In its recently released “Broadband Cable Financial Databook,” SNL Kagan predicted that revenue for cable multiple service operators (MSOs) will grow by $81 billion in 2008 and will likely reach $120 billion by 2018.  Subscriber bases will remain constant as a result of the competitive advantages that cable MSOs enjoy.

 

In the current competitive environment, cable operators need to position themselves well, in order to make the best of this huge demand for advanced services, SNL Kagan said. Forty-eight million subscribers are expected to sign up for such services in the next decade. Though revenue is expected to increase, growth is expected to be moderate, due to intensifying competition from telcos offering video services, and from providers of direct broadcast satellite (DBS) services.

 

At the end of second quarter 2008, there were 64.6 million basic video subscribers served by cable MSOs, 31.0 million DBS subscribers and 2.1 million telco video subscribers. This figure is expected to become 64.3 million, 33.4 million and 11.3 million in each category respectively five years from now.

 

Growing services, broader coverage and technology advancements will keep this sector the largest provider of consumer entertainment and communications in the 10-year outlook, SNL Kagan said.

 

“Cable MSOs will reap basic sub gains from broadcasters' digital transition in February 2009, and execute their own digital transition to reclaim video bandwidth and expand their capacity to offer higher-margin services, faster Internet speeds and more interactive services, thus sustaining growing ARPUs,” said Robin Flynn, senior analyst at SNL Kagan.

 

While Cable RGUs will stand at 164.4 million, cable VoIP homes is expected to be 115.6 million, and cable VoIP subscribers could reach 18.1 million by year-end 2008. Also, the high-speed data market could grow 58.3 percent and digital cable subscribers could reach 42 million.

 

While total residential revenue is expected to grow by 7.9 percent, to $81.3 billion (at an average ARPU of $104.79, versus $95.84 during 2007), commercial revenue could go from $3.9 billion in 2007 to $4.9 billion in 2008.

 

SNL Kagan is a financial intelligence wing of SNL Financial (News - Alert) LC. It concentrates on the media and communications sector.