Getting into the broadband game will be more expensive for telcos than their
rival cable providers in the coming years, according to a report released by The
Insight Research Corp.
The Parsippany, N.J.-based analyst firm estimated that North American telcos
will spend $4.8 billion between 2001 and 2007 to upgrade their networks for
digital-subscriber-line and broadband-access service.
Most of that financial burden is in buying the necessary DSL-access
multiplexers (DSLAMs) needed to control the modems.
In contrast, the report found that MSOs will spend only $661 million in that
Most of the largest U.S. cablers are nearing the end of their network-upgrade
work, but the study noted that cable networks do not require as many expensive
hardware additions as the telco plant.
'By 2003, we see the number of DSL connections beginning to gain significant
ground on the number of cable-modem connections in North America,' Insight
president Robert Rosenberg said in a release.
'The rub is that the telcos will spend eight times more on their networks
than the cable companies, so profitability within the two industries will be
vastly different,' he added.