• ZDNet.com, Thursday, December 13, 2007 11:30 AM

Credit rating and analysis firm Fitch thinks cable multiple service operators (MSOs) are set to add 11.5 million new revenue generating units, known as RGUs, this year, growth of about 12% vs. 2006. But that rate is expected to slow next year. But Fitch sees growth in telephony subscribers up from 40% of total new RGUs in 2007 to 45% in 2008. It also sees the cable industry losing about 1.5% of its basic subscribers to increased local exchange carrier and satellite competition.

And the impact of competition on basic subscribers will be even more pronounced in 2008, due to weak new home growth and better product offerings from competitors. Digital television subscribers are expected to grow in 2008 as high definition television and digital video recorders expand their reach, but even that pace will slow. In sum, Fitch sees digital television to hit penetration rates of approximately 60% by the end of this year-end, a rate that will hit 64%in 2008.

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