At least in the early phase of the global cable industry's migration to virtualized network tech, San Jose, Calif.-based Harmonic is cleaning up.
Charter Communications said that it will use Harmonic's virtualized cable network termination system (CMTS) software product, CableOS, and make the vendor its “strategic technology partner‘ as it embarks on a national upgrade of its networks to a multi-gigabit-cable transom built around distributed access architecture (DAA) and DOCSIS 4.0 standards.
It's yet another major cable network virtualization win for Harmonic, which has already secured, according to one analyst's estimate, around $450 million worth of business from Comcast, with the No. 1 U.S. cable operator well on the way to establishing its own virtualized network upgrade. All told, Comcast accounted for nearly 40% of Harmonic’s revenue last year.
“We could envision a similar sized opportunity for Harmonic at Charter,” wrote Raymond James analyst Simon Leopold.
Harmonic has recently secured other big CableOS contracts with cable operators, including Canada’s Rogers Communications and the U.K.’s Vodafone, as well as tier 2 MSOs GCI and Buckeye Broadband in the U.S.
Now, Charter, the No. 2 U.S. cable operator, is embarking on a three-year, multibillion-dollar upgrade journey, similar to Comcast, to what the cable industry calls “10G,” a marketing term to describe networks that deliver symmetrical speeds of 5 gigabits per second or more.
Last week, another cable tech vendor, British Columbia-base Vecima Networks, announced that a "major tier 1 U.S. service provider has selected its Entra distributed access architecture (DAA) solution with ERM3 Remote PHY Devices to support its enterprise-wide fixed broadband network upgrade to 10G."
That MSO is widely believed to be Charter.
And like Comcast, Charter will also be ditching expensive proprietary hardware appliances in its network, notably CMTS, and replacing them with CableOS software that runs on standard computer servers.
Harmonic share prices on the Nasdaq are up around 9% since the Charter deal was announced Monday.
Charter’s Harmonic announcement comes just days after Casa Systems broke disappointing news to its investors that wouldn’t be receiving any virtualization tech business from Charter in fiscal 2023. But Casa said it did secure an unnamed major European MSO for its vCMTS product.
And with other competitors, including CommScope, circling with their own vCMTS offerings, it's still somewhat early days in the global transition to the technology.
In November, for example, research company Dell’Oro Group released results of a survey in which it asked 50 cable operators around the world if they plan to deploy vCMTS architecture in the coming 24 months. All of them answered yes. ■
