Much to its surprise, Mediacom is seeing healthy subscriber uptake of its new 1 Gig service powered by DOCSIS 3.1 over HFC lines even though it does not heavily discount the service nor offer any extra benefits.
Speaking at Light Reading's Cable Next-Gen Technologies & Strategies conference in Denver last month, Mediacom Communications Corp. CTO JR Walden said somewhere between 10% and 20% of new broadband subscribers are signing up for the cableco's new 1 Gig service, which it now offers as the fastest of its five speed tiers following a 16-month rollout throughout its 3-million-home footprint. Calling this early take rate unusually high, he said it compares favorably with the operator's initial penetration rate for the previous DOCSIS specs. The 1 Gig service costs about $140 a month on a standalone basis and about $125 a month when bundled with other cable products like video and voice. (See Mediacom Motors Along and Mediacom Goes Big on DOCSIS 3.1 Upgrade.)
"It's working great," Walden said. "It's also doing really well... far better than we thought it would do." Customers "are buying it at a really significant rate and we're happy to fill that need."
Mediacom, the fifth largest cable operator in the US, has been one of the most aggressive US MSOs in rolling out DOCSIS 3.1, which can enable speeds as high as 10 Gbit/s downstream and 2 Gbit/s upstream. After upgrading its 22-state HFC plant for the new spec, the operator has been busy installing D3.1 cable modems in the homes of its data customers, covering 30% to 45% of its 1.2 million data households so far.
Notably, Walden said, Mediacom's early 1 Gig customers don't appear to be using the faster speeds in any new ways. "They're not doing anything different with it today," he said, comparing them with the bulk of Mediacom customers who subscribe to 200 Mbit/s service. "Is it just a matter of invention? Are we waiting for a 17 year old in Iceland to come up with the next killer app?"
Chris Cholas, service provider solutions architect at Intel Corp. (Nasdaq: INTC), agreed that 1 Gig subscribers are generally not doing anything special with the higher downstream speeds. "They're not using it any differently," he said. "If you dig down... those 1 Gig applications don't exist."
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So then why are Mediacom customers ponying up more cash for the higher speeds each month? In customer surveys conducted by the cableco so far, "the predominant answer to why I bought 1 Gig is I can afford it and I deserve it," Walden said. The big question, he acknowledged, is whether customers will end up feeling "misled if they buy 1 Gig and find out there's nothing more there."
But Walden, Cholas and the other panelists don't seem too worried about that prospect because they already see some potential uses developing for the higher data speeds. For example, several speakers said they see great promise for offering lower latency to broadband subscribers, particularly commercial customers, using high-end applications like virtual reality.
"I think the next big thing may really be latency -- deterministic latency," Walden said. "One of the most practical ways to create low latency -- if you have more bandwidth than customers need, you can create more chances for deterministic latency."
Cholas concurred. "Latency's becoming more important to some of these applications, some of these virtual reality experiences," he said. "Those types of apps will start driving some of these requirements as well."
So did Rob Flask, head of product line management for cable instrument solutions at Viavi Solutions Inc. . Noting that D3.1 enables cable operators to control latency in ways that D3.0 can't, he asserted that "latency issues have become increasingly critical for enterprises."
Incognito Software Inc. CTO Pete Koat agreed as well. While he doesn't necessarily see low latency as a benefit to pitch to consumers, he thinks it could open lucrative new doors for cable operators in the commercial arena. "I don't think we'll get to the point where consumers are talking about latency," he said. "[But] there's a lot of potential for new markets and new revenue around IoT and connected home... voice and video services."
— Alan Breznick, Cable/Video Practice Leader, Light Reading