Arris Deal 'on Track' to Close by Mid-Year, CommScope CEO Says

CommScope's Eddie Edwards also sees 'more material 5G spend' to start in 2020.

Jeff Baumgartner, Senior Editor

February 21, 2019

3 Min Read
Arris Deal 'on Track' to Close by Mid-Year, CommScope CEO Says

CommScope and Arris are "on track" to wrap up their proposed $7.4 billion merger by mid-2019, CommScope President and CEO Eddie Edwards said Thursday on the company's Q4 earnings call.

Arris shareholders approved the deal, announced last November, about three weeks ago, but the companies are still working through the regulatory approvals process.

Many more pieces need to fall into place, but CommScope announced last week that Arris CEO Bruce McClelland will join CommScope as COO when the deal closes, while current CommScope COO Morgan Kurk will become chief technology officer of the combined company. CommScope has not announced future plans for Arris's video set-top box business amid rumors that it might try to sell that piece, other than to say that it's still evaluating the situation and that it views Arris's position with broadband CPE as a strategic differentiator.

Edwards stressed that the combination with Arris will enable CommScope to hit adjacent markets and become a stronger mobile and wireless player, with Arris's experience with unlicensed spectrum (mostly through Ruckus Networks) working in tandem with CommScope's expertise in licensed spectrum. He said that mix will come into play particularly with respect to converged small cells. Before the deal, Arris and CommScope have been focusing on the 3.5GHz CBRS band, an emerging shared slice of spectrum that will support both unlicensed and licensed use cases alongside the band's incumbents (the US Navy and some satellite uplink usage).

5G spending poised to be 'more material' in 2020
CommScope's guidance of $1.05 billion to $1.1 billion indicates a slow Q1, with some pickup occurring later in the year as the company's DAS (distributed antenna system) business benefits from a "refresh cycle" at various indoor venues.

Its 2019 sales guidance of $4.5 billion to $4.65 billion also reflects some caution, as spending from certain operators will slow due to industry M&A and reduced spend on LTE as carriers shift their priorities to 5G.

"We believe that the more material 5G spend will begin in 2020," Edwards said.

On the 5G front, CommScope recently connected with Nokia on a Massive MIMO, beamforming integrated antenna platform that aims to support the higher levels of data traffic expected to come with 5G. That initiative combines CommScope's dual-band FDD-LTE antenna with two Nokia AirScale radios.

Edwards said CommScope is also making progress with OneCell, an in-building, mesh-style small cell and controller system.

He said OneCell is expected to gain traction in the latter half of 2019, and that CommScope, for the first time, is now starting to generate revenue from that product in North America.

"The approval process [for OneCell] is as rigorous as somebody like an Ericsson or a Nokia getting an outdoor radio platform approved," Edwards said.

He also expects the indoor part of CommScope's DAS business to grow at a faster pace than the rest of the company's wireless/mobile business. "The market has shifted to indoor [for] our metrocell capabilities," Edwards said.

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— Jeff Baumgartner, Senior Editor, Light Reading

About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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