CommScope is putting its weight behind the development of a virtual cable modem termination system (vCMTS) as more cable operators look to upgrade their hybrid fiber/coax (HFC) networks.

CommScope, a long-time top supplier of traditional CMTS products and chassis, is developing a virtualized "alternative" for the cable access market, company CEO Chuck Treadway said Thursday on the company's Q1 2023 earnings call.

Figure 1: (Source: RidingMetaphor/Alamy Stock Photo)

Treadway didn't elaborate on when the company expected to commercially launch a vCMTS or point to any current deployment or trial activity. But CommScope has been hinting for months that a vCMTS would become a new, key part of its product lineup for access networks.

CommScope had started to develop a vCMTS several years ago but put that project on the back burner. Speaking to Light Reading last fall at the SCTE Cable-Tec Expo in Philadelphia, Guy Sucharczuk, the head of CommScope's access network solutions (ANS) unit, said the company was "reenergizing" its vCMTS efforts.

Treadway's comments today represent a firm confirmation that CommScope intends to compete in a part of the market that is dominated by Harmonic, a supplier that has already bagged vCMTS deals with Comcast and, more recently, with Charter Communications. Casa Systems has also developed a vCMTS and has deployments and trials underway. Vecima Networks is considering its entry into that piece of the market. Cisco Systems' vCMTS work is technically on hold as the company continues to reevaluate its cable access network strategy.

Room for everyone?

A big question going forward is whether there's enough market to sustain all of those competitive options. The good news for them is that recent surveys show that many more cable operators intend to put a vCMTS on their roadmaps.

Speaking at the Light Reading-hosted Cable Next-Gen Technologies and Strategies event in Denver last month, Omdia analyst Jaimie Lenderman said a survey of 60 cable operators in a handful of regions found that 40% had partially or fully adopted a vCMTS, with 55% saying they planned to adopt the technology.

A separate survey from Dell'Oro Group echoed that, finding that all respondents have either deployed or were planning to deploy a vCMTS architecture within the next 24 months.

Revenue lumpiness

CommScope's greater focus on a vCMTS arrives as its ANS unit saw net sales drop 5.7%, to $298.7 million in the first quarter of the year as the timing on some projects have been pushed out. Noting that the cable access business is traditionally "lumpy," the company expects sales to pick up, with revenues more heavily weighted toward the second half of 2023, CFO Kyle Lorentzen said.

Meanwhile, cable access spending is also shifting toward the edge of the access network, which CommScope is addressing with a line of distributed access architecture (DAA) products such as remote PHY and remote MACPHY nodes. CommScope is also seeing sales of cable amplifiers pick up (it shipped more than 1 million cable amps in 2022), and is developing a new Full Duplex DOCSIS (FDX) amplifier for Comcast's DOCSIS 4.0 network upgrades.

Elsewhere at CommScope, the company's plans for its struggling Home Networks unit remains in a holding pattern.

CommScope has delayed its plan to spin-off the unit, which makes set-tops, modems, gateways and other consumer premises equipment (CPE).

CommScope continues to look for the "right separation opportunity" for the Home Networks business, Lorentzen said. In the meantime, the company has "transformation initiatives" underway focused on near-term cost reductions.

Sales at Home Networks dropped 32%, to $337.1 million, amid declining demand for CPE.

Sales at "core" CommScope, which excludes Home Networks, declined 4% to $1.66 billion in Q1. Consolidated sales, including Home Networks, were down 10% to $2 billion.

A bright spot in the quarter was CommScope's NICS (Networking, Intelligent Cellular and Security Solutions) unit. Led by strength at Ruckus Networks, a maker of wireless equipment and software, NICS revenues climbed 51.3% to $284.5 million.

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— Jeff Baumgartner, Senior Editor, Light Reading