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Adtran Seeks Cable Stardom With EPON Deal

Alan Breznick
9/14/2016
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Becoming the latest big telecom equipment vendor to seek its fortunes in the North American cable business, Adtran is buying key fiber-access products, technologies and customer relationships from CommScope for an undisclosed sum.

Announced this morning, the deal will hand off CommScope Inc. 's active EPON and 10G-EPON infrastructure products and customer premises equipment to Adtran Inc. (Nasdaq: ADTN), which has been a leader in the GPON equipment market but hasn't boasted an EPON portfolio. EPON products are an important asset in the North American cable market because most large cable operators in the US and Canada, with the notable exceptions of such big MSOs as Cox Communications Inc. and Cable One Inc. , are now investing in EPON technology as they extend fiber deeper in their access networks and reduce the number of active RF devices in their plants.

In addition, the transaction will provide Adtran with CommScope's Radio Frequency over Glass (RFoG) product line, as well as EPON products that meet CableLabs 's DOCSIS Provisioning of EPON (DPoE) certification standards and CommScope's MSO customer relationships. As a result, Adtran hopes to be able to expand broadly in both the residential and commercial ends of the cable business.

"This is right down the middle for us," said Gary Bolton, VP of global marketing for Adtran. "We are a top provider of broadband access; we want to own that business."

With the deal, Adtran is following in the footsteps of such other major telecom vendors as the former Alcatel-Lucent (now part of Nokia Corp. (NYSE: NOK), Huawei Technologies Co. Ltd. and CommScope in seeking to establish itself as a major new player in the lucrative North American cable market. Time will tell if Adtran has any more success than those three, all of which have struggled -- and in Huawei's case almost completely failed -- to gain traction against such large incumbents as Arris Group Inc. (Nasdaq: ARRS) and Cisco Systems Inc. (Nasdaq: CSCO). (See Huawei Still Striking Out With US Cable.)

For instance, CommScope never was able to realize its dream of becoming one of the top three or four vendors in the North American cable space. With this sale of its active fiber-access products to Adtran, CommScope will now be left with just its portfolio of passive PON devices for cable operators and other service providers.

But Adtran does have some momentum going into the cable space. While not known as a major player in the North American cable market today, Adtran has actually been active in cable for a while. Up to now, the company has mainly focused on the enterprise services side of the business, providing IP gateways, routers, switches and WiFi for a number of major US and European MSOs. None of those customers has been announced yet.

Now, with the CommScope products added to its portfolio, Adtran plans to expand into the residential market as well with EPON, RFoG and DPoE products. "This fills in a few little gaps," Bolton said. "It fills in some near-term opportunities."

Adtran will also inherit CommScope's cable customers for these products, including several undisclosed MSOs in the US, Europe and Latin America. "It does provide some incumbent business for us," Bolton said.

Plans call for integrating all of CommScope's products into Adtran's Mosaic family of SDN solutions for gigabit services. That's part of Adtran's goal to become one of the top global players in software-defined broadband access. (See Adtran Targets Gig Services to MDUs.)

Bolton also indicated that other cable-related deals may follow. "We have some pretty exciting things on our roadmap," he said. "I'd say we're in the best position to win going forward as the network becomes more open. We're in the disruptor position there."

The move by Adtran comes as many vendors are eyeing the cable access business right now. In a recent research note to clients, analyst firm Jeffries reinforced the appeal of the market. "We're currently in front of a significant upgrade cycle as MSOs are driving fiber deeper into the network and performing node splits to enable smaller service groups," Jeffries said.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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brooks7
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brooks7,
User Rank: Light Sabre
6/21/2017 | 2:11:58 PM
Re: New cable broadband vendor battle brewing?
Duh!,

I would say they did (in bulk) reconsider EPON and did DOCSIS 3.1 instead.

seven

 
zookeierer
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zookeierer,
User Rank: Light Beer
6/21/2017 | 1:45:20 PM
New cable broadband vendor battle brewing?
I'm also curious to see how far cable goes with EPON. It always felt like they just picked EPON because the telcos were using GPON.
Duh!
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Duh!,
User Rank: Blogger
9/15/2016 | 12:54:23 PM
Re: New cable broadband vendor battle brewing?
The cable industry choice of EPON over GPON had some other rationales at the time.  EPON ONUs were still significantly less expensive than GPON ONTs, because the EPON standard has more relaxed optical, electrical and timing specifications than GPON. This advantage has disappeared with volume.  The tighter specs mean better performance.

Also at the time, IEEE 802.3av was wrapping up a symmetrical 10G standard.  FSAN was less far along with 10G, and was only working on asymmetrical rates.  That was mainly because nobody knew how to build 10G OLT receiver electronics that could meet the stringent timing specs that FSAN had applied to BPON and GPON.  Rather than compromising efficiency and performance, they decided to wait.  When 10G burst receivers that can meet those specs became feasible, they were able to produce XG-SPON and symmetrical NG-PON2.  The tighter specs result in much better utilization of the upstream link.

So the cable industry traded off initial cost and time-to-market for performance. The fact that they didn't have a seat at the table in FSAN certainly must have influenced the decision as well.  I think that if they were to re-evaluate, they'd come to a different conclusion.
msilbey
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msilbey,
User Rank: Blogger
9/14/2016 | 1:28:42 PM
Re: New cable broadband vendor battle brewing?
I'm also curious to see how far cable goes with EPON. It always felt like they just picked EPON because the telcos were using GPON.
Ray@LR
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[email protected],
User Rank: Blogger
9/14/2016 | 1:06:41 PM
New cable broadband vendor battle brewing?
Do I hear the sound of a charge towards cable broadband access gear capex budgets?

It'll be interesting to find out which accounts Adtran is inheriting and if those are still 'live' or up for grabs from anyone with a next gen access solution to pitch...
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