I think that the weakest part of TERN is that all they have to offer the cable operator is a cheap entry to internet service. That mention of throttling cusomers at 64kB/sec leads me to believe that their service will, in fact, be a low-cost, low-value option.
SFA offers less innovative transmission solutions, however, real fast internet service is not only possible, it's a fact for their customer's customers. I have COX at home and the service tests consistently above 500kB/sec, typically 1Mb/sec, inclusive of all overhead.
The important fact is, however, that SFA hardware is rolling out digital TV on a big scale. Whereas a cable operator might be able to collect $40/mo. from the 20% of customers that want internet services, they can collect $15-$50 more from 80% of their customers with digital TV. TERN has a pretty good idea but the company is starting with a very limited vision.
TERN cannot enhance system revenues the way a full-service 2 way network can. Again, I must reiterate that they seem to be inferior as a medium for internet service. Therefore, I wouldn't be surprised if one day TERN stops getting design wins and, becuase they lose money prolifically, experience severe financial troubles.
I don't own TERN. I thought that I would want to own a pure play in cable modems but I can't see owning one that loses money quarter after quarter with no end in sight. |
