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S-A signs trio of set-top deals

Thu, 10/18/2001 - 8:00pm
Anne Kerven

Scientific-Atlanta signed three major set-top deals on the heels of releasing its first-quarter results and announcing that it would cut 750 jobs worldwide.

Time Warner Cable committed to purchase 625,000 Explorer digital set-top boxes, including a deal involving 100,000 Explorer 8000 units the two announced earlier this year.

The 8000 uses an internal hard drive for PVR applications, including time-shifting and program recording, and dual video tuners.

"The 8000 is top of the line," says Joshua Wise, digital media analyst at Allied Business Intelligence. "If they're ordering that many, it's a good indicator that Time Warner is moving toward that (8000) to see how they do in the field."

Despite TWC's interest in a high-end box, Wise says he's concerned that AT&T Broadband's decision this past summer to shelve its order for advanced digital boxes may have influenced other operators, who are "realizing they can get some revenue from the 2000." The 2000-class set-top (Explorer 2000 from S-A and DCT-2000 from Motorola) is a basic model and thus far, operators have no "financial justification to jump to more advanced."

S-A isn't disclosing the financial terms of this deal or two others, but Wise says the 8000 box alone costs about $500 each without discounts. With a volume discount, TWC likely would get the boxes for about $375 to $400 each, "something along those lines," he says. The discount would make the 8000 part of the deal about $37.5 million to $40 million.

TWC spokesman Mike Luftman says the company isn't disclosing the financial terms of the deal, but did say that, "They are our major set-top box supplier."

An S-A spokesman could not be reached by CEDaily's deadline, but company President and CEO James McDonald said in a conference call yesterday that the company had received an order for more 8000 boxes from "a second large MSO."

The TWC deal also includes 50,000 Explorer 3100HD set-tops, which will decode all 18 ATSC high-definition digital formats for HDTV, as well as standard definition digital and analog video services, S-A says.

Finally, TWC ordered 475,000 Explorer 2100 digital set-top boxes, which allow iTV applications, including VOD, SVOD, e-mail, Web browsing, chat and e-commerce, the company says.

Separately, S-A announced yesterday it will supply equipment and services for Tomen Mediacom's iTV cable system in Japan. Under the deal, S-A will provide cable headends, Explorer digital set-tops, interactive applications and professional services from its SciCare Broadband Services. The company says a digital system was installed earlier this year and deployment of the set-tops will start in the Spring.

Finally, AOL will develop a version of its AOLTV service for cable to use on S-A's Explorer 2000-level boxes. The version will include AOL communications, such as e-mail, instant messaging, the Buddy List feature and Buddy chat, S-A says.

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