Looking for convergence through acquisition, BigBand Networks Inc. is acquiring the IP cable business unit of ADC Telecommunications Inc. for an undisclosed price.
The acquisition will give BigBand the coveted triple play - adding ADC's Cuda DOCSIS technology and FastFlow service provisioning product to its own video bandwidth management systems.
Financial details were not released, but the deal calls for ADC to become a minority interest holder in BigBand. ADC will keep its Homeworx cable telephony system, which has up to now been part of the cable product unit. Closing is expected some time by the end of this quarter.
BigBand has had its eye on delivering services outside of video since its beginnings, but early on it chose video because that's where the biggest market need lay for bandwidth management, said Amir Bassan-Eskenazi, the company's founder, president and CEO. The company had been working with various companies offering DOCSIS technology with an eye toward acquisition, and last year, it approached ADC about buying its cable unit, Bassan-Eskenazi said.
"We were always about the network play of offering multiple services. It was always a question of when, not whether, does our market converge with DOCSIS and become one, and our architecture was always built for that," he said.
BigBand plans to continue marketing the Cuda and FastFlow product lines. More than 900 Cuda cable modem termination system (CMTS) units have been deployed so far, and "we think it has a very strong technology platform it is working on and a very strong team that we very much hope to integrate with our own as we integrate the BMR platform and the Cuda platform under the BigBand company," Bassan-Eskenazi said.
But the company also has plans to develop a parallel, converged product line melding the video-centric BMR with Cuda's DOCSIS and IP planks.
"It was always very clear to us that those markets converge - converge from the fact that as more and more VOD is being deployed, as more and more HD is being deployed, that takes a lot of bandwidth, at the same time there is more high-speed data," Bassan-Eskenazi said. "Subscribers in each one of them consume more bits, and that calls for a holistic approach to managing bandwidth, combining the DOCSIS bandwidth with the video one over the last mile - offering services that enable data-enhanced video services as well as video-enhanced data services."
Plans to integrate the ADC unit into BigBand have yet to be formed, but the company will keep its Westborough, Mass. offices housing the bulk of its employees and research and development operations, Bassan-Eskenazi said.
BigBand and ADC's IP cable assets provide a synergetic combination, said Jay Rolls, vice president of telephone and data engineering at Cox Communications, an MSO that uses equipment from both companies.
"This [deal] is about creating a larger value equation. There are real efficiencies to be gained here," he added. "Long term, we're headed toward networks that will be all-digital networks. You've got to start out somewhere, and this agreements is a good start in terms of having the talent and the ideology [required] for that type of equipment."
Rolls estimated that as much as 25 percent of Cox's CMTS footprint is made up of Cuda gear. Cox also buys CMTSs from Cisco Systems and Motorola Broadband.