Arris IP Video Gateways Break In at Suddenlink
In a research note issued Tuesday, Avondale Partners LLC analyst Blair King said the deal could generate revenues of about $41.3 million for Arris, should Suddenlink achieve a 10 percent penetration rate with the vendor's Moxi gateways during the next four quarters. Suddenlink, the seventh-largest incumbent U.S. cable operator, ended the first quarter with 796,400 digital video customers and 1.25 million basic video subs in parts of Arkansas, Arizona, North Carolina, Texas, Louisiana and Oklahoma.
Suddenlink and Arris declined to comment on the purported deal, but a Suddenlink exec identified Arris as one of the video gateway suppliers it was considering during a panel at last week's Managing & Monetizing OTT Video event in Boston, although he didn't indicate if Suddenlink had indeed made a commitment to buy and deploy Arris gateways.
Still, the addition of Arris's hybrid QAM/IP gateways would expand Suddenlink's lineup of boxes with over-the-top (OTT) video capabilities. Suddenlink's been leading off its next-gen video strategy by leasing out Premiere HD-DVR boxes from TiVo Inc. (Nasdaq: TIVO). Operator-leased TiVo boxes don't support Netflix Inc. (Nasdaq: NFLX) streaming because some of Netflix's contracts with studios don't allow it. But Arris's Moxi box can get around that limitation by connecting the gateway to a PC and using media server software from PlayOn. (See Netflix's Path Into MSOs Becomes Clearer and Suddenlink Blames Netflix Contracts .)
Suddenlink, if it has indeed pulled the trigger on such a deal, would also mark the first set-top deal with a top 10 U.S. cable operator for Arris since the vendor purchased Paul Allen's Digeo Inc. in 2009 for $20 million. Arris's largest cable operator customer for Moxi boxes is Shaw Communications Inc. of Canada (2.25 million basic video subs), to go along with existing U.S. deals with BendBroadband , Buckeye CableSystem and WideOpenWest Holdings LLC (WOW) . King noted that Arris has at least four other gateway deals in the field trial or early deployment phase. (See Arris Digs Digeo .)
— Jeff Baumgartner, Site Editor, Light Reading Cable