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How Cable Intends to Keep Up with DBS' HD Plans

14 февраля 2007
One of the big stories to come out of CES last week was that with the expected launch of two new satellites, DIRECTV has plans to offer 100 national and 1,000 local high definition channels by the end of 2007. As company officials dropped this bomb on the Las Vegas crowd, and its aftershocks reached across the pay-TV landscape, many wondered how the cable industry would react and, better still, how would it compete with the expanded offering.

One answer, suggests a new study, is by spending massive amounts of money.

According to research firm ABI, as customers demand more high-definition content from their TV providers, and advanced services like multiplayer gaming continue to gain in popularity, the cable industry will be feeling increased pressure from a "bandwidth crunch." The company's new study says the only way cable operators can expand those types of services is to upgrade the capacity of their digital networks. ABI estimates total revenues stemming from this necessary expansion will exceed $24 billion in 2012 and reach $80 billion in total investments from 2007 until then.

"The looming bandwidth crunch, which is more pronounced in the United States than elsewhere due to its deeper penetration of digital cable, will present different problems to different operators, and each will need to find its own bandwidth upgrade formula," ABI broadband analyst Michael Arden said. "The severity of the crunch will depend on factors such as the speed with which HDTV is adopted in particular markets, and the extent to which cable operators add extra HDTV channels."


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