StarHub aligns with Vyyo on bandwidth expansion effort
StarHub's decision to introduce 3 GHz technology stems from both internal and external forces.
On the external, the Singapore government is seeking proposals for a "Next Generation National Broadband Network" (Next Gen NBN), with an overarching goal that the "open access architecture" will be capable of speeds of 1 Gbps or more, and to provide "affordable broadband" for 95 percent of all homes and businesses by 2012.
StarHub, which will compete for the subsidized contract, is throwing its hat in the ring led by a bandwidth expansion strategy based on Vyyo's 3 GHz platform.
In March, Singapore's Infocomm Development Authority announced it had "pre-qualified" 12 bidders for the Next Gen NBN. Those bidders (see list, further below) will be participating in a "competitive dialogue" from April to July 2007. A final decision is expected by year-end.
Internally, StarHub also has put plans in place to start deploying Vyyo's 3 GHz technology in greenfield sites in anticipation of service deployments that can leverage the wider range of spectrum.
Thomas Ee, StarHub's SVP for cable, fixed and IP services, said the Vyyo approach helps out StarHub in three key categories: performance, cost and time-to-market.
On the last point, StarHub believes it will be able to hit the mark because it will be able to use its existing plant rather than build a network from scratch. A fiber-fed PON network, Ee explained, will take longer to build and still deliver services in a shared environment.
As for performance, StarHub is looking to build services that can produce speeds up to 1 Gbps using DOCSIS 3.0 channel bonding techniques. But the operator will need swaths of spectrum to achieve such speeds, and believes a move to 3 GHz will provide more than enough upstream and downstream capacity with which to play.
Vyyo officials say it will cost StarHub about $60 to $80 per home passed to upgrade its entire network to 3 GHz. That figure does not factor in labor costs or the cost of Vyyo's XTB, a home-side device that downconverts video signals to a legacy band that the consumer's set-top can interpret. Vyyo would not disclose pricing on the XTB, but, according to Vyyo VP of Business Development Jeff Fryling, the device costs less than a set-top, and only one XTB is needed per household.
Vyyo did not say how much revenue it could generate from the StarHub deal, but an analyst suggested that it could fetch the vendor as much as $40 million during the first phase of the project.
Anton Wahlman, an analyst with ThinkEquity Partners, came to that figure on the belief that the initial stage of the 3 GHz project could include 500,000 homes passed, with installations starting by Q1 2008.
StarHub's decision to expand bandwidth into such lofty heights is an unusual one, given the track record of most cable operators. Other MSOs are attacking the bandwidth issue with a variety of other methods, including node splits, an expansion to 1 GHz and deployment of switched digital broadcast. Operators also hope to get some efficiency gain with advanced codecs such as MPEG-4.
Some are also seeking upstream relief by shifting the available spectrum from 42 MHz to 85 MHz, though ingress issues could limit the amount of available (and usable) spectrum for upstream use. Vyyo claims its system can produce an additional 135 MHz of upstream bandwidth.
Ee lamented that operators have not given enough attention to the upstream, noting that upstream and downstream usage trends cannot be seen as "isolated events."
StarHub, in fact, is the first cable operator to publicly acknowledge deployment of Vyyo's 3 GHz spectrum overlay technology for residential services. Cox Communications has approved the use of Vyyo's gear for commercial services. Cox has also introduced 3 GHz passives in sections of plant in New Orleans that had to be replaced from the damage caused by Hurricane Katrina.
StarHub is no stranger to the bleeding edge of cable technology. In 2005, it kicked off pre-DOCSIS 3.0 work with Motorola Inc. and launched a 100 Mbps (downstream) cable modem service across the board in December 2006.
The business case for pre-3.0 is "better than expected," Ee said of the returns since the full launch of the service.
Ee said StarHub's decision to implement pre-3.0 technologies and a 3 GHz strategy has less to do with competition (competing telcos such as SingTel in Singapore have not turned up ADSL2+ yet) and more with acknowledging existing consumer trends and staying ahead of the bandwidth curve, rather than reacting to it."It's about looking at what's beyond the horizon and how we will be future-proofed and future-ready," Ee said.
Today, most of StarHub's plant is built out to 860 MHz, with some small 750 MHz pockets.
StarHub's HFC plant presently passes about 1 million homes, and leverages 8 MHz channels for video services, and 6 MHz channels for DOCSIS offerings.
Ee said StarHub's current bandwidth is at a "comfortable stage today...we don't have to upgrade."
Still, Ee explained, the MSO wants to be sure its spectrum house is completely in order by the time DOCSIS 3.0 is ready for prime time.
"We are leaving no stone unturned. We just don't want to be caught by surprise," Ee said.
2. Siemens Networks
Consortiums (bidder and consortium members)
1. Alcatel Singapore Pte Ltd. (Babcock & Brown Australia Pty Ltd., Emtelle UK Ltd., SingTel)
2. Axia NetMedia Corp. (Cisco Systems)
3. BT Singapore (Babcock, Cisco, Citigroup, Datacraft Pte Ltd., Ericsson, Frontline Technologies, Alcatel, SMRT Engineering, ST Electronics, Tech Mahindra Ltd.)
4. Digital Distribution Australia Pty Ltd. (STEE-Infocomm)
5. FiberXpress Consortium (Singapore Computer Systems, 1-Net Singapore Pte Ltd., Ericsson, SMRTE, Zitius Service Delivery AB)
6. Hong Kong Broadband Networks Ltd. (MobileOne Ltd.)
7. SingTel (Babcock, Cisco, Macquarie Bank Limited)
8. T-Systems Singapore Pte Ltd. (BlueTel Networks, Citigroup, ChungHwa Telecom, UOB Asia Ltd.)