C-Cor.net sees hope in services group

(Telephony) Even as C-Cor.net used today's third quarter earnings call to reaffirm its stale cable TV transmission business, the company attempted to squeeze hope from the positive results announced yesterday by one of its biggest customers, AOL Time Warner.

AOL Time Warner said it added 400,000 digital cable subscribers and 237,000 high-speed data subscribers during the quarter. At the same time, it continued to test open access high-speed data services with multiple vendors in Columbus, Ohio, and continued with plans to launch that service later this year.

That subscriber growth, though, does not necessarily mean big things ahead for C-Cor.net, cautioned chairman/CEO David Woodle. He noted that AOL Time Warner has completed about 95% of the building it needs to handle those new subscribers.

"Bottom line is people are buying the new services and the concept of building it, rolling it out, is paying off," he said. "They have all the things in place to trot out additional capacity very quickly."

C-Cor.net's silver lining, he added, lies in servicing those subscribers and helping the service providers get them.

"We monitor all the set-tops or monitor all the modems to get status of the system," he explained. "They're going to need to have it when they roll out multiple ISPs."

This is why C-Cor.net last month acquired MobileForce Technologies—a privately held corporation that develops and markets workforce management applications and wireless mobile computing solutions—at the same time it was cutting staff and closing U.S. manufacturing facilities in Pennsylvania and Georgia. Those cutbacks are proceeding, Woodle reported.

"With MobileForce we basically help facilitate all the vehicles rolling out to the installs and put those in the homes and help automate that whole process," he said. "Our investment has been in our new services and it's a good way for us to capture that part of the revenue stream, because we don't make set-tops, we don't make modems."

The transmission business, he emphasized, won't go away and will continue to be about 50% of C-Cor.net's total business. AT&T Broadband, another major customer, is expected to resume ordering products this year and AOL Time Warner will continue to need products to upgrade its networks and meet subscriber demand, Woodle said.

"They'll [AOL Time Warner] have to add some capacity," he explained. "They've built their network very intelligently to do that incrementally. All of our amplifiers will be upgraded in the field with a lid and we can add additional transmitters or receivers in the headend or the hub to light up the additional fiber."