity and maximum speed benefits are significant. Cable operators need more capacity in their networks to cope with the growing volume of downstream and upstream traffic. In addition, the threat of infrastructure competition from FTTH players will force them to increase maximum upload and download speed service tiers. DOCSIS3.1 uses several innovations to enable cable operators to boost overall capacity and maximum speeds. The technology can be implemented in various ways and operators need to assess the advantages and disadvantages of each strategy. Moving to 204MHz on the upstream, probably in conjunction with upgrading to 1.2GHz on the downstream, will provide a significant capacity boost, but operators should consider moving to the 85MHz mid-split upstream architecture. This will increase capacity, but creates fewer logistical challenges and is a lowercost option. Many cable operators have expressed interest in deploying DOCSIS3.1, but the roll-out process will take time. DOCSIS3.1 rollouts will be a gradual evolution and, therefore, will not have an immediate impact on telco strategy. Figure 1: Key technological features of DOCSIS3.1 Downstream: maximum 10Gbps Upstream: maximum 1Gbps Downstream: at least 1024 QAM Upstream: at least 256 QAM DOCSIS3.1 should enable at least a 2-order improvement in QAM over DOCSIS3.0 Downstream: FDD frequencies cannot be shared by DOCSIS3.1 and DOCSIS3.0 Upstream: TDD the same frequency can be used for DOCSIS3.1 and DOCSIS3.0 Downstream: up to 1200MHz must be supported by equipment Upstream: up to 204MHz must be supported by equipment Extended frequencies could also be supported Source: Analysys Mason 4

5 Usage (GB per connection per month) DOCSIS3.1: the practical realities of implementation The increasing volume of data traffic and the availability of higher speeds from competitors are driving cable operators to upgrade networks DOCSIS3.1 can increase capacity and act as an insurance against growing traffic levels. Cable operators have had a significant download speed advantage for several years, but telco network upgrades and the entry of new fibre players will force them to boost average and maximum customers speed. Figure 2: Average downstream and upstream Internet usage per connection, worldwide, Analysys Mason forecasts that the average volume of downstream and upstream traffic per connection (usage) will grow by 326% and 296% respectively between 2014 and 2020, which could strain DOCSIS data channels. This is an incentive to boost capacity, which cable operators can do by increasing the number of DOCSIS3.0 data channels or upgrading to FTTH, but DOCSIS3.1 upgrades have generated significant interest The phenomenon of gigabit access and gigabit communities has also become prevalent. This is particularly true in the USA, where telcos notably AT&T have copied Google Fiber s gigabit speeds. In these cases, DOCSIS3.1 roll-outs will follow competitor upgrades. Where telcos are rolling out upgraded DSL, DOCSIS3.1 roll-outs will precede further telco deployments as these operators seek to amortise their earlier investment. Offering higher upload speeds with DOCSIS 3.1 could enable cable operators to compete more effectively in the business market. Upgrade costs for DOCSIS3.1 modems and headend equipment are also limited, encouraging operators to take advantage of DOCSIS Downstream Upstream Source: Analysys Mason 5

6 DOCSIS3.1 upgrade strategies differ in terms of the capacity boost and maximum speed provided as well as cost and time to market DOCSIS3.1 is a potential solution to growing traffic levels and increased competition because it can boost capacity and maximum service tier speeds. Cable operators must decide whether, and when, to invest in DOCSIS3.1. They need to assess the various options for example, whether to use existing or extended frequencies on the upstream and/or downstream. The choices that operators make when considering how to deploy DOCSIS3.1 will have an impact on speed, capacity, time to market and costs. Cable players must examine the capacity and maximum speed advantages of each of the deployment scenarios. Moving to extended frequencies will provide the biggest capacity and maximum speed boost, but this strategy also requires changes to the plant, increasing time to market. In order to make roll-out decisions, operators must also consider the costs of each deployment scenario. Whether they use existing or extended frequencies, operators will need to upgrade CMTS/CCAP hardware and DOCSIS3.1 modems. In the case of using extended frequencies, operators will need to replace actives in the outside plant and potentially some passive components. This significantly increases the costs of DOCSIS3.1 roll-out. Figure 3: Assessment of cable network upgrade strategies Strategy Continuing to use DOCSIS3.0 Using existing frequencies for DOCSIS3.1 Using 85MHz on upstream for DOCSIS3.1 Using 204MHz on upstream and 1GHz or 1.2GHz on downstream for DOCSIS3.1 Using 1GHz or 1.2GHz on downstream, leaving the upstream unchanged and implementing DOCSIS3.1 Beyond 1.2GHz on the downstream and beyond 204MHz on the upstream for DOCSIS3.1 Speed and capacity Time to market Cost Lowest Immediate Lowest Likely to be low Low Low Medium Medium Medium High High High Medium Medium for 1GHz High for 1.2GHz Medium for 1GHz High for 1.2GHz Highest Highest Highest 6

