Today's merger indicates strength in the sector and will be positive for CMTO to the extent that increased competition means more upgrades. I don't know their specific position with either Comcast or MediaOne, but the following links may help you understand their position within the industry:
Contract with High Speed Access Corp, whose company description says:
High Speed Access Corp. presently has agreements to launch service in more than 50 cable systems. High Speed Access Corp. is a privately held venture capital-funded company. A significant minority interest in High Speed Access Corp. is held by Investor Paul Allen's Vulcan Ventures of Seattle, Washington. In November of 1998, High Speed Access Corp. entered into a strategic partnership with Paul Allen's Charter Communications.
com21.com
About HSA Corp:
hsacorp.net
hsacorp.net
HSA Corp White Paper:
High Speed Access Corp. Publishes White Paper On Web Site
DENVER, Colo. - Cable modem sales increased by 130 percent in 1998 according to a recent study by market research firm, Dataquest, which will lead to an installed base of 5.2 million units by 2002. The Strategis Group, another market research firm, predicts a customer base of 9.1 million homes by 2003. To make this vision a reality, cable operators need to infuse marketing muscle into the broadband pipe, says Ron Pitcock, president of High Speed Access Corporation, the nation's leading full turnkey solution cable high-speed Internet service provider, who outlines the key benefits of partnering with a third-party provider in the provision of high-speed access service in his white paper, “Flying Solo or Forming a Partnership: Deciding How to Offer High-Speed Access.”
The white paper is now available on High Speed Access Corp.'s web site at hsacorp.net. From the main page, click on “Company Story” and then click on “In the News.” Once there, the reader scrolls down to the “research” section where a link to the paper is located.
Bio on their CTO:
With extensive experience in all aspects of engineering and operations for major cable and telephony companies, Atul Doshi brings more than 25 years experience to High Speed Access Corp. As Chief Technology Officer, he brings his skills in technologically implementing integrated services and oversees all engineering and operation functions for the company in the departments of Engineering, Technical Operations, Program Management, Product/Service Definition, Technology Management and Asset Management.
Prior to joining HSA, Mr. Doshi served as Regional Vice President Engineering and Construction for National Markets Region for MediaOne Group. While overseeing more than 20,000 miles of cable plant, he implemented a regional organization structure targeted to an integrated services offering, he also consolidated and integrated the functions of seven large autonomous markets and deployed two-way, high-speed Internet services in four markets, one-way services in all markets and HFC telephony services in two markets. Through an engineering redesign, he generated several million in capital savings. Previously, Mr. Doshi served as Director, Multi-Media Services at MCI, held several director posts at New York Telephone, where he was responsible for operations and engineering for the New York City telephone network, and worked as the Director of Advanced Engineering at Warner-Amex Cable Communications.
Other corporate officers have equally impressive credentials.
Besides HSA Corp, CMTO's customers include the following, as listed in a recent CSFB report:
TCI (AT&T), Cox Communications, Prime Cable, France Telecom, Cablecom of Switzerland, and Fibertel/TCI International of Argentina. . . . the company has enhanced the rate at which it penetrates international markets through its OEM relationships with Philips and Siemens.
The report goes on to say:
COM21 has shipped over 500 data over cable head-end systems and approximately 97,000 cable modems through Q498. This installed base of data over cable head-ends has the potential to support up to one million cable modems providing the company with significant future growth opportunities in the proprietary systems market. The approximately 900,000 additional cable modems that could be supported by this head end installed base exceed our forecasted shipments of 690,000 cable modem units for the company through the end of 2000. Moreover, we believe COM21 will ship a significant number of head end systems in the future to support new deployments in select international markets and in U.S. cities where the company already boasts a significant customer footprint. . . .
We believe the introduction of cable modems supporting the DOCsis standard will actually enhance COM21's market opportunities. Our view is based upon the fact that although DOCSIS creates interoperability between various vendors' products, significant differences in performance and reliability of cable modems will remain during the foreseeable future allowing companies such as COM21 with a strong technology position to maintain its competitive position. The opportunity to sustain differeentiation reflects the significant vagaries in the quality and stage of upgrade of cable infrastructure in the U.S. market. In addition, the ongoing transition of cable network architectures to support interactive services as well as traditional broadcast services suggests that network complexity is increasing and that new technology implementation in this environment is non trivial. As such, we believe data over cable technology is currently not a commodity and that the move to true "plug and play" systems will emerge gradually during the next 24-36 months. We believe COM21 plans on augmenting its initial introduction of a standards-based DOCSIS modem product with systems products during the next 6 - 12 months. One of the primary areas of focus for COM21 is supporting voice in data over cable service environments. . . .
Based on the above information, it would be valuable to find out how many head-ends HSA is buying. The press release doesn't distinguish between CPUs, but says, "The agreement with Com21 covers volume purchase by HSA of 40,000 ComPORT® cable modems, ComCONTROLLER® headend switches, and the network management software. The equipment will be purchased over a 12-month period."
BTW, welcome to SI!
Regards,
Pat |
