Vendor wants to accelerate its virtual cable modem termination system (vCMTS) market competition with market-leader Harmonic
Canada-based Vecima Networks announced it has entered into an asset purchase agreement to acquire the cable business assets of Casa Systems and certain of Casa’s subsidiaries for $20m. Casa filed for Chapter 11 bankruptcy protection and is seeking approval of Vecima as a “stalking horse” bidder for the Cable Business assets under Section 363 of the Bankruptcy Code. The stalking horse bid sets the low end so that any additional bidders can’t underbid the purchase price.
Earlier this year Vecima, which has several European cable operators as customers entered the emerging virtual cable modem termination system (vCMTS) market with a new platform that will support DOCSIS 4.0 as well as giving DOCSIS 3.1 cablecos a speed boost. The platform is also designed to support PON deployments off the node, which are enabled via remote optical line terminals (OLTs).
If Vecima is successful in acquiring the cable parts of Casa, closing of the transaction is expected to occur at the beginning of June 2024. The company will then be better placed to compete with vCMTS market leader Harmonic which already counts the likes of Vodafone, Comcast and Rogers Communications. CommScope is the other vCMTS competitor but all are dwarfed by Harmonics current market presence.
Market development
Dell’Oro Group analyst Jeff Heynen said that assuming Vecima’s bid is successful, it will have acquired assets that in 2023 generated revenue of $41m, primarily coming from licence revenue from its installed base of C100G CCAP platforms.
“Casa’s cable products are well-regarded in the industry for their architecture and reliability. We regularly hear from cable operators that the C100G platform continues to serve as the core of their broadband offering,” he wrote in a blog. “What Vecima offers to the Casa cable unit is a renewed focus on the cable and fixed broadband markets, which was arguably missing at Casa as the company tried to balance R&D investments in its cable, vBNG, mobile core, and fixed wireless access product lines.”
He added: “With the focus and continued support by Vecima of Casa’s existing customer base, Vecima can potentially turn those customers into longer-term DAA customers.”
Heynen said Vecima will gain Casa’s Axyom vCMTS software, which it can use alongside its own Entra vCMTS platform to scale overall vCMTS deployments as they continue to expand at cable operators around the world. “Additionally, we are aware of deployments where Vecima’s RPDs have been deployed along with Casa’s vCMTS, so demonstrating interoperability at other operators shouldn’t be a challenge,” he said.
“Ultimately, we would expect the Axyom and Entra vCMTS platforms to be integrated into a single software stack to avoid parallel development efforts that could sidetrack operator deployments,” he added.
Comcast-led revenue for Harmonic
Although Harmonic currently dominates the vCMTS market, holding 98% of global revenue in 2023, a good portion of that revenue comes from Comcast, which was the early mover in deploying vCMTS platforms in the industry.
The analyst points out the market is nascent and there are dozens of cable operators which have yet to begin their transition to vCMTS. “There are many more who are facing the discontinuation of Cisco’s CBR-8 platform, which will not be upgraded to support DOCSIS 4.0, thus pushing operators to transition to a vCMTS platform,” he said.
Vecima’s acquisition would include Casa’s Axyom vBNG platform, which could provide subscriber management and routing functions for Vecima’s SF-4X Remote OLT and EXS1610 OLT—particularly in those cases where operators are deploying XGS-PON, according to Heynen.
“Though Vecima has demonstrated interoperability with existing, hardware-based BNGs, as well as third-party vBNGs, being able to supply both the OLT and vBNG delivers an architecture and vendor relationship similar to the vCMTS and RPD combination that cable operators have become familiar with,” he said.