The Android TV-powered pay TV set-top business is still here, and Vantiva owns a major chunk of it.

That's the essential takeaway from a boast published Tuesday by the French tech company formally known as Technicolor, and which purchased CommScope's set-top and gateway business last year. 

Vantiva said it has now sold 22 million Android TV set-tops. And based on data provided by research company Omdia, it controls 25% of the global Android TV set-top market. 

“Vantiva has been a significant partner in bringing the Android TV experience to customers around the world,’ said Shalini Govil-Pai, VP of TV for Google, which makes the Android TV operating system. “Vantiva reached an impressive milestone, and we're looking forward to continuing to bring innovation and entertainment to viewers for years to come.”

Since 2020, Vantiva said it has contributed to the development and deployment of the Google Common Broadcast Stack software platform across a wide array of customer premises equipment (CPE) and consumer electronics devices used to access video services. The Google Broadcast Stack allows service providers to integrate traditional broadcast streams and conditional access systems with over-the-top services.

“Android TV represents a profound shift for consumers and network service providers by delivering a unified, user-friendly platform with advanced features, such as voice search and content personalization, transforming TVs into smart, versatile entertainment hubs,” said Leopold Diouf, senior VP of the product division at Vantiva.

One of the biggest vendors in the telecom industry, CommScope, will sell the unit that manufactures its broadband gateways, pay TV set-tops and OTT players to France’s Vantiva, which rebranded from Technicolor last year. 

Under terms of the deal, which is expected to close in the fourth quarter, CommScope will assume a 25% stake in Vantiva after selling its “Home Networks” unit. CommScope will also get an “earnout” of up to $100 million if Vantiva can achieve a EBITDA goal of €400 million (around $420 million) over a five-year period and meet “certain other thresholds.”

You can read CommScope’s deal announcement here. 

CommScope's Home Networks unit generated $1.5 billion in revenue in the 12 months ended June 30. CommScope reported net sales of $330 million for the division in Q2, down 22% year over year, attributing the drop to “weak demand and challenging market conditions.” 

No details were offered as to how many Home Networks employees from Hickory, North Carolina-based CommScope Vantiva might be keeping around. The unit will be combined with Vantiva’s Connected Home division, which generated annual revenue of $2.09 billion through June. 

Vantiva did report its own 10% revenue dip for Connected Home through the first half of fiscal 2023. 

CommScope had been shopping its Home Networks unit since April 2021.

“Our Home Networks business is currently in a challenging environment, and by combining these two businesses we believe it provides the best opportunity for future success,” CommScope CEO Chuck Treadway said in a statement.

“Additionally, both Home Networks and Vantiva share a similar vision, and value innovation, customer service, and developing products of the highest quality,” Treadway added. 

“This planned strategic acquisition represents a unique transformative opportunity for Vantiva,” said Luis Martinez-Amago, CEO of Vantiva. “It will enable us to reinforce Vantiva’s Connected Home operations, accelerate our innovation road map and expand into new markets through additional commercial partnerships. From a financial perspective, the acquisition of Home Networks will substantially increase the scale of our business while also generating synergies, that will significantly strengthen our free cash flow generation potential.”

Chest-thumping its rank as a supplier of Android TV set-tops to the global pay TV market, Technicolor said it has now deployed 10 million devices based on Google’s operating system.

“As the number one provider of Android TV STBs in the world, Technicolor Connected Home has worked successfully to meet network service provider (NSP) deployment requirements across the globe over the past year. We have met these demands despite the production and supply chain challenges posed by the COVID-19 pandemic,” said Mounir Toutah, video product director for Technicolor Connected Home, in a statement.

Technicolor also touted data from Industry Research predicting that the Android TV set-top market will expand at a compound annual growth rate (CAGR) of 24.8% from 2021-2026. 

Most of Technicolor’s Android TV clients are in Europe, where the OS has been popular among operators for several years. But the company also distributes its boxes to Dish Network, WideOpenWest and Canada’s Cogeco, among seven North American clients. 

“Subscribers appreciate the convenience of streamlining access to video services through NSP provided set-top boxes in the home as well as the added benefit of not incurring additional costs for retail equipment. Android TV has played an important role in improving the overall user experience and level of customer satisfaction, thus reducing churn, while elevating the reach of OTT content providers,” Toutah added.  

