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DOCSIS 3.1: Flourishing in the Global Cable TV Industry

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The need to remain connected is essentially human. An era of digitization and technology is built on this need. It is here that telecommunications come to the fore as a necessary utility. The rising demand for technologically superior products has been a silver lining for the telecom space in an otherwise tough environment.

With the global cable TV industry (part of the overall telecom industry) continuously evolving, companies in the league are fighting it out to stay ahead in the competition. The latest in the league is the newly launched DOCSIS 3.1 technology.

DOCSIS 3.1 vs. DOCSIS 3.0

DOCSIS (Data Over Cable Service Interface Specification) is a communications protocol that allows cable MSOs to provide high-speed broadband connections. This technology was specifically designed as the cable TV industry’s answer to high-speed wireless and fiber-based wireline networks of telecom operators. The old-generation DOCSIS 3.0 technology has helped cable TV operators compete in the race for the fastest internet speed available in the market.

The next-generation DOCSIS 3.1 standard is an improved formulation of the existing DOCSIS 3.0. Theoretically, while DOCSIS 3.0 supports 152 Mbps download and 108 Mbps upload speeds, DOCSIS 3.1 offers as high as 10 Gbps downstream and up to 1 Gbps upstream network capabilities. Additionally, DOCSIS 3.1 comes with several operational benefits.

The technology is also backward compatible, allowing the present hybrid fiber-coaxial cable lines to allow such high internet speed by simply switching to a DOCSIS 3.1 compatible modem. Although FTTH has the advantage of providing unlimited bandwidth, backward compatibility is a major advantage of DOCSIS 3.1. This allows cable MSOs to provide high-speed Gigabit broadband to customers, without having to incur additional digging or other cable laying costs, unlike FTTH providers. This is sure to boost margins of cable MSOs.

Major Players

In the United States, the largest cable MSO (multi service operator) Comcast Corp. CMCSA is extensively deploying DOCSIS 3.1 network in several markets. The company is offering 1 Gbps downstream and 35 Mbps upstream speeds for its DOCSIS 3.1 network. Mediacom Communications Corp., Cox Communications Inc., WideOpenWest Holdings LLC. WOW and Cable ONE Inc. CABO are other important players in this field.

Leading cable MSO Charter Communications Inc. CHTR is the latest entrant in this market. The company has aimed to provide DOCSIS 3.1 standard across its presence of 50 million homes by the end of this year. Leveraging on DOCSIS 3.1, the company will offer its new Spectrum Internet Gig service (actually 940 Mbit/s downstream) nationwide in late 2018.

Charter Communications has a Zacks Rank #4 (Sell). However, Comcast, WideOpenWest and Cable ONE each carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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