SFA expands manufacturing capacity to produce 5.2 million set-top boxes annually!
12 Jun 18:31
By Johnathan Burns
NEW YORK (Dow Jones)--Cable and optoelectronic equipment makers say the rush to push more telecommunications and Internet services on consumers should continue to help line their pockets in the quarters to come.
Executives with Lucent Technologies Inc. (LU), Scientific-Atlanta Inc. (SFA) and Antec Corp. (ANTC) said Monday during presentations at a CIBC World Markets telecommunications conference here that service providers will need intelligent network components and more versatile devices to make selling bandwidth services more efficient.
"We believe the future will be in maximizing management of the bandwidth," said Robert McIntyre, Scientific-Atlanta's chief technology officer. "This is about a network, not just a box." Scientific Atlanta sells transmission equipment and digital set-top boxes, the most visible aspect of its business.
McIntyre said the company sees digital set-top box penetration reaching as high as 70% to 80%, based on information it has gotten from cable operators. "We want to continue to drive speed and processing up in our set-top box," he said. Scientific-Atlanta recently announced that it would expand manufacturing capacity to produce 5.2 million set-top boxes annually. McIntyre said video-on-demand will be the next "killer" application to push digital cable sales, and he said the company is working on ways to allow cable boxes to operate as a gateway to home networks.
Meanwhile, Antec's Chief Financial Officer Larry Margo said his company is introducing products that push fiber optics closer to the home.
Jim Bauer, head of the company's investor relations department, said Antec should benefit from AT&T Corp.'s (T) acquisition of MediaOne Group Inc. (UMG). He said MediaOne is the only cable service provider that hasn't extensively used Antec's equipment.
"We hope that changes with the AT&T acquisition," he said.
He also said AT&T would reach its goal of 500,000 cable telephony subscribers by year end.
"They will meet that if they stay on the plan they have been on," he said. "They'll have millions (of subscribers) by the end of 2001."
In the optical domain of networking, Lucent's Dan DiLeo, president of the company's optoelectronics division, said the metropolitan market in urban areas will be the next battlefield for equipment makers. He said service providers will want increasingly sophisticated equipment that will be smaller and require less power.
"We're rapidly moving to an environment where we can provide programmable components," DiLeo said. As far as performance thus far in the quarter, he said the division is having "very happy times."
And when asked if Lucent would be willing to spin off its optoelectronics business, DiLeo said, "the board (of directors) stays committed to maintain shareholder value and looks at these options." Since the division sells 80% of its components to customers outside of Lucent, he said the company has often wondered if not having the Lucent logo on its products would stimulate even more sales.
"We think it could be significant," he said.
-Johnathan Burns; Dow Jones Newswires; 201-938-2020; johnathan.burns@dowjones.com
(END) DOW JONES NEWS 06-12-00
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