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Arcwave, a firm that specialized in wireless plant extension gear for cable operators, officially waved good-bye last month.
April 3, 2007
Arcwave Inc. , a firm that specialized in wireless plant extension gear for cable operators, officially waved good-bye last month.
In a posting on its Website by company CEO & President Bill Sickler dated March 15, Arcwave said sluggish deployment activity with cable operators and the vendor's inability to locate and secure a buyer of the company contributed to its demise.
While calling Arcwave "the undisputed leader in providing wireless plant extension solutions to the cable operators," Sickler conceded that "this market did not develop to the extent necessary to sustain a small company like Arcwave."
He added that cable operators "have been slow to pursue the commercial services segment where Arcwave products are applicable. With neither strong revenue growth nor belief from investors and strategic partners that the market will become attractive any time soon, Arcwave has had no choice but to terminate operations."
Before shuttering, Los Gatos, Calif.-based Arcwave was able to net deployments with large cable operators such as Time Warner Cable Inc. (NYSE: TWC), Cox Communications Inc. , Charter Communications Inc. , and Comcast Corp. (Nasdaq: CMCSA, CMCSK) In June 2004, Comcast Interactive Capital participated in an $8 million round of Arcwave funding.
An official for one of those operators, speaking on background, said Arcwave's exit would have a negligible impact on its business services strategy because the MSO still has several hundred Arcwave devices in stock, plus other options if necessary.
Although Arcwave did gain deployments with key operators, they apparently were not enough to sustain the company, which enabled cable operators to beam Docsis-based data signals wirelessly to serve small and mid-sized business customers that were otherwise out of reach of the operator's wired HFC (hybrid/fiber coax) plant. An operator, for example, could tap Arcwave's technology as a long-term solution for reaching a business or leverage it as a stop-gap while HFC or a fiber was run to a commercial customer that is otherwise unreachable due to the presence of a body of water, a new parking lot, or some other physical barrier that in hindered its linkage to the cable plant. Some operators are also using wireless technologies such as Arcwave's to serve areas that are simply too costly for traditional HFC buildouts.
One company that looks to benefit from Arcwave's departure is Wireless Bypass, a Londonderry, N.H.-based vendor that has secured deployments with large MSOs such as Comcast, Time Warner Cable, Charter, as well as smaller operators, including Cable One, Northland Cable TV , and Galaxy Cablevision .
Wireless Bypass President John Servaes conceded that cable sales have been "flat" over the past two years, but that his company is staffed appropriately to handle those production rates. He said Wireless Bypass has shipped north of 500 "links" during the past three to four years, counting eight of the 10 top U.S. MSOs as customers.
"There were some expectations that the volumes would be higher than they've been. We're sized for what our capacity is. It's as simple as that," Servaes said, adding that it was his understanding that Arcwave's staffing level was well beyond its production needs and that may have contributed to a high cash burn and its inevitable decision to shut down. Wireless Bypass, he said, has about 20 people on staff.
"We're fine; we've been stable," Servaes said, noting that Wireless Bypass has seen its growth prospects shift from Time Warner Cable to Comcast -- not surprising given that Comcast has earmarked $250 million of 2007 capex to fund an aggressive foray into the SMB sector.
Servaes said he expects his company to see a "slight uptick" in sales growth now that Arcwave is out of the picture.
Other vendors that could benefit from Arcwave's exit include CommScope Inc. , which announced a wireless extension platform called AirBridge in mid-2005. Vecima Networks Inc. (Toronto: VCM) and Nortel Networks Ltd. also offer HFC plant extension gear.
Operators are also considering WiMax as a wireless broadband platform to serve SMBs, but these days cable operators are using it more often as an enabler for cellular backhaul.
— Jeff Baumgartner, Site Editor, Cable Digital News
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