Where's The Beef? Business Services!

According to speakers at yesterday’s Advanced Services workshop at the SCTE Cable-Tec Expo this week, there’s money to be made in the business market. Voice services, carrier Ethernet and multiple dwelling units (MDUs) are potential revenue sources for cable operators.

Eyeing the voice business market as new money may seem counterintuitive because the number of landline circuits is eroding due to penetration of wireless devices and service and the upward growth of voice over IP (VoIP). However, Douglas Wadkins, CTO at Edgewater Networks, believes there is a lot of life left in business voice. “You are not going to trust your business to Skype. Businesses must have desk phones that are guaranteed to be there,” he said.

He noted that, in the United States, there still are:

•    More than 4.5 million TDM PBX trunks,
•    More than 41.6 million multi-line switched access lines, and
•    More than 3 million single-line switched access lines.

These lines generate $31.7 billion in revenues. As such, cable is well-positioned to capture a share of these revenues by delivering telephone over IP (ToIP) to businesses.

ToIP differs from VoIP in that it is a regulated, paid service that is managed to provide quality of service. In essence, it’s a TDM replacement, explained Wadkins, adding cable operators already provide 91.9 percent of residential ToIP that is delivered over the cable modem.

“If I can deliver almost all of the residential telephony over IP, I should be able to do the same thing for businesses and come after a piece of that $31.7 billion in revenues,” he exclaimed. “Cable operators already have the core in place to deliver these services. They don’t have legacy landline deployed, so it’s a greenfield to deliver to.”

Carrier Ethernet And SLAs

Carrier Ethernet is another business opportunity for cablecos. Sean Yarborough, director of marketing/Product Management at Spirent, noted the wholesale Ethernet market is expected to grow to $3.9 billion by 2015, driven largely by mobile backhaul. However, this service requires high quality levels. “Telco service providers have owned this market in the past and have set the bar high,” he pointed out.

To succeed, cable operators must adhere to robust service level agreements (SLAs). One of the most critical of these is meeting the service activation metric, explained Yarborough. Activation of SLAs can range from fewer than seven days to as many as 45 days. Failure to activate on time can result in financial penalties.

Automating activation is essential if you’re going to be turning up multiple sites in multiple locations, Yarborough stressed, and 24/7 network monitoring is essential to verify SLA performance. And then add trouble management that quickly pinpoints faults to speed repairs.

Count In Those MDUs

Cable operators also are well-positioned to pursue the MDU market, said Mike Emmendorfer, senior director/Solution Architecture and Strategy at ARRIS. DOCSIS-based MDU solutions overcome the distance and scalability limitations of those that require twisted pair for in-building wiring. DOCSIS also can better handle expected growth in network capacity.

“The compound annual growth rate for network capacity is simply staggering,” commented Emmendorfer. “In our forecast, by 2015, we expect to see 200 Mbps downstream and an upstream of nearly 40 Mbps.”

In addition, DOCSIS solutions are more cost-effective for MDUs because they can use existing in-building coax instead of having to spend money on new CAT5 cabling or fiber to the user.

– Jennifer Whalen