Strategy Analytics: Cablevision's First Salvo in Broadband Arms Race - 101 Mbps

Cablevision Systems, which has unveiled its DOCSIS 3.0-based 101 Mbps "Optimum Online Ultra" broadband service, is effectively resetting the speed and pricing bars in the US Broadband market, according to an Insight report published by analyst firm Strategy Analytics, "Too Much of a Good Thing? Cablevision's First Salvo in the US Broadband Arms Race."

In a release, Strategy Analytics noted that the service, set to launch in the New York area on May 11th, will be the fastest consumer broadband available in North America, and will be priced at $99.95/month. Verizon, whose top-tier FiOS service maxes out at 50 Mbps for $139.95/month, downplayed the launch in an interview with Strategy Analytics, saying that the announcement "didn't at all affect" its pricing strategy.

Cablevision's move may mark the beginning of a new era of intense broadband competition, according to Strategy Analytics.

"Yesterday's announcement effectively establishes a new speed/price benchmark in the US Broadband market," said John Lee, Analyst in the Strategy Analytics Digital Consumer Practice. "Competitors will not be able to sit idly by; they must, and will, react."

While 100 Mbps broadband service is more than most consumers could use today, technology will evolve to accommodate the excess bandwidth, according to Strategy Analytics.

"Building a credible usage profile supporting 101 Mbps service to the home is no easy task in today's environment," said Ben Piper, Director of the Strategy Analytics Multiplay Market Dynamics service. "However, future applications such as residential Telepresence-which Cisco is already talking about-as well as 1080p streaming will drive bandwidth use going forward."

Strategy Analytics offers high frequency market intelligence on Automotive Electronics and Entertainment, Broadband Connected Home, Mobile & Wireless Products & Systems, and Virtual Worlds.

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