Moto to Resell ECI DSLAMs
Motorola has the "global rights to brand, market, and sell ECI's portfolio of access infrastructure solutions," which includes central office and remote DSL access multiplexers (DSLAMs). (See ECI, Keymile Debut IP DSLAMs and ECI Takes CO to the Street.)
On paper, the deal makes sense for both parties.
For ECI, it gives it a fresh line of attack on North America, where it had tried, but failed, previously with Nortel Networks Ltd. as its partner. (See ECI: Nortel Didn't Deliver.)
With that relationship consigned to the dust bin, ECI began looking for a new partner. On a conference call in February this year, CEO Rafi Maor said he had reached an agreement with "a major North American manufacturer," and that "sales activities from this [relationship] are set to start in late 2007." (See ECI Revisits Broadband, Shutters Laurel.)
The question now is whether Motorola is the right partner for North America, a market ECI is desperate to break into to help broaden its broadband access customer base.
Currently, ECI has a formidable, but very limited, lineup of customers for its DSLAM equipment, and has been looking for ways to expand its access equipment user base for some time. Whereas a major competitor such as Alcatel-Lucent (NYSE: ALU) can point to almost any Tier 1 carrier as a customer for its DSLAM gear, ECI relies on three main customers: Chunghwa Telecom Co. Ltd. (NYSE: CHT), Deutsche Telekom AG (NYSE: DT), and Orange (NYSE: FTE). (See Alcatel, ECI Land DT Gig, ECI Makes Hay in Taiwan, Europe, and ECI Drops Despite VDSL2 Coup .)
These customer relationships point to strength in depth in ECI's technology, as all three carriers are using the vendor's Hi-FOCuS DSLAMs to support their rollouts of IPTV services, and each carrier has come back with repeat orders.
That's got to be a plus point for Motorola, as the new deal means it can rival major players such as Alcatel-Lucent and Ericsson AB (Nasdaq: ERIC) by pitching a straight DSL-based offering, or a combined fiber access and supporting DSL portfolio, into carrier RFPs.
Motorola's current strength is in its FTTx portfolio, but as more carriers opt to take fiber to the street cabinet or curb, and use installed copper to bridge the final few hundred meters, so Motorola needs DSL capabilities, particularly ADSL2+ and VDSL2, to offer a complete broadband access portfolio. (See Moto Gets a Piece of Verizon FTTP.)
— Ray Le Maistre, International News Editor, Light Reading