BigBand's Material World
BigBand didn't disclose the terms of the deal, but did say that AT&T was poised to become a "material" customer in the second half of the year. Morgan Keegan & Company Inc. 's Simon Leopold did one better in a note issued today suggesting that he believes the deal is worth $4 million to $9 million (including services) over several quarters – not exactly a king's ransom.
But taken into context, it's still not too bad for a company that's struggling to diversify its primary purchasing sources.
Leopold recalls that that BigBand brought in just over $18 million in the first quarter of 2011, so it wouldn't take much for AT&T to become one of BigBand's 10 percent-or-greater customers.
BigBand will be taken to task on its growth prospects soon enough; it reports second quarter numbers later today.
In the meantime, Leopold's rekindled the idea that BigBand, with an enterprise value of just $18 million, could become an attractive takeover target. Having AT&T in the stable as a new customer doesn't hurt.
And that idea might not be all that far-fetched if a prospective buyer believes that the dense edge QAM market still has legs or the modular version of cable's next-gen Converged Cable Access Platform (CCAP) stands a chance of making hay – something CommScope Inc. apparently believed when it snapped up LiquidXstream Systems last month. (See Why CommScope Bought LiquidxStream.)
— Jeff Baumgartner, Site Editor, Light Reading Cable