Huawei Sniffing at Set-Top Strategy
Industry insiders say Huawei is testing the temperature of the U.S. cable set-top market, checking the needs of both large and small cable operators. Although no deals appear imminent, the vendor, says one MSO exec, has been doing plenty of “chest-thumping” recently about the types of set-top products it could bring to the table and how it could siphon away some of the costs required to produce them.
Although nothing’s stopping Huawei from building advanced set-tops based on the tru2way platform, it’s believed that the company is initially focused on developing lower-end set-tops, including digital terminal adapters (DTAs), simple one-way devices that Comcast Corp. (Nasdaq: CMCSA, CMCSK) and other MSOs are using in tandem with analog spectrum reclamation strategies. (See Comporium Tests Positive for DTAs, Cable ONE Seeks Hi-Def DTA Waiver , Comcast IDs First DTA Market, and Comcast Seeds Digital Shift With Free Boxes.)
Industry sources say Huawei has also held discussions with Beyond Broadband Technology LLC (BBT) , a cable operator consortium that is developing an “open” downloadable conditional access system for small- and mid-sized MSOs. But those talks are believed to be on hold for now. (See BBT Loads Up for First Field Test , BBT: Tru2way? No Problem , and BBT: Tru2way? No Problem .)
BBT CEO William Bauer declined to discuss talks with the China-based vendor, but said the consortium has four box makers already on board. R.L. Drake LLC is the lone announced set-top partner for BBT. Bauer says two of the other unannounced partners are “well along” in their design for the BBT system, while another remains in the early stages of development.
As for the DTA market, Huawei may be showing up to that party a bit late.
Evolution Broadband LLC is already going after small- and mid-sized MSOs with a DTA that feeds into its turn-key digital platform. (See Evolution Thinks Small .) Comcast, meanwhile, has picked Motorola Inc. (NYSE: MOT), Pace Micro Technology , and Thomson S.A. (NYSE: TMS; Euronext Paris: 18453) as its primary suppliers for the devices. However, the MSO has suggested it will need as many as 25 million DTAs to complete the job over the next 12 to 18 months. Also, back when Comcast’s plan around the DTA started coming to light, it was suggested the MSO could look to an off-shore manufacturer to help produce them. (See Comcast Pursuing $35 Digital Dongle.)
But what does Huawei say about all this? Not a lot. "We don’t comment on rumor or speculation," a Huawei spokeswoman said in an emailed response. [Ed. note: They declined to comment on our news, as well.]
But it is no secret that Huawei wants in. In August, it hired Christopher Skarica as chief technology officer of Huawei’s North American cable MSO team. (See Say Wah Way and Huawei Names Cable CTO.)
It already has its foot in the door at Suddenlink Communications , which is using Huawei gear for a fiber network buildout in Texas. Cox Communications Inc. , meanwhile, has not announced suppliers for its ambitious wireless network rollout, but sources indicate that Huawei is supplying the MSO with CDMA equipment. (See Cox Wireless: Soup to Nuts and Cox Preps Cellular Network, Eyes LTE.)
Although Huawei’s cost-reduction magic might draw attention, it has had some trouble adjusting to the culture of the U.S. cable market. “They definitely want to get into the U.S. market in a big way, but they will need to understand the U.S. market,” to have success there, says a cable exec.
— Jeff Baumgartner, Site Editor, Cable Digital News