American cable behemoth Comcast Corp.CMCSA commenced the trial of its Gigabit broadband connection though DOCSIS 3.1 network in Philadelphia. Comcast will continue to test the same through 2017 and set a target to launch the service commercially by the end of the year.
In November this year, Liberty Global plc LBTYA had announced its wide-scale deployment of DOCSIS 3.1 network for its customers in Europe, with an eye on expansion of the service in the U.S. at a later date.
What's Special about DOCSIS 3.1?
DOCSIS (Data Over Cable Service Interface Specification) is a communications protocol that allows cable multi service operators (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 currently available DOCSIS 3.0 technology has helped cable TV operators compete in the race for the fastest Internet speeds available in the market.
However, the DOCSIS 3.1 standard is an improved formulation of the existing DOCSIS 3.0. While DOCSIS 3.0 theoretically supports 152 Mbps download and 108 Mbps upload speeds, DOCSIS 3.1 theoretically offers 10 Gbps downstream and up to 1 Gbps upstream network capabilities. Additionally, DOCSIS 3.1 comes with several operational benefits. Moreover, the technology is backward compatible, allowing the present hybrid fiber-coaxial cable lines to allow the stated Internet speeds by simply switching to a DOCSIS 3.1 compatible modem. This backward compatibility is the major advantage of this specification, which allows cable MSOs like Comcast to serve high-speed Gigabit broadband to its customers, without having to incur additional digging or other cable laying costs. This helps in increasing margins.
As the pay-TV business continues to shrink due to increased cord cutting, the cable MSOs are increasingly shifting their focus to broadband Internet. High-speed, stable broadband improves customer retention and increases revenues from business enterprise services. Comcast's Xfinity broadband, being number one in the U.S in terms of speed, is certainly a benchmark exhibiting these characteristics. It is therefore, a no-brainer that Comcast's DOCSIS 3.1 rollout will fuel future growth. However, the company is poised to face challenges from its peers like CenturyLink Inc.; Google Fiber service from Alphabet Inc. GOOGL as well as telecom operators like Verizon Communications Inc. VZ who have begun trial of 5G network.
Comcast currently carries a Zacks Rank #3 (Hold)
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