Technicolor, one of the biggest sellers of Android TV-based set-tops to the pay TV market, has licensed a software solution from RealVNC to help its operator clients remotely service customer premises equipment (CPE) powered by the Google video OS.

Connect TV enables operator customer service reps and installation techs to remotely view and control Android TV CPE, a useful tool for cable companies who are trying to enable work-from-home environments amid the pandemic. Technicolor said its Connected Home division has shipped more Android TV set-top boxes than any other CPE manufacturer in the global “network service provider” market. 

“The ability to have a complete picture of what customers are seeing, along with real-time access to diagnostic data about customer premises equipment (CPE) deployed by NSPs into subscribers’ homes streamlines the troubleshooting process,” said Girish Naganathan, CTO for Technicolor Connected Home, in a statement.  

“It is far superior to the often frustrating process of having customer service representatives speak to customers on the telephone to resolve issues that are difficult to describe,” Naganathan added. “This will be important for NSPs that are deploying new feature-rich Android TV CPE, with its advanced UI and multiple applications. CSRs will be in a much better position to educate customers and resolve technical issues with Connect TV. It will reduce truck rolls and device returns while improving customer satisfaction.”

According to a Technicolor press rep, the partnership with RealVNC isn’t just an ordinary collaboration between two companies trading money for goods and services. It’s “strategic.”

Technicolor said it is working with Google to accelerate the development and deployment of Google Broadcast Stack software into Android TV-compatible set top boxes and consumer electronics devices.

The companies noted that as Android TV has become more popular, cable operators and other network service providers are looking for more efficient and cost-effective ways to create devices that can integrate traditional broadcast streams, conditional access pay TV signals and over-the-top services.

“Households in every region are often frustrated by the need to change inputs when switching from traditional cable and pay TV platforms to the growing number of streaming services that are delivered over the internet,” said Shalini Govil-Pai, head of Android TV at Google.

The Google Broadcast Stack enables Android TV devices that can deliver content from different sources without forcing viewers to leave the HDMI 1 input. 

For Technicolor the agreement with Google is the latest development in its Connected Home business, which aims to deliver broadband connectivity and premium entertainment experiences.

Brina Jentz, VP at the video product unit of Technicolor Connected Home said that until now, network service providers had to custom integrate conditional access capabilities into Android TV devices. 

“This has been a costly and time-consuming process that can require 18 months or more of development and testing before offerings can be brought to market,” Jentz said. “The Google Broadcast Stack makes it possible to cut the process down by 50%; it also reduces the total cost of ownership associated with deploying these hybrid devices at scale.” 

The devices Technicolor is working with Google on aim to support open architectures, playback and record functionality, electronic program juices, teletext, global broadcast standards and IPTV support for the standardized pieces.

“Our work with Technicolor on the Google Broadcast Stack allows NSPs to quickly deliver the performance and quality that subscribers expect. It improves the time-to-market for making these capabilities available, while simplifying the upgrade process. It also enables multi-sourcing, which -- in turn -- reduces the integration effort of OEMs,” said Google’s Govil-Pai.

Technicolor said its struggling set-top and gateway division rallied to a 4.9% year-over-year sales increase in the second half of 2018.

This good news came after the Paris-based technology firm experienced a 13.6% decline in sales in the first half of the year. The division was subsequently put up for sale.

For the year, connected home saw a 4.7% revenue drop to $2.52 billion.

Technicolor said its CPE business was hurt by lower video demand from clients Charter Communications and AT&T, as well as severe component shortages on deliveries.

However, the vendor claimed to be the sole supplier of DOCSIS 3.1 gateways to Comcast and its various technology syndication partners. The company also started shipping DOCSIS 3.1 equipment to Charter last year.

Technicolor has had talks in recent months with a number of potential suitors for its connected home division, including private equity firm Bain Capital. 

Technicolor has sold its WiFi management software business to AirTies for an undisclosed sum, the two technology vendors have announced.

Istanbul, Turkey-based AirTies will assume control of Wireless Doctor, Technicolor’s suite of WiFi management applications for home and business, its sales contacts, as well as the 30-person team behind the product.

AirTies and the Paris-headquartered Technicolor, one of the larger suppliers of WiFi gateways to the global operator community, will stay in business together, jointly looking for ways to develop and sell WiFi management solutions.

