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Optical/IP

Revamped Amedia Aims for Access

Can a New Jersey-based company with loads of old Lucent Technologies Inc. (NYSE: LU) brass be the next hot access play?

Well, that's the idea behind Amedia Networks Inc. (OTC: AANI). The company believes its experienced managers and its technology licenses from Bell Labs give it an entrée to the broadband access space with a little panache.

Amedia says it is “in production” with an Ethernet broadband aggregation switch and a home gateway device that, together, can deliver as much as 100 Mbit/s of bandwidth per fiber-connected household (see Carrier Ethernet Makes Its Move).

The company's business case is built on the idea that the mounting arms race among cable, satellite, and phone companies is really all about high-definition video and that delivering 20 Mbit/s to the household simply isn’t enough.

You know the drill: As HDTV becomes more mainstream, many households will want to run as many as three HD channels at once, and each one will need 20 Mbit/s of bandwidth, or so says Amedia VP of marketing Gary Feldman. On top of that you have other applications like VOIP, Internet access, and gaming.

Interestingly, Amedia's no spring chicken. The firm started in 1994 and went public in 1997. It made an ill-fated run at the music encryption software business (under the name TTR Technologies) from 1994 until 2003. TTR sold off its intellectual property and materials in 2003, took a break for some months, then reemerged in the broadband access equipment business in 2004. In total, the company has incurred net losses of $52.7 million since inception, but it has recently raised nearly $8 million to fund its dive into broadband access.

TTR's name was changed to Amedia in 2004. The company brought in several new officers, mostly from Lucent, then contracted with Lucent’s Bell Labs to build its Ethernet-based home gateway and aggregation switch products. Amedia paid Lucent almost $2.9 million for its services and now licenses the patents.

Amedia's CEO Frank Galuppo had a long career at Lucent, including a stint as president of the company’s optical networking group. “I knew of the tech while I was still at Lucent and I thought it was interesting,” Galuppo says. “Fiber-to-the-prem was getting closer to a reality, and then Verizon announced its fiber-to-the-node initiative.”

Amedia’s products directly compete with World Wide Packets Inc. and Allied Telesyn International Inc.. Other competitors include Wave7 Optics Inc., PacketFront AB, and Optical Solutions Inc.. Motorola Inc. (NYSE: MOT), UTStarcom Inc. (Nasdaq: UTSI), and Alcatel (NYSE: ALA; Paris: CGEP:PA) also sell fiber access gear, but using different approaches (see Optical Solutions GPONs Ga, Wave7 Wins at Wabash and Alloptic Allotted $30M More).

Galuppo believes many service providers today are still trying to leverage their old ATM networks to deliver new high-value services like IPTV. But he says that will likely change. “The next step is that the telcos will do a shift toward Ethernet in 2006.”

Galuppo says Amedia will focus its marketing efforts on the United States, China, South Korea, and Brazil. The company hopes to begin booking significant revenues in the second half of this year.

The company recently announced its first customer win, at Tai Long Communication in China. The deal is valued at $9 million over two years. Tai Long, a startup itself, serves about 50,000 subscribers.

Galuppo says the company has grown from around 10 employees in 2004 to roughly 30 today. Not an army, by any means. But definitely enough to help telcos wage war on the cable guys. “The cable companies are adding voice and the service providers are going to have to counter that, so they seem to be moving toward IPTV," says Galuppo (see Comcast Reports Q2 Profit).

— Mark Sullivan, Reporter, Light Reading

YCH 12/5/2012 | 3:02:51 AM
re: Revamped Amedia Aims for Access Surprised to see a positive article about Amedia...The only win they have is with a small Chinese service provider that they had to fight tooth and nail to win...

From what I have heard they have struggled in Tailong's labs to produce a solution that can provide simple voice and although the contract is for 9 million there are several gates that Amedia needs to pass to see that revenue and from what I hear they keep falling further behind those gates...

Anybody want to confirm or deny?
Stevery 12/5/2012 | 3:03:36 AM
re: Revamped Amedia Aims for Access
amoral = without morals
atheist = without theism
Amedia = without media

Huh?
DCITDave 12/5/2012 | 3:03:36 AM
re: Revamped Amedia Aims for Access That's pretty good.
I think Covergence is right up there as well.

We'll dust off the bad names list soon.

ph
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