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Vyyo focusing on upping bandwidth for cable networks

Tue, 02/05/2008 - 8:50am
Brian Santo

As it announced its fourth-quarter earnings, Vyyo also announced that it will sever its wireless operation, which focused on 700 MHz pre-WiMAX technology, leaving Vyyo to concentrate on its products for increasing bandwidth for cable networks.

CEO Wayne Davis had been contemplating the move even as he joined the company 10 months ago, he told CED.

The two operations have little to do with each other and have customers in different businesses. The wireless operation, which sold wireless equipment used by utilities for telemetry, was declining.

That operation, and much of Vyyo’s R&D and back office operations – about three quarters of the company, by Davis’ reckoning – was located in Israel, which proved to be tremendously inconvenient for the cable operation.

It made too much sense to split off the wireless operation, Davis explained. Doing so will eliminate about $20 million a year in burn.

That should prove to be valuable for a company that does not have tremendous cash reserves. The company reported that its cash and cash equivalents and short-term investments totaled $12.7 million at Dec. 31, 2007, down from $19.2 million at Sept. 31, 2007.

Davis said the company will relocate some key members of the R&D team in Israel to Atlanta and then fill out staff.

The move will allow Vyyo to transition from a large bureaucratic system to a more flexible and maneuverable company.

Vyyo sells systems that significantly increase the amount of bandwidth available in a cable network; Davis described it as a next-generation architecture for the cable industry.

That said, MSOs are currently exploring a number of other ways to expand bandwidth, notably by deploying switched digital video (SDV) systems and by splitting nodes. MSOs may exhaust the benefits of these technologies before they feel compelled to increase the bandwidth available on their networks – and then they will turn to Vyyo, Davis explained.

So the company may have to be more nimble in the near future. Vyyo has two key customers in Starhub (in Singapore) and Cox Communications. It just announced that it has signed a master purchase agreement with one of the Top 5 U.S. MSOs; it was not clear if it was another operator or Cox.

Though MSOs may hold off upgrading their entire networks with bandwidth-enhancing equipment, Davis anticipates that Vyyo can continue to prosper in the near term by selling its systems to operators looking to quickly and easily provide services to commercial customers.

For the quarter ended Dec. 31, 2007, Vyyo reported sales of $2.3 million, compared with $1.7 million in the year-ago quarter. The Q4 loss was $8.5 million, compared with a loss of $6.5 million in the like quarter a year ago.

Additionally, Vyyo received notification from Nasdaq that it does not comply with the minimum $50 million market value of listed securities required for continued listing on the Nasdaq Global Market. The company has until Feb. 28, 2008, to regain compliance.

The first difficulty in doing so was that Vyyo’s stock went down on the news of the restructuring and the release of the quarterly earnings.

More Broadband Direct:

• Comcast adds more choices, quicker availability to VOD platform 

• Vyyo focusing on upping bandwidth for cable networks 

• OpenTV’s EclipsePlus ad platform ready for beta testing 

• NDS integrates with Quantum for secure mobile viewing 

• Nominations being sought for Expo, Women in Technology awards 

• U.S. Internet TV viewers on the rise 

• Broadband Briefs for 2/05/08 

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