S-A re-enters CMTS game via Pacific Broadband deal
After going years without a cable modem termination system of its own, Scientific-Atlanta Inc. said today that it will bolster its data strategy via a reselling arrangement with San Jose, Calif.-based start-up Pacific Broadband Communications.
Under terms of the deal, S-A will be the exclusive reseller of PBC CMTS equipment in North America. S-A will distribute the gear internationally on a non-exclusive basis. PBC, meanwhile, will continue to build out its international sales force and market its CMTS products under the "Kodiak" brand.
Specifically, S-A, which made an equity investment in the fledgling company earlier this year, will resell PBC's stand-alone CMTS chassis under the "Prisma G10" brand and its CMTS line card product under the "Prisma IP" moniker. PBC's CMTS technology is qualified for DOCSIS 1.0 and is currently undergoing testing at CableLabs for the more advanced DOCSIS 1.1 specification. PBC also has plotted plans to make CMTS equipment based on DOCSIS 2.0, a spec designed to mitigate noise and widen cable's upstream path for advanced services such as video conferencing.
S-A said it expects the G10 box to become available by the end of the year, and the Prisma IP CMTS to launch commercially sometime in 2002. Those products are also expected to complement S-A's line of WebStar cable modems.
S-A's large sales force and deep relationships with cable operators likely will give PBC a leg-up in selling its product at a faster clip than it would on its own. At the same time, having S-A in the fold will answer any customer questions cable operators might have about how well those products will be supported in the lab and in the field, noted PBC Vice President of Worldwide Sales and Customer Support Michael Allen.
Paul Connolly, S-A's vice president of network architecture, said the time was right for S-A to re-enter the data market with a line of CMTS products as cable operators continue to move beyond legacy equipment and build out their networks for high-speed data and other new services. Cable operators were nudging S-A to incorporate new data products into the company's overall network design, Connolly said.
He forecasted that PBC's custom-built silicon would help S-A differentiate itself from a highly-competitive CMTS field that includes Motorola Broadband Communications Sector, ADC Telecommunications and Arris Group Inc., among others. Most CMTS typically tap third parties, such as Broadcom Corp., for their chipsets. Terayon Communications Systems is one exception, however.
While the deal appears to have clear benefits for both S-A and PBC, such arrangements don't always work out. Earlier this year, Riverstone Networks Inc. and Tellabs Inc. traded lawsuits tied to a deal in which Tellabs resold Riverstone's CMTS equipment. Riverstone alleged that Tellabs failed to fulfill its sales obligations, and Tellabs countered by charging Riverstone with breach of contract and is seeking $10 million plus punitive damages.
Michael Capuano, PBC's senior director of product marketing, conceded that there are sales goals attached to the S-A deal, but declined to provide specifics. He said both S-A and PBC are "very comfortable" that they will fulfill their obligations.
"We wouldn't sign up for anything that we don't think we could do," Connolly added.
Though PBC has yet to sell any product, it has technical field trials slated with "several" MSOs for later this year, Allen said.