7 Recommendations 1 Cable operators in developed markets should invest early in DOCSIS3.1 modems and headend devices. It makes sense to deploy DOCSIS3.1 modems and headend devices and initially run them in DOCSIS3.0 mode. The additional cost of such devices compared with DOCSIS3.0-only devices is limited. Seeding the market with DOCSIS3.1 modems will enable significant utilisation of the new downstream frequencies as soon as they are allocated to DOCSIS3.1. The cost of upgrading to DOCSIS3.1 will be significant in emerging markets, so bonding more DOCSIS3.0 channels will be a sensible strategy in the short term. 2 Cable operators should consider initially moving to 85MHz on the upstream and 1GHz on the downstream. Moving to 204MHz and 1.2GHz presents significant challenges, particularly in North America, because of potential interference from MoCA, the need to replace outdoor and indoor passives and the question of how to deal with legacy FM radio services. The growth in upstream traffic may not justify an initial move to 204MHz. However, operators can profitably plan for the future by installing 1.2GHz/204MHz amplifiers as they become available and new outdoor passives, which would ease the way for a later migration to 1.2GHz/204MHz. 3 Telcos must remember that DOCSIS3.1 is an evolution and not a revolution, and deployments should not dramatically change telco roll-out strategies. Even launching DOCSIS3.1 using existing frequencies may first require seeding the market with modems to ensure that new DOCSIS3.1 frequencies have higher utilisation levels. Rolling out DOCSIS3.1 with extended frequencies may require significant changes to the cable plant. Shared speeds of 10Gbps downstream and 1Gbps upstream are possible, but in reality will take many years and significant investment to achieve. 7

8 CONTENTS EXECUTIVE SUMMARY POTENTIAL DEPLOYMENT SCENARIOS MAXIMUM SPEED AND CAPACITY BENEFITS IMPLEMENTATION COSTS AND TIMELINES ABOUT THE AUTHOR AND ANALYSYS MASON 25

9 About the author Stephen Wilson (Senior Analyst) contributes research to our Fixed Networks research programme. He joined Analysys Mason as a Senior Analyst in November 2012, having previously worked for Informa Telecoms & Media. Stephen has more than 5 years of experience covering the telecoms industry and specialises in analysing fixed broadband access technologies and strategies, as well as developments in European telecoms markets across fixed and mobile sectors. He has produced reports on DSL acceleration technologies as well as regular updates on European markets, notably in Central and Eastern Europe. Stephen is a graduate in Politics, Philosophy and Economics from St Catherine's College, Oxford University. 26

10 About Analysys Mason Knowing what s going on is one thing. Understanding how to take advantage of events is quite another. Our ability to understand the complex workings of telecoms, media and technology (TMT) industries and draw practical conclusions, based on the specialist knowledge of our people, is what sets Analysys Mason apart. We deliver our key services via two channels: consulting and research. Research We analyse, track and forecast the different services accessed by consumers and enterprises, as well as the software, infrastructure and technology delivering those services. Research clients benefit from regular and timely intelligence in addition to direct access to our team of expert analysts. Our dedicated Custom Research team undertakes specialised and bespoke projects for clients. For more information, please visit Enterprise and M2M Regional markets Network technologies Telecoms software Consumer services Strategy and planning Regulation and policy Performance improvement Transaction support Consulting Our focus is exclusively on TMT. We support multi-billion dollar investments, advise clients on regulatory matters, provide spectrum valuation and auction support, and advise on operational performance, business planning and strategy. We have developed rigorous methodologies that deliver tangible results for clients around the world. For more information, please visit 27

