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Vecima has placed a $20 million bid for Casa Systems' cable business
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Dell'Oro analyst Jeff Heynen said Vecima can provide Casa "a renewed focus" on cable and fixed broadband
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Acquiring Casa's cable biz could help Vecima gain share in the vCMTS market
Casa Systems is treading rough waters, as it filed for Chapter 11 bankruptcy earlier this week. Now, the company’s looking to offload its cable, 5G core and RAN assets.
Vecima Networks has placed a $20 million bid for Casa’s Cable Business, but what does Vecima have to gain? Quite a bit, according to Dell’Oro analyst Jeff Heynen.
Heynen in a blog post said Casa wants to designate Vecima as “stalking horse bidder,” which means the amount Vecima bids would become the minimum amount the assets can be purchased for.
It would also give Vecima the advantage of negotiating the terms of the purchase, including which Casa assets it wants to acquire. “That alone might be enough to deter additional bids, as competitors determine whether the value of the assets is worth a higher bid,” Heynen wrote.
The chance Vecima ends up the winner is pretty likely, he told Fierce, as other companies “probably did their due diligence and determined a stalking horse bid wasn’t the right option for them.”
As for how Casa’s cable biz would fare in Vecima’s hands, Heynen said Vecima offers “a renewed focus” on cable and fixed broadband markets, a focus that kind of fell by the wayside as Casa turned its attention to its mobile core, fixed wireless CPE and virtual Broadband Network Gateway (vBNG) product lines.
“It was definitely an attempt to diversify its product portfolio, especially as cable revenue was declining after 2018,” he explained. “But that diversification also takes away from the focus it had on cable, especially from an R&D perspective.”
Vecima meanwhile is further targeting cable operators, as it unveiled in March its first virtual CMTS offering to help companies prep for DOCSIS 4.0.
Heynen noted the vCMTS market is “still in the early stages of deployments.” So far, Harmonic’s been leading the market, holding 98% of global revenue in 2023 (with a good portion of that revenue coming from Comcast).
It’s difficult to say how much share Vecima could snag in the vCMTS space. Heynen reiterated cable operators as a whole are still “very early” in the process of transitioning to vCMTS.
“The noise around Comcast’s deployment often makes it seem like most operators have already moved down this path. But they really haven’t,” he said. “Or if they have, it has been on a limited basis.”
Most distributed access architecture (DAA) deployments thus far have used existing Converged Cable Access Platforms (CCAPs) as a MAC core, Heynen added, allowing operators to deploy Remote PHY devices to take advantage of the signal quality improvements they provide.
“But Remote PHY doesn’t always mean vCMTS,” he noted, and operators need time to figure out how to deploy a vCMTS alongside Remote PHY devices.
The bottom line is, the vCMTS market is “wide open.”
Although Harmonic has a “significant lead” and a first mover advantage, Vecima will “undoubtedly win its fair share of the market,” Heynen concluded.