Comcast: No New Moto Deal
"There is no deal. The report is incorrect," Comcast spokesman Charlie Douglas said in a statement sent via email. "We don't disclose details about our contractual agreements."
Despite that denial, Collins Stewart plc 's John Vinh, the analyst who reported the deal in a report distributed on Tuesday, said his position remained unchanged. "We are sticking to our note, which indicates MOT has won an EMTA order at CMCSA," he said via email.
Vinh's note also suggested that a technical glitch in some Thomson S.A. (NYSE: TMS; Euronext Paris: 18453)-made EMTAs headed to Comcast had triggered a recall that may have factored into the new purported EMTA deal with Motorola. Thomson clarified Vinh's representation of that situation, noting that it did encounter a potential problem that could emerge during the installation of those EMTAs, but that the vendor fixed it proactively before any of those models were deployed (more on this further below).
As for the Moto deal, Vinh said Comcast awarded Motorola with an order for Docsis 2.0-based voice modems in the range of 50,000 to 100,000 units, with initial shipments expected to begin in the first quarter of 2009.
Arris, once Comcast's exclusive EMTA provider, started losing some ground to Thomson last year when the MSO picked the latter as its second source for the equipment. (See Comcast Gives Thomson Nod for DTAs .)
Arris is still on course to be involved in the MSO's deployment of Docsis 3.0, but acknowledged last fall that general growth prospects for 2009 remained murky as operators continued to pore over capex budgets. (See Arris Tempers Q3 CMTS Sales Surge , Comcast Wraps Up '08 Wideband Rollout , and Comcast Buying Arris Docsis 3.0 Gear.)
Given its apparent visibility into the new Comcast-Moto deal, Collins Stewart trimmed some forecasts on Arris. It now expects Arris to record first-quarter revenues of $278 million (versus its earlier estimate of $282 million), and second quarter revenues of $274 million, versus $277 million.
Arris shares closed Tuesday at $7.64 each, down 16 cents for the day. Both Arris and Motorola declined to comment on Vinh's note and the suggestion that a new EMTA deal is afoot.
The suggestion of an EMTA recall put Thomson on the defensive Tuesday. The vendor denied there was a formal product recall, but did acknowledge that it identified a potential integration issue with the DHG536 early on. The vendor says it proactively arranged for the return of an undisclosed "portion" of the DHG536 modems Comcast had in its inventory so it could fix the problem.
The "potential risk" Thomson uncovered was linked to the provisioning and installation of the device, but the vendor declined to offer further details as to the nature of the problem.
"By no stretch of the imagination is there a recall" of the DHG536, said Charles Roederer, Thomson's GM of North American sales, cable.
Thomson, he noted, identified the problem, fixed it, and replaced the EMTA inventory before any of those models reached commercial deployments.
"We took the proactive position of replacing those units in question," he said, noting that Comcast has encountered no field issues with the DHG535, the precursor to the DHG536.
Thomson began shipping the DHG535 to Comcast in the first half of 2007, and then moved to the DHG536 in the second half of 2008.
Thomson has not disclosed its EMTA share with Comcast, but the vendor started shipping a "substantial amount" to the MSO by the fourth quarter of 2007, Roederer said. "We've been... one of the key suppliers of Comcast, and have every indication that it will continue as such going forward."
— Jeff Baumgartner, Site Editor, Cable Digital News