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Analyst Blog

The need to remain connected is essentially human. An era of digitization and technology is built on this need. It is here that telecommunications come to the fore as a necessary utility. The rising demand for technologically superior products has been a silver lining for the telecom space in an otherwise tough environment.

With the global telecom industry continuously evolving, companies in the league are fighting it out to stay ahead in the competition. The latest in the league is the newly launched DOCSIS 3.1 technology.

DOCSIS 3.1 versus DOCSIS 3.0 

DOCSIS (Data Over Cable Service Interface Specification) is a communications protocol that allows cable MSOs to provide high-speed broadband connections. This technology was specifically designed to be the cable TV industry’s answer to high-speed wireless and fiber-based wireline networks of telecom operators. The old-generation DOCSIS 3.0 technology has helped cable TV operators compete in the race for the fastest Internet speed available in the market.

The next-generation DOCSIS 3.1 standard is an improved formulation of the existing DOCSIS 3.0. Theoretically, while DOCSIS 3.0 supports 152 Mbps download and 108 Mbps upload speeds, DOCSIS 3.1 offers as high as 10 Gbps downstream and up to 1 Gbps upstream network capabilities. Additionally, DOCSIS 3.1 comes with several operational benefits.

The technology is also backward compatible, allowing the present hybrid fiber-coaxial cable lines to allow such high Internet speed by simply switching to a DOCSIS 3.1 compatible modem. Although FTTH has the advantage of providing unlimited bandwidth, backward compatibility is a major advantage of DOCSIS 3.1. This allows cable MSOs to provide high-speed Gigabit broadband to customers, without having to incur additional digging or other cable laying costs, unlike FTTH providers. This is sure to boost margins of cable MSOs.

Major Players

In the U.S., the largest cable MSO (multi service operator) Comcast Corp. (CMCSA - Analyst Report) is already deploying DOCSIS 3.1 network in several markets. Leading European cable MSO Liberty Global plc. (LBTYA - Analyst Report) has decided to install DOCSIS 3.1 infrastructure from 2017.

Moreover, several networking equipment companies have unveiled their strategies for helping cable MSOs transition to (DAA) distributed access architectures. DAA is will pave the way for widespread delivery of high-bandwidth services that are increasingly controlled by software.  

A few of these companies are Harmonic Inc. (HLIT - Snapshot Report) , Nokia Corp. (NOK - Analyst Report) and Casa Systems Inc. Harmonic currently carries a Zacks Rank #2 (Buy).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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