Related: AirTies to Debut RDK-Based Mesh WiFi Solution for Operators

Wireless Doctor is a suite of cloud-based performance management software, embedded decision logic, and apps used by service providers to support field technicians, network engineers, customer care agents, marketing personnel and data analysts to improve the in-home WiFi experience of their subscribers.

The acquisition will be used to bolster AirTies Remote Manager, a cloud-based optimization suite that provides real-time visibility and historical performance analysis to better manage consumer WiFi.

“One of the most critical issues facing service providers today is the lack of visibility and control over their subscribers' in-home WiFi experience,” said Philippe Alcaras, CEO of AirTies. “We have been tremendously impressed by Technicolor’s software, intellectual property and personnel, and look forward to strengthening our position as the leader in Smart WiFi solutions for service providers. We are also extremely excited to partner with Technicolor on ways to leverage our Smart WiFi software."

French technology vendor Technicolor SA has responded to a Reuters report that it is looking to sell all or part of itself, as it grapples with a downturn in its pay TV set-top business.

“This is an ongoing process in keeping with management's mission to deliver value for shareholders," Technicolor said in the statement. "In this regard, Technicolor stresses that any discussions are at a preliminary stage. No strategic decision or commitment has been made.”

Reuters reported that Technicolor has been talking recently to other companies and private equity firms, including Bain Capital, about sale and merger options.

Related: Technicolor, Cisco Seal the Deal

Technicolor, which has provided media services to film and TV companies for nearly a century, paid $600 million in 2015 for Cisco’s set-top business.

Consolidation of pay TV operators has challenged that business. But the recent global shortage of multi-layer ceramic capacitors (MLCCs) has further constrained profitability for Technicolor.

For its part, rival Arris consolidated its set-top holdings around the same time Technicolor bought out Cisco, paying $2.1 billion for the No. 2 set-top maker at the time, the UK’s Pace. Two weeks ago, Arris announced a deal to sell itself to CommScope.

Technicolor’s Connected Home unit, which houses its set-top manufacturing business, generated 56% of the company’s overall revenue in the first half of this year. 

As Comcast’s primary supplier of video products, Arris “could face challenges importing X1 boxes” to the MSO following yesterday’s ruling by the International Trade Commission that Comcast had violated two TiVo patents, Simon Leopold, an analyst with Raymond James, opined in a research note issued Wednesday.

The ruling, announced Tuesday (November 21), now moves to a 60-day presidential review before it takes effect, but it could prohibit Comcast from importing boxes equipped with software that is subject to the TiVo patents.

RELATED: TiVo Notches Win in ITC Patent Battle with Comcast

For its part, Comcast said it respectfully disagrees with the ITC’s decision and that it will remove the feature while it pursues an appeal. The feature, in this case, is functionality that lets video customers schedule DVR recordings remotely from mobile devices that they would watch later via the set-top box.

Two set-top makers – Arris and Technicolor -- were identified as respondents in the case. Pace was also named (Arris acquired the U.K.-based company in early 2016).

Arris and Technicolor have been asked for comment regarding the ITC ruling.

UPDATE:Arris issued this statement Wednesday: "ARRIS was again found not to have infringed on any of Rovi’s patents; however, we are nevertheless disappointed and respectfully disagree with the ITC’s determination that there was infringement by any of the parties in this matter. Going forward, we will continue to support Comcast's appeal. We believe that the inclusion of ARRIS was improper based on our existing agreements with Rovi, which was borne out by the Commission's ruling."

Arris, Leopold wrote, “could face challenges importing X1 boxes for Comcast with this ruling.”

Leopold said Arris management “expressed a lack of worry when we spoke to them about this risk, which suggests they have some insight, but citing the litigation and the fact that the issue is in the hands of their top customer, they declined to elaborate.”

Update: In the wake Comcast's statement and its temporary work-around to remedy the situation following the ITC ruling, Leopold issued a follow-up note today that "[w]e expect this to reduce overhang on ARRIS stock." 

That seems to be playing out so far, as investors don’t appear to be concerned. Arris shares were up 12 cents (0.41%) to $29.15 each in mid-day trading Wednesday.

In view of similar cases, the situation here could affect the timing of shipments, but not the long-term demand, Leopold noted.

“Comcast will buy video equipment based on its deployment plans, which are unlikely to change, so what doesn’t get ordered during a period where the product is unavailable, should likely be ordered later,” he added.

