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ECI is believed to be looking for a buyer for its DSLAM business, but it’s far from deserting the fixed access market

February 28, 2008

2 Min Read
ECI Puts DSLAM Biz on the Block

PARIS -- FTTH Council Europe -- ECI Telecom Ltd. is believed to be looking for a buyer for its DSLAM business, according to a number of access equipment vendors here in Paris.

Several executives from access equipment companies, who requested anonymity, have been contacted by an investment banking firm, asking them if there is any interest in acquiring ECI’s DSLAM portfolio, which is used by Deutsche Telekom AG (NYSE: DT), Orange (NYSE: FTE), and Chunghwa Telecom Co. Ltd. (NYSE: CHT) (See ECI Drops Despite VDSL2 Coup and ECI Makes Hay in Taiwan, Europe.)

Despite such high-profile customers -- both France Telecom and Deutsche Telekom deployed ECI DSL equipment to help launch their IPTV services -- the company has struggled to diversify its customer base in the face of fierce competition from the likes of Alcatel-Lucent (NYSE: ALU) and Huawei Technologies Co. Ltd.

It has also tried expanding through strategic partnerships, but those relationships have made little impact. (See Moto to Resell ECI DSLAMs and ECI: Nortel Didn't Deliver.)

It’s not known what sort of price ECI is looking for.

But there’s little appetite here for an acquisition that includes DSL-only equipment. “Why would anyone buy that?” says one executive. “I can’t imagine they’ll have much interest.”

ECI, which went private last year in a $1.2 billion buyout, declined to comment. (See ECI Bought Out in $1.2B Deal and ECI Shareholders Approve Buyout.)

The move doesn’t mean ECI is abandoning the fixed access market -- far from it. The company is pushing hard with its multiservice access node (MSAN) platforms that enable GPON and DSL access, and is here in Paris showing off its fiber-to-the-home (FTTH) capabilities, unveiling new fiber-to-the-building platforms (8-port and 48-port units for deployment at multi-dwelling units) and announcing new GPON customers in France and Norway. (See ECI Wires Nancy and Fibra Uses ECI For GPON.)

Ron Levin, VP of product marketing at ECI’s network solutions division, says the company even has a GPON engagement with a major European incumbent -- “one of the top five.”

He also notes that, while ECI is currently focused on GPON as a FTTH technology, demand in Europe for point-to-point Ethernet access technology could tempt ECI to develop a product for that market too.

— Ray Le Maistre, International News Editor, Light Reading

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