11 Research from Analysys Mason We provide dedicated coverage of developments in the telecoms, media and technology (TMT) sectors, through a range of research programmes that focus on different services and regions of the world. PRACTICES PROGRAMMES REGIONAL MARKETS Global Telecoms Forecasts European Country Reports European Core Forecasts European Telecoms Market Matrix The Middle East and Africa Asia Pacific DIGITAL ECONOMY Digital Economy Strategies Digital Economy Platforms IoT and M2M Solutions CONSUMER AND SME SERVICES Mobile Services Mobile Devices Fixed Broadband and Multi-Play Future Comms and Media SME Strategies Service Assurance Customer Experience Management Customer Care Revenue Management Analytics TELECOMS SOFTWARE Network Orchestration Software-Controlled Networking Service Delivery Platforms Service Fulfilment Telecoms Software Market Shares Telecoms Software Forecasts NETWORK TECHNOLOGIES Fixed Networks Wireless Networks Spectrum Alongside our standardised suite of research programmes, our Custom Research team undertakes specialised, bespoke research projects for clients. The dedicated team offers tailored investigations and answers complex questions on markets, competitors and services with customised industry intelligence and insights. To find out more, please visit 28

12 Consulting from Analysys Mason For 30 years, our consultants have been bringing the benefits of applied intelligence to enable clients around the world to make the most of their opportunities. Our clients in the telecoms, media and technology (TMT) sectors operate in dynamic markets where change is constant. We help shape their understanding of the future so they can thrive in these demanding conditions. To do that, we have developed rigorous methodologies that deliver real results for clients around the world. Our focus is exclusively on TMT. We advise clients on regulatory matters, help shape spectrum policy and develop spectrum strategy, support multi-billion dollar investments, advise on operational performance and develop new business strategies. Such projects result in a depth of knowledge and a range of expertise that sets us apart. We help clients solve their most pressing problems, enabling them to go farther, faster and achieve their commercial objectives. To find out more, please visit AREA R EGULATION SPECTRUM P O L I C Y A N D A UCTION SUPPORT T R A N SACTION SUPPORT P ERFORMANC E I MPROVEME N T STRATEGY A N D P L A N N I N G EXPERTISE Policy development and response Expert legal support Regulatory economic costing Radio spectrum auction support Commercial due diligence Performance analysis Commercial excellence Market research Market sizing and forecasting Margin squeeze tests Media regulation Regulatory due diligence Market analysis Benchmarking and best practice Analysing regulatory accounts Postal sector costing, pricing and regulation Net cost of universal service Radio spectrum management Technical due diligence Technology optimisation Transformation services Business strategy and planning National and regional broadband strategy and implementation 29

13 Published by Analysys Mason Limited Bush House North West Wing Aldwych London WC2B 4PJ UK Tel: +44 (0) Fax: +44 (0) Registered in England No All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher. Figures and projections contained in this report are based on publicly available information only and are produced by the Research Division of Analysys Mason Limited independently of any client-specific work within Analysys Mason Limited. The opinions expressed are those of the stated authors only. Analysys Mason Limited recognises that many terms appearing in this report are proprietary; all such trademarks are acknowledged and every effort has been made to indicate them by the normal UK publishing practice of capitalisation. However, the presence of a term, in whatever form, does not affect its legal status as a trademark. Analysys Mason Limited maintains that all reasonable care and skill have been used in the compilation of this publication. However, Analysys Mason Limited shall not be under any liability for loss or damage (including consequential loss) whatsoever or howsoever arising as a result of the use of this publication by the customer, his servants, agents or any third party.