Comcast Corp., (CMCSA) has launched its first next-generation high-speed voice and Internet service for small and medium sized businesses (SMB) in the twin cities of Minneapolis and St. Paul . Leveraging on the DOCSIS 3.0 platform, this new service will provide downstream speeds of 100 Mbps and upstream speeds of 15 Mbps. DOCSIS 3.0 (also called Wideband network) is a digital channel bonding technique that creates one larger and faster logical pipe to support throughput of at least 100 Mbps.

Cable MSOs are facing fierce competition from telecom service providers. Telecom operators are quickly gaining market share from cable MSOs by offering Mobile TV and other high-speed broadband services to subscribers. Comcast alone lost 214,000 basic video customers in the previous quarter.

The U.S. telecom giants are gradually expanding their fiber-optic networks. Verizon Wireless (VZ) with FiOS network and AT&T (T) with U-Verse network are likely to make the entertainment, information, and communications market highly competitive. Quest Communications (Q) is also planning to start implementing VDSL-2 based high-speed network.

To counter competition, Comcast has decided to target the SMB segment, so far a core market of telecom service providers. Various industry researches estimate that the SMB segment is a $15 billion market opportunity. Despite being a late entrant in this segment, Comcast generated $558 million of revenue in fiscal 2008 from this segment. The company is aiming to more than quadruple that amount by 2012. For the residential customers, Comcast is aggressively deploying DOCSIS 3.0 with a download speed of 50 Mbps and upload speed of 10 Mbps. Management predicted that 80% of its residential networks will be upgraded to DOCSIS 3.0 by the end of 2009 and the rest by mid 2010.

Apart from the threat of telecom operators, intra-industry competition among cable MSOs has also increased. Last April, Cablevision Systems Corp., (CVC) became the first U.S. cable MSO to launch a 100 Mbps broadband service using DOCSIS 3.0. Virgin Media Inc (VMED) is running trials on a 200 Mbps download speed Wideband network based on the EuroDOCSIS standard of 8 MHz channels. Comcast is also planning to launch the 100 Mbps Wideband network for residential customers from mid 2010.

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