The incredible shrinking pool of cable modem termination system (CMTS) vendors got even smaller last month.
Juniper Networks Inc., after buying its way into the CMTS market back in late 2001 by putting up $200 million for Pacific Broadband Communications, has decided to scuttle its G-series CMTS line and forge a deal with Arris. Under the co-marketing deal, Arris will offer Juniper's IP routing gear to cable operators, and Juniper, in turn, will have access to Arris' trio of CMTSs– the flagship Cadant C4, mid-capacity C3 and low-end Cornerstone CMTS 1500.
The Juniper G-line had managed to win some international business, but had not gained much traction in the U.S. cable market. At the end of 2002, Juniper owned just two percent of the global CMTS market, according to Gartner Dataquest data.
What remains a bit unclear is how Juniper's decision will affect Scientific-Atlanta, which, through a separate agreement, resold Juniper's CMTS gear under the Prisma G10 and Prisma G1 brands.
Because Juniper has decided to drop its CMTS line, "It would appear that [S-A's] relationship with Juniper would be moot," an S-A spokeswoman said, noting that how everything will shake out remains under discussion. At press time, S-A did not have a CMTS deal with Arris in place.
S-A does not break out CMTS revenues separately, but CMTS sales have been insignificant enough that Juniper's decision won't impact S-A's revenue guidance. S-A's only announced sale involving the Prisma CMTS line was with com hem, a Swedish MSO.
Because it gives Arris access to Juniper's heavy-duty, core routing products, the deal puts Arris on better competitive footing with Cisco Systems.
Arris had a similar relationship with Juniper before Pacific Broadband entered the picture, but Juniper's exiting of the CMTS market "has rekindled that relationship," said Jim Lakin, president of Arris' broadband unit.
Juniper's move was the latest in a consolidating CMTS market, predicted for months by industry analysts such as Patti Reali, principal analyst with Gartner Dataquest.
"Fundamentally, the market was not going to be able to support all of these players," she said. Reali's most recent forecast puts CMTS revenues at $473 million this year, $533.5 million in 2004, and $692.4 million in 2007.
Com21 Inc., as expected, filed voluntary bankruptcy in July. It has since agreed to sell its DOCSIS CMTS assets and Irish R&D subsidiary to Arris for $2.8 million, and to license its DOCSIS and EuroDOCSIS cable modem technology to Taiwan-based CastleNet Technology. At press time, Arris' proposal was subject to other bidders.