The cable broadband technology business is a competitive sector right now, with incumbents like CommScope trying to hold off insurgents including Harmonic as cable operators upgrade and virtualize their networks for the ”10G“ future.
Harmonic, which received a $175 million commitment from Comcast three years ago, with the No. 1 U.S. cable operator developing its future network virtualization framework around Harmonic’s Distributed Access Architecture (DAA) technology, believes it's on the cusp of yet another huge customer victory.
“There’s a growing industry consensus that the particular variant of DAA we pioneered with Comcast and other early customers that its virtualized CMTS paired with remote PHY nodes is the most architecturally advantageous and market-proven solution and consequently, the best way to go,” Harmonic president and CEO Patrick Harshman said during the company’s third-quarter earnings call Monday.
Light Reading reported last week that Charter Communications is now following the same DAA recipe of virtualized cable modem termination system (vCMTS) paired with remote PHY (R-PHY).
Harshman was careful Monday to add that the “growing consensus” he mentioned several times ”isn’t complete.”
Also last week, for instance, the biggest cable tech vendor, CommScope, revealed that the No. 5 U.S. cable operator, Mediacom Communications, had signed on to use the tech company's "MACPHY" DAA solution — a technology that also extends MAC (media access control) processing to the outer node-level edges of the network, in addition to CMTS functions.
“We are prepared and capable of supporting MACPHY,” Harshman noted.
Cable operators are replacing bulky, expensive proprietary network hardware with virtualized solutions such as Harmonic’s CableOS, which runs on commodity-level computer servers. It’s a step to a broader agenda referred to in cable industry marketing-speak as 10G — symmetrical downstream and upstream delivery of multi-gigabit speeds using the next generation of the industry's core-level DOCSIS technology, DOCSIS 4.0.
And right now, the vendor market is heated.
“It’s just becoming a much more competitive market for traditional cable operators,” Harshman said. “I think some of them are deciding that the time to evaluate different technology alternatives is over and the time to begin planning to get on with it is at hand.”
Of course, on Wall Street, the narrative of a tech company on the cusp of possibly controlling the future of American wireline broadband only carries so much clout.
For the third quarter, Harmonic beat forecasts on revenue with a 23.3% year-over-year sales uptick to $155.7 million. Still, revenue from its video segment was down, and the company’s stock price had cratered more than 10% in late-morning trading Tuesday. ■
