Alternative services worth 'billions' to cable firms

Cable operators stand to rake in "billions" by expanding beyond their traditional core offering of residential video services, experts predict.

Services that offer the greatest promise, according to ABI Research, include voice telephony, broadband data services, provision of mobile telephony backhaul capacity and advertising.

"ABI Research expects that in 2007, residential video will account for about US$170bn in revenue worldwide. Voice, data, SMB/cellular backhaul, and advertising add a further US$92bn,” said ABI vice president and research director Stan Schatt.

"In 2012, the end of our current forecast period, those figures will be about US$268bn and US$279bn respectively, showing the increasing importance of these alternative services. Advertising revenues alone will grow from US$40bn this year to US$194bn in 2012."

This shift in emphasis is taking place for different reasons in different regions, according to the analyst firm.

The motivation in North America stems from video market saturation where subscriber numbers will show only small growth, or perhaps even losses to telco and satellite competition. Alternative revenue streams are therefore seen as essential.

In Asia, there is still room for growth in the subscriber base, but operators are starting to realise the importance of advertising and other alternative services, and their revenue potential.

These trends also affect, and are affected by, technologies. Cable operators in North America and some other markets are starting to equip core networks with Ethernet to support business services more easily.

"The rise of advertising as a revenue alternative will produce a profound change in how things are advertised," added Schatt.

"This will have an impact on technologies as well as revenues, and even in the way that advertising agencies construct ad campaigns which will feature more interactivity."

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