Semtech Corp., a semiconductor company tied to Comcast’s business-focused IoT activities, said it has accelerated the vesting of the remaining unvested shares from a warrant originally issued in 2016 as Comcast’s machineQ subsidiary prioritizes coverage in its current mix of deployment areas before expanding to more markets.

Semtech said the remaining 586,956 unvested shares have been vested. The warrant is now fully-vested and exercisable for a total of 869,565 shares.

The original 2016 agreement provided a warrant for Comcast to acquire up to $30 million of Semtech common stock, to help facilitate an anticipated network expansion in up to 30 U.S. cities within a period of 30 months following initial trials in Philadelphia and San Francisco.

As a result of today’s announcement, Semtech said it expects to record an expense related to the warrant of $21.5 million, including $15.9 million related to the acceleration, which will be reflected as a reduction to GAAP net sales in the company’s fiscal Q1 quarter. Semtech said it will discuss this in more detail on its scheduled May 30 earnings call.

Comcast has similar warrants agreements with other key suppliers, including Arris, Harmonic and Universal Electronics.

machineQ, Comcast’s enterprise IoT company, is using Semtech’s LoRA devices and wireless RF technology for rollouts underway in several markets, including Philadelphia, the San Francisco Bay Area, Chicago, Atlanta, Baltimore, Boston, Denver, Detroit, Indianapolis, Miami, Minneapolis, Oakland, Pittsburgh, Seattle, and Washington D.C.

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“As its deployment has matured, Comcast has shifted deployment efforts to better target high-value strategic markets by providing extensive coverage within these markets before expanding regional coverage to new markets,” Semtech said in a release.

Semtech said the change in priorities will be of interest to both companies, but were not anticipated in the original terms of the warrant.

“We are pleased with the speed and extensiveness by which Comcast has executed the deployment of Semtech’s LoRa technology to enable its machine platform,” Semtech president and CEO Mohan Maheswaran, said in a statement. “Comcast’s efforts in the deployment of LoRaWAN networks in various U.S. markets is further helping to establish the LoRaWAN protocol as the de facto standard for LPWAN deployments.” 

Comcast has launched machineQ, a “business trial venture” focused on developing an Internet of Things (IoT) platform for enterprise customers.

Comcast, which will employ Semtech’s LoRA Wireless Radio  Frequency Technology for the machineQ venture, said it will work with select commercial partners on proof of concepts that enable them to tap into the operator’s network to gather, transmit, and analyze data from connected devices distributed throughout their organizations. Comcast said its network now spans more than 149,000 route miles of fiber optic cable and more than 500,000 miles of HFC plant.

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Comcast said initial network trials will take place later this year in Philadelphia and San Francisco, with a focus on use cases such as utility metering, environmental monitoring (temperature, pollution, noise), and asset tracking via  LoRa Technology-enabled devices and network services.

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If the initial trials are successful, Comcast plans to commercially deploy LoRaWAN networks and LoRa-related services across its markets, with the goal of completing commercial deployments within the next 18 to 30 months.

Comcast sees IoT as a huge business opportunity, citing a study from Machina Research that sees the total number of global machine-to-machine connections growing from 6 billion in 2015 to 27 billion in 2025, and  a global market that will generate $3 trillion in revenue by 2025 (22%, or $660 billion, originating in the U.S.).

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"We believe the business-to-business segment of the Internet of Things market is going to expand rapidly over the next decade as businesses look to IoT-based technology to manage their businesses in a more effective and sophisticated manner," Sam Schwartz, Comcast Cable’s chief business development officer, said in a statement. "Technologies such as LoRa are setting the stage for the era of connected devices, and we think our network potentially has a role to play in connecting the millions of internet-enabled devices deployed within enterprises.”

 “The decision by Comcast to complement its existing infrastructure with LoRa Technology will enable connected devices, servers and software components to communicate seamlessly and securely on its new LoRaWAN™-based IoT platform,” said Mohan Maheswaran, Semtech’s President and Chief Executive Officer. “Semtech is committed to working with Comcast to make LPWAN networks broadly available in the United States. We believe this will foster innovation by enterprises for new IoT solutions that allows us all to benefit from the advantages of our emerging connected world.”