DOCSIS 3.1’s Price Delta

How Much Will the New Modems Cost?
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A big question about DOCSIS 3.1 was answered this week as five vendors became the first to achieve CableLabs certification for the cable industry’s emerging multi-gigabit platform for widely deployed HFC networks.

Another big one still to be answered definitely is how much are these new devices going to cost?

One thing’s for sure – D3.1 devices are going to cost more, based on the mere fact that the initial hybrids are like two modems fused together: one side that can handle DOCSIS 3.0-based traffic, and another end that can support fresh swaths of D3.1-based spectrum.

It’s difficult to do a direct apples-to-apples comparison on D3.0 versus D3.1, since many new classes of gateways  bake in a lot more than the modem – advanced WiFi radios, MoCA technology, etc.

When I broached the D3.1 cost delta question to several vendors last fall, the general expectation was that the new class of modems will cost between 30% to 50% more in the early going, and then decline as volumes increase.

While that sounds like a hefty premium, it’s nowhere near the delta that was initially seen between DOCSIS 2.0 and DOCSIS 3.0 modems. Back then, it was estimated that the first D3.0 models cost 300% to 400% more than D2.0, in large part because of the additional tuners required. A lot of that functionality got baked into the chipsets, volumes exploded, and the costs came down considerably.

But one supplier did offer up a more exact pricing expectation with D3.1, noting that the first wave of DOCSIS 3.1 modems will cost about $25 more than their DOCSIS 3.0-only counterparts – which would put them in the 50% delta range.  Prices, the exec said, will drop from there are MSOs rev up their mass deployment plans.

So, it’s a price difference that MSOs will need incorporate as they seed their networks for D3.1, but the difference is a fraction of what they were dealing with when the DOCSIS 3.0 era was getting underway. 

We'll have more DOCSIS 3.1-related analysis to share in the January 18 issue of Multichannel News

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