Cashing In on Docsis 3.0
Cisco Systems Inc. (Nasdaq: CSCO) and Motorola Inc. (NYSE: MOT) will certainly play in Comcast's deployment equation, but how much is this initial deal really worth to Arris as Comcast wires up to 20 percent of its plant for Docsis 3.0 this year? (See Comcast Enters the Wideband Era .)
Arris didn't offer any financial guidance, other than to say it was a "significant deal."
In a note issued this week, Morgan Keegan & Company Inc. pegs the Docsis 3.0 CMTS opportunity this year Comcast at between $336 million to $480 million.
The math: Assuming a 2008 network buildout covering about 9.6 million homes, with 200 homes served by each downstream port, the Comcast 3.0 market looks to be on the order of 48,000 ports. Port prices are in the range of $7,000 to $10,000, according to Morgan Keegan.
And Arris's share of the pie? According to Morgan Keegan's "reasonable and conservative" model on the vendor, it sees something in the range of $80 million to $140 million for all CMTS purchases from Comcast.
But there are some unknown variables, such as subscriber take-rates and bandwidth requirements, "so our exercise, we think, illustrates an upper-end for the Docsis 3.0 opportunity in 2008," the firm adds.
— Jeff Baumgartner, Site Editor, Cable Digital News