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Optical/IP

Ericsson Mines Copper Mountain

Copper Mountain Networks Inc. (Nasdaq: CMTN) and LM Ericsson (Nasdaq: ERICY) have announced a multiyear OEM agreement where Ericsson will resell and integrate Copper Mountain’s VantEdge central office broadband remote access server (B-RAS) with its IP service software. The two vendors say they’re aiming their products at large service providers in North America.

Copper Mountain shares jumped on the news, climbing $0.94 (9.78%) to $10.55 in trading on Tuesday. The company’s stock has shot up about 68 percent in the past year.

That Ericsson, an Ethernet DSLAM supplier, is interested in a central office B-RAS is not surprising. Before North American incumbent carriers look to deploy Ethernet-based DSLAMs, they’ll try to provide IP services over their standing ATM infrastructures (see New DSL Network Architectures).

Carriers of all sorts are striving to offer data services more sophisticated than best-effort broadband Internet access. This calls for B-RASs, which serve as gatekeepers for all traffic between the subscribers and the service provider networks.

“When [carriers] move into multiple services, they need to be able to separate the services from one another and provide quality-of-service capabilities, too,” explains Peter Linder, Ericsson's technical director of product area wireline networks.

Why Copper Mountain?

Let’s start with the obvious: They’re still alive. The early players in the B-RAS market didn’t fare well. Gotham Networks folded in June 2002; Lucent Technologies Inc. (NYSE: LU) discontinued the SpringTide product in October 2002; Celox Networks suspended operations in December 2002; and Corona Networks closed in August 2003.

Also, Ericsson needed a more complete B-RAS offering to appease the different types of carriers it sells to. It already is a reseller of Juniper Networks Inc.’s (Nasdaq: JNPR) ERX products, which competes with Copper Mountain’s gear.

Of late, the B-RAS market has become more fragmented. Metro B-RASs, such as the Juniper ERX 1440, sit deep inside networks and serve huge numbers of subscribers. Central office B-RASs, such as Copper Mountain’s VantEdge and Juniper’s E-Series, sit –- guess where? -- in carrier central offices (see Upstream of the DSLAM).

Linder says Juniper’s B-RAS gear is most appropriate for centralized carrier access networks that make use of Gigabit Ethernet uplinks, such as those found in Europe and Asia (see Europeans Tug on Next-Gen B-RASs ). He says Copper Mountain’s solution is better for distributed architectures with ATM uplinks, such as those found in North America.

He also says the technical reports published by the DSL Forum factored into Ericsson’s decision to work with Copper Mountain. Those reports, especially Technical Report 059 (TR-059), outline ways for carriers to update their DSL infrastructures to handle more broadband subscribers, create and charge for differentiated services, and to migrate from ATM to IP backbones (see DSL Forum Tackles Premium Services).

Neither company would comment on the financial particulars of the deal.

— Phil Harvey, News Editor, Light Reading


Archives of Related Light Reading Webinars:

steviescmr 12/5/2012 | 2:14:14 AM
re: Ericsson Mines Copper Mountain i know i'm nitpicking, but just so y'all know -- gotham wasn't an "early bras vendor"

the author also says that the "e-series" sits in the CO. i think he meant the e-310. the rest of the e-series is definitely not a good fit for the CO.

c'mon now.

Steve Vie
rbkoontz 12/5/2012 | 2:14:13 AM
re: Ericsson Mines Copper Mountain I can't think of two companies that deserve each other more! Actually, I take that back...

Dealing with Ericsson is a bad dream I actually I would not wish upon my most hated enemies! The Swedes have zero traction in the US market so I guess this is about Europe and Asia where Ericsoon sell so much DSL??? NO, maybe every time they sell a new wireless base station they'll ask "Would you like that plain or with a BRAS?"

In truth, I heard CMTN made a list of the 12 worldwide partners they would like to "work with". Problem is everyone else declined and Ericsson was lucky #13.
technonerd 12/5/2012 | 2:13:25 AM
re: Ericsson Mines Copper Mountain I looked up Copper Mountain at the SEC website.

- Sales were $281 million in 2000 and $14 million in 2003.

- They have $19 million in net cash and burned $17 million last year.

Ericsson wants to buy them, huh? Hey Swedes: Wait. It will get cheaper.
russ4br 12/5/2012 | 2:13:21 AM
re: Ericsson Mines Copper Mountain Ericsson should partner with Laurel instead. Laurel has a good Edge Router and is working on adding BRAS code as well.

As for making hasty decisions, Ericsson actually had a BRAS box, which they killed in 2002.

- russ
di 12/5/2012 | 2:12:43 AM
re: Ericsson Mines Copper Mountain
Ericsson bought gigabit router vendor torrent
networking in 1999 for $400+M. Then they
decided to OEM Juniper's M series instead.

The torrent box was directed to become a high
end ggsn. A little later, Ericsson partnered
with Juniper to co-build a GGSN based on the
M series.

Two groups within the company tried to build a
BRAS. One got whacked almost instantly for
political reasons, and the other almost got
a release out the door. But Ericsson decided
to resell Unisphere's ERX. This was 2002.

This company certainly has confidence in its
internal IP development. Anyone out there
building telephone switches? Ericsson may be
interested!

(-;
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