Cable MSOs Ready To Compete With Ma Bell, Says ABI

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OYSTER BAY, N.Y. - - July 1, 2003 - - Cable MSOs, in efforts to remain competitive, have begun to offer a "triple play" of communications services: video, voice, and high -speed data. Having acquired 69.4 million homes receiving cable television services, and 11.3 million subscribers to high -speed Internet access via a cable modem, the cable MSOs are staking out telephony users as their next untapped market. Of course, this has traditionally been the bounty of the Baby Bells and long -distance companies, but given advancing and convergent technologies, the cable MSOs have been able to steadily offer these services to their growing customer bases, mostly through regional roll -outs and stealth marketing.

The marketing war with Ma Bell will continue for years to come, as the market for cable telephony services will reach 14.7 million users by 2008, projects research firm ABI.

"Cable MSOs stand to reap a huge windfall from voice services," stresses Edward A. Rerisi, ABI's Director of Research. "Voice services presents itself as a relatively untapped area for cable MSOs, and the Baby Bells in recent years have lost the reliability and pricing advantages of DSL and other service offerings." Currently, the leader in cable telephony is Comcast, having acquired 1.4 million subscribers in 8.7 million homes.

The two voice services technologies include circuit switched cable telephony and IP cable telephony. IP cable telephony has proven itself to be much less expensive to deploy, but it is the circuit switched technology that will be the breadwinner for MSOs in the near -term.

Other than voice services, cable MSOs have simultaneously become more aggressive in offering premium video and entertainment services, including digital cable, video on demand (VOD), digital video recorders (DVRs), and high -definition television (HDTV) capabilities. Such premium video services are expected to help MSOs increase their revenue and hold their competitive advantage over DBS. Cable MSOs have hooked up with other powerful forces, namely the broadcasters and networks, the consumer electronics (CE) industry, and the Federal Communications Commission, to push for digital television and high definition programming -spurring other industry participants to roll out devices and platforms which meet consumers' needs for HDTVs, DVD players, VCRs, cable/satellite boxes, DVD recorders, personal video recorders (PVRs) such as TiVo, and game consoles, or other all -in -one set -top boxes (STBs).

The report, "US Cable Operator Services and Strategies: An Examination of CATV Advanced Digital Services and the DBS/DSL Competitive Landscape," covers the current and future market trends for a package of communications services. ABI's research tracks subscribers and service portfolios for this triple play of video, voice and data for the US MSOs. Forecasts for subscriber growth, new markets, and emerging technologies, are also provided.

ABI's study, "Residential Entertainment Technologies: Device Forecast, Convergence and Networking," covers the mushrooming market for residential digital boxes and related technologies. The report presents quantitative forecasts by region for each device, including unit shipments from 2001 to 2008, ASP and revenue, in addition to device forecasts are included for DVD players, DVD recorders, LCD TV (>30" and <30"), RPTVs, plasma TVs, front projection TVs, PVRs, STBs, smart display, Home Theater -in -a -Box, digital receivers/internet radio, compact audio, game consoles, and PCs as home entertainment centers.

ABI is an Oyster Bay, N.Y. -based technology market research firm founded in 1990. ABI publishes research and technology intelligence on the wireless, automotive, electronics, networking and energy industries. Details can be found on the web at or by calling 516 -624 -3113.

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