Calix CEO: Speed not enough to stand out in broadband market

Competition in the broadband industry continues to pick up, which means providers can’t solely rely on high speeds to stand out in the market, according to Calix CEO Michael Weening. Weening explained that due to the emergence of fiber, the difference between a cable company and a telephone company is really “no longer relevant.” “Everybody’s starting to think differently,” he said. “Because if we’re using this similar infrastructure which doesn’t differentiate and we’re all driving these incredible speeds that consumers may or may not need, then how do I really differentiate in the marketplace?” Weening went on to say that historically, a company was identified as a cable operator if they used DOCSIS, while telephone companies have focused on telephony, IP, and copper-based technology. The “radical shift” away from those technologies to fiber has “profound implications to our industry as a whole.” Furthermore, Weening said “homes passed” is no longer a sufficient metric to gauge broadband customers, and that providers should be more geared towards the number of subscribers connected and average revenue per user (ARPU). Providers are rolling out multi-gig services, some with speeds of up to 10 Gbps. But Weening argued most consumers aren’t craving those high speeds. He pointed to a recent study where Calix looked across 100 fiber providers who offered multiple service tiers, each ISP having “tens of thousands” of subscribers. The vendor found roughly 17% of consumers chose to take a 1-gig or higher service. “If speed actually meant something to the end-consumer, it would be 100% of consumers taking whatever you offer,” Weening said, whether that service is 1-gig or 10-gig.