Abstract
This paper presents the cost analyses required to ascertain the economic viability of hybrid fibre-coax (HFC) networks from the perspective of telephone service providers. The cost model for an HFC network delivering video is presented first in order for the installed first cost (IFC) for video to be computed. The IFC was found to be very sensitive to the service subscription rate or market penetration rate. Therefore, the economic viability of HFC networks depends on how much market share the telephone companies attain in the near future. Using this HFC network as an infrastructure, the cost model for an HFC network with a telephone overlay is developed, and the incremental cost (IC) analysis for telephony is presented. The cost analysis found that the network interface unit (NIU) is the single major cost component in the IC computation, and that, compared to the IFC for video, the IC for telephony is relatively insensitive to the service subscription rate. © 1997 by John Wiley & Sons, Ltd.
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