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Jim Barthold
Having successfully toured 1998, Terayon Communications Systems Inc. is ready to put the pedal to the metal in 1999.
"By any measure, Terayon had an outstanding year (with) revenue growth, increased consumer base, product cost reduction and acceptance of our technology in the industry standards," said CEO Zaki Rakib, while announcing fourth quarter results.
Rakib said that the cable modem vendor expects to accelerate its success this year and kick into overdrive in 2000. Rakib pointed to Terayon's selection, along with Broadcom Corp., to co-author advanced Data Over Cable Service Interface Specifications (DOCSIS) 1.2 standards for CableLabs as an indicator of the company's course.
"As a result of the selection of S-CDMA (Synchronous Code Division Multiple Access) into DOCSIS 1.2 we have started looking at the sales channels from a slightly different perspective ... where we're looking at three different channels for sales," Rakib explained.
Those three are direct modem sales to cable operators for subscriber lease; sales to operators for retail distribution; and direct sales via either original equipment manufacturer (OEM) agreements with computer makers or through retailers.
Rakib said Terayon shipped 28,700 modems and 158 headends in the fourth quarter, bringing 1998 results to 62,800 modems and 459 headends. North American sales accounted for about 67% of its sales, which were all proprietary products.
Terayon is on an internal computer modem that will help ease consumer modem installations. Presently, Rakib said, about 80% of TCA Cable Inc.'s customer base self-installs external Terayon modems.
"This significantly reduces cable operators' truck rolls and installation costs," he pointed out.
Rakib said S-CDMA encourages self-installation.
"Because of the forgiveness of the modem and the technology, there is no need for an RF technician to go and do the work and measure the RF losses and make sure that the splitter is high quality and the coaxial cable is high quality," he explained.
Retail, he predicted, will start late in 1999 and take off in 2000. Terayon and Broadcom have submitted their first DOCSIS 1.2 specifications and expect first approval in March or April.
"I don't expect the certification process of 1.2 to take as long as it took for DOCSIS 1.0 or 1.1 (because) all the problems of 1.0 or 1.1 will be behind us and 1.2 is not going to be introducing too many complications in the certification process," he said.
Standards are imperative for Terayon to grow its base, Rakib admitted.
"We don't build or ship any DOCSIS 1.0 or 1.1. Our intersection with DOCSIS is at DOCSIS 1.2," he pointed out.
Once it hits this intersection, Terayon can expand its market presence, he said, by being compatible with any vendor's headend.
"If the headend is upgraded to 1.2 then the modem can operate in a 1.2 mode (compatible with) both 1.0 and 1.1, which is giving us a tremendous opportunity to be able to sell those modems in areas where we did not have any headend deployment," he explained.
ALSO: Canal+ selected C-Cube Microsystems Inc.'s digital video set-top box solutions as the core engines for its multimedia platform ... Renaissance Media Group LLC will upgrade its Tennessee and Louisiana systems with two-way 860 MHz gallium arsenide (GaAs) transmission networks technology from General Instrument Corp.; Turner Broadcasting Inc. will use GI's DigiCipher II system to convert Turner Classic Movies from analog to digital; and United Pan-Europe Communications N.V. will use GI's DVB-compliant digital set-tops throughout Europe ... Adelphia Communications Corp. chose Cabeltron Systems Inc.'s technology to improve network performance and the delivery of Internet Protocol (IP)-based traffic for television programming, Internet access and telephone calls.
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