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VoIP Systems

Cedar Point Cuts Staff as Slowdown Bites

VoIP equipment vendor Cedar Point Communications Inc. laid off 28 staff, about 15 percent of its workforce, earlier this month as the rate of demand for new cable voice services continues to decelerate, company officials confirmed to Cable Digital News. (See TWC CEO: Cable Sub Growth Still Slowing and Comcast Sub Growth Weakens in Q4 .)

Cedar Point vice president of marketing Jeff Walker called it a "pro-active move… to ensure that the company [is] financially healthy through this year," and to set up the VoIP gear specialist for a stronger 2010.

The latest layoffs follow a similar cutback last year, when Cedar Point attempted to balance costs with a new partnership strategy centered on the vendor's flagship product, the Safari C3, a platform that combines multiple VoIP network elements, including the softswitch and media gateway. (See Cedar Point Dials Back .)

Now, though, a combination of slower organic VoIP subscription growth from MSOs and a tough economy is affecting vendors large and small.

Cedar Point, a specialist vendor with about 150 staff (post layoffs), acknowledges that it's taking longer to drive up line counts and to get new revenues in the door. Cedar Point has shipped in excess of 5 million lines with customers such as Comcast Corp. (Nasdaq: CMCSA, CMCSK), Charter Communications Inc. , and Bresnan Communications LLC .

So what does the future hold now for Cedar Point? The company has been the subject of acquisition rumors in recent years, with Motorola Inc. (NYSE: MOT), a long-time Cedar Point partner, considered to be the most likely suitor. Although that chatter has long since died down, Cedar Point would "certainly evaluate all opportunities," Walker says, when asked the status of the vendor's acquisition prospects.

The vendor remains confident it can survive and grow as an independent operation in the long-term, but where are the growth opportunities now that most larger operators have deployed VoIP widely and are well beyond the rapid signup phase?

Walker is hopeful that Cedar Point will attract some new business as cable operators migrate their networks toward PacketCable 2.0, a CableLabs specification that incorporates elements of the IP Multimedia Subsystem (IMS) and enables operators to deliver services across wired and wireless platforms. (See The Slow Road to PacketCable 2.0 and PacketCable 2.0 Adds Business Hooks .)

As part of that, the vendor is pursuing a "cap and grow" strategy in which operators look to deploy Cedar Point gear once voice systems from rival suppliers run their course or don't provide a strong migration path to PacketCable 2.0. In fact, Cedar Point announced a formal "replacement program" earlier this week. (See Cedar Point Tees Up Replacement Program.)

The vendor is also hoping that the move by some MSOs to deliver voice services to small- and mid-sized operators via the existing Docsis cable plant will generate new business opportunities.

And there are still some new deployments to be had, particularly outside the U.S., and even outside the cable arena. Belgium's 3StarsNet, for example, will shed its existing TDM-based switching gear in favor of the Safari C3, and use the Cedar Point platform to deliver SIP-based VoIP services. 3StarsNet, which manages about 400,000 voice lines, marks Cedar Point's first telecom customer in Europe.

— Jeff Baumgartner, Site Editor, Cable Digital News

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