Terayon sees DOCSIS 2.0 keying big year in 2003

Being the only company with a DOCSIS 2.0-qualified cable modem termination system [CMTS] is going to mean big business for Terayon Communication Systems in 2003, CEO Zaki Rakib said this morning at the Fifth Annual Needham Growth Conference in New York City.

“Any time an MSO is going to be looking at investing in a CMTS, they will be looking at the latest standard,” he said. “We’re the only … CMTS that has the 2.0 qualification.”

Rakib estimated Terayon’s advantage to be somewhere between nine months and a year until other vendors get their DOCSIS 2.0 products on line. “It’s a non-trivial technology to implement on the CMTS side. It’s a significant advantage that will translate next year into a substantial increase in our market share in CMTS,” he said.

DOCSIS 2.0, the latest iteration of cable’s high-speed data connectivity specifications, allows cable operators to deliver symmetrical bandwidth speeds up to 30 megabits per second [M/ps] and opens a new realm of service possibilities, including telephony, where cable is pursuing a PacketCable voice-over-IP initiative.

While Rakib agreed with industry estimates that VoIP will not happen on a large scale until 2004, he pointed out that 2003 will be a year for laying groundwork--especially by industry giant Comcast, a leading VoIP proponent.

“Clearly all the infrastructure will be put in place to enable telephony,” Rakib said.

Comcast, he said, will buy telephony-ready CMTS units; modems that can be upgraded to VoIP via sidecar-like devices “continuing to do the work throughout 2003 in getting ready for a massive deployment later on.”

Terayon, he said, is banking on its CMTS lead as part of an end-to-end strategy, because other vendors have received DOCSIS 2.0 cable modem certification. Terayon’s long-held belief in its synchronous code division multiple access [S-CDMA] technology will pay off in 2003, he added

“DOCSIS 2.0 is going to be our most important element in our arsenal in 2003, the enabler for symmetric services,” he said. “We’re the only company today who has end-to-end DOCSIS 2.0 equipment, not just ready, but certified and qualified.”

While the opportunity is enormous, Rakib also admitted that market conditions are tough and that he is “waiting to get more visibility into the MSO spending” on network equipment.

“The final questions from MSOs will not be clear until some time in February,” he said. “I think that’s when I’ll be more comfortable about talking about when we return to profitability.”