NORTH AMERICA COAXIAL CABLE MARKET ANALYSIS

Market Challenges And Opportunities

Market Dynamics- Drivers

Growing popularity of interconnected home devices is expected to drive growth of the North America coaxial cable market during the forecast period. Coaxial home network is a standard to distribute high definition videos and high capacity internet throughout the household. According to the Coherent Market Insights’ analysis, over 90% of households in the U.S., share photos, movies, and access the internet by using a coaxial cable network. This trend is expected to continue during the forecast period, owing to continuous advancement in coaxial cable and related equipment to satisfy the high-speed broadband needs of households. Furthermore, rising popularity of home interconnected devices is expected to boost the demand for coaxial cables. Households in the U.S. are increasingly using Blue-Rays, digital video recorders (DVR), gaming consoles, and high definition TV (HDTV) for accessing digital videos with video on demand (VoD), IPTV and OTT technology over the internet. Advanced technology like MoCA makes it possible to connect these devices to high-speed internet more effectively by using coaxial cable.

High growth of telecom and IT expenditure by SMEs is expected to propel the global coaxial cable market growth over the forecast period. North America has over 20 million small and medium-sized service industry enterprises. These companies spending over telecom and IT services were estimated to be in the range of US$ 60 billion to US$ 70 billion per year. These companies are significantly investing in communication and data distribution technologies to obtain a preferred level of customer satisfaction in a competitive environment. As a result of this, Multiple-System-Operators (MSOs) and IPTV providers in this region are shifting their focus towards this revenue potential market.

Market Opportunities

All three countries i.e. U.S., Canada, and Mexico in North America are investing the noteworthy amounts in rural broadband extension programs. According to planning commission, Canada invested about US$ 225 million in rural broadband and extension plan, for providing high-speed broadband services to rural households. According to this plan, the Government of Canada has provided broadband access to more than 218,000 new broadband connections in the last three years. Currently, over 80% of Canadian households have access to high-speed Internet access.

The new DOCSIS 3.1 specification issued in 2013 is expected to enable cable operators to transfer internet data up to 10 Gbits/s downstream and 1Gibits/s upstream speed. DOCSIS is a standard followed by all cable operators to transfer internet data over cable networks. Products related to DOCSIS 3.1 are expected to come to the market by 2014. This represents a high potential for coaxial cable manufacturers by advancing their products to support such high-speed internet data transfer over cable networks. This new specification is expected to increase the demand for digital coaxial cable to support such high-speed data transmission.

Market Dynamics- Restraint

High cost of raw materials is expected to restrain growth of the North America coaxial cable market during the forecast period. Raw material prices frequently fluctuate, which is a major restraining factor. In the past five years, raw material prices for aluminum, copper, and plastics increased considerably. This has reduced the profits margin for manufacturers. At the end of 2012, copper prices increased by 6% compared to the beginning of the year. Moreover, prices of insulating materials such as polyvinyl chloride (PVC) and fluorinated ethylene-propylene (FEP) have increased in the recent past.

Stiff competition due to emerging substitutes is expected to hamper the North America coaxial cable market growth over the forecast period. There are many substitutes for coaxial cables in the market such as optical fiber networks and wireless technology. These technologies have gained significant popularity among connected mobile devices such as smartphones, tablets, and laptops with internet within homes.