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Technology Stocks : Terayon - S CDMA player (TERN) -- Ignore unavailable to you. Want to Upgrade?

To: Starlight who wrote (1271)	11/20/2000 11:09:23 AM
From: Platter	Respond to of 1658

Terayon CEO eyes more acquisitions in 2001 Sunday November 19 07:35 PM ET By Steven Scheer TEL AVIV (Reuters) -- Terayon Communication Systems (TERN) plans more acquisitions in the coming year as it aims to challenge Canada's Nortel Networks (NT) and Cisco (CSCO) of the U.S. for leadership in cable telephony, Terayon's CEO Zaki Rakib said. Terayon aims eventually to have 20 percent of the global market supplying cable companies with equipment to provide voice, data and video services to compete with traditional telephone giants, Rakib added in an interview on Sunday. Cable companies are just beginning to offer telephone services and Terayon expects it to take another year or two until telephony is widely available via cable in North America, Europe and Asia. Over the past year, Terayon -- which until recently was regarded as largely a broadband Internet modem maker -- has made nine acquisitions, mostly in companies dealing with voice and data over broadband. "We have what we need in voice but we are still missing key technologies on the video side," Rakib told Reuters while visiting Israel. "We want to expand our role in video distribution and we are looking at more acquisitions in that area." He said the Santa Clara, California-based Terayon -- which bought five Israeli companies during the past year -- has no particular company in mind for its next acquisition since it is still in the midst of integrating its previous purchases. Rakib said the company would look beyond Israel and the United States to European and Asian technology firms for future acquisitions. But Rakib said Terayon was entering a new phase after the fast and furious buying spree. "We want to move at a slower pace," Rakib said. "It's a process. We always debate between internal development and acquisitions." The company has been hit by drops in the Nasdaq. Terayon's shares closed at $18-9/16 on Friday, just slightly above its year low, and well below its year high of $142 per share. TERYON BANKING ON TELEPHONY SERVICES VIA CABLE Terayon is banking on telephony services from cable companies taking off. Already, AT&T (T) through its various cable company acquisitions, has started offering limited telephony service, although Terayon said AT&T is using older circuit switches and not newer technologies as of yet. "Our long term goals were that we had to expand beyond high-speed data over cable through a series of acquisitions," said Golan Manor, Terayon's vice-president for technical marketing, noting the convergence of those acquired companies resulted in a new line of offerings. The company cited studies showing 25 percent of U.S. phone subscriptions will be through cable companies in the next five years while the market size for voice over broadband networks will be 16 million lines in the United States by 2003. "If we get three to four million lines out of it that will be a substantial achievement and that's a goal we are looking at," Rakib said. "We are betting on a 20 percent (global) market share, which is what we have in cable modems. It will be a significant challenge to us." Part of the challenge is that Terayon has to compete with powerhouses such as Nortel and Cisco. But Rakib said the landscape has changed, allowing smaller, innovative companies to carve out a significant market share. In addition to competitors fighting for a piece of the pie in the fledgling voice over cable sector, traditional telcos will continue to develop services using high-speed Internet, while wireless broadband looks to become a major player. As a result, cable companies will have to prove they can offer the same or better services for less costs. "It's going to be a competitive landscape," Rakib said. "He who can take advantage of bandwidth and offer the maximum number of services gets the bigger market share." © 2000 Reuters Limited. Click Here for Limitations and Restrictions