Leopold said he expects Comcast and TiVo to continue negotiations during the 60-day review period, but also outlined several options that are available to Comcast:

-To pay the license fee for the feature and keep it as is (Leopold said TiVo’s recent renewal/extension with AT&T has a Most Favored Nations clause that “likely sets a floor” on what might be acceptable).

-To implement a work-around in the code.

-To important boxes without software and install the software in the U.S. “This may buy time and shift jurisdiction, but is likely just a stalling tactic,” the analyst wrote.

-Remove the offending feature from the software code and possibly negotiate to add it back.

Metrological said Technicolor has signed on to use its browser architecture in 4K-capable hybrid cable and IP set-top boxes that will enable MVPD partners to more easily integrate over-the-top services.

Under the agreement, Technicolor is adopting Metrological’s Application Platform and Web-Platform for Embedded (WPE) for those boxes, holding that it will simplify the onboarding of premium OTT content and support a unified framework for IP-based video delivery for operators. Metrological’s app platform and WPE include an open source browser and  framework architecture with software plugins.

Technicolor, which acquired Cisco Systems’ set-top and CPE business in 2015, has not announced any operators that will take advantage of the set-up with Metrological.

Liberty Global and Comcast, which has integrated OTT services such as Netflix and YouTube on its X1 platform, are among MVPDs that have adopted Metrological’s technology.

RELATED: Comcast Starts to Test YouTube App on X1 Set-Tops

Metrological and Technicolor said they will demo the joint offering at IBC 2017, set for Sept. 15-19 in Amsterdam September 15-19. 

RELATED: Liberty Global Taps Metrological for Netflix Rollout

“Operators are making major investments in new generation STBs supporting OTT as one of their main differentiators,” Mercedes Pastor, president of Europe, Middle East and Africa (EMEA) Technicolor Connected Home, said in a statement. “This is creating demand for new, flexible and innovative solutions that engage subscribers and generate new revenue streams. By bringing open solutions to the operator community, Technicolor and Metrological are creating opportunities to literally think outside the box by opening the door for new ways to engage with subscribers, while simplifying and integrating how consumers interact with existing services.”

“We are excited that Technicolor and Metrological share a common goal to ensure that operators have the full range of options for delivering compelling content and integrated TV-experiences to their customers,” added Thijs Bijleveld, SVP of sales and marketing at Metrological. "This open, browser based, approach allows operators to integrate apps and Premium OTT content into a single viewer experience. We are proud that Technicolor is adopting our Application Platform and WPE allowing their customers to leverage modern browser based technologies.”

Comcast has tapped Arris and Technicolor as its first two suppliers for the XB6, a DOCSIS 3.1-powered, multi-gigabit advanced gateway that the MSO plans to start rolling out in the first quarter of 2017, according to multiple industry sources.

Comcast declined to name its XB6 suppliers, but confirmed that its first version of the product will employ Intel’s Corp.’s Puma 7 chipset, and that it is also designing a version that will run on silicon from Broadcom. 

Sources said the first Intel-based XB6 model is being made by Arris, and that Technicolor is working on the Broadcom-based model.

Though Comcast is sourcing those products to Arris and Technicolor (Technicolor acquired Cisco Systems's consumer premises equipment business in 2015), Comcast took the reins on the hardware design for the XB6.

Comcast is preparing to accelerate the deployment of the XB6 as it looks to expand its deployment of DOCSIS 3.1 and 1-gig residential broadband service to additional markets in 2017 and as it gets ready to unleash a new “Digital Home” offering announced at CES today that aims to smarten up and simplify the provisioning and management of customer in-home networks.

RELATED: Comcast Aims to Smarten Up, Simplify the Home Network

Compatible with DOCSIS 3.0 and newer DOCSIS 3.1 networks, the XB6 also supports MoCA 2.0, dual-band 802.11ac WiFi, ZigBee, Bluetooth LE  (low energy), as well as ports for digital voice services.  

Comcast has also hinted at a retail strategy for the XB6, which will employ a  new self-install system. 

RELATED: INTX 2016: Comcast Previews New Consumer Gear

“We are taking this to retail,” Brian Roberts, Comcast’s chairman and CEO, said of the XB6 in September at the Goldman Sachs Communacopia Conference.

Comcast’s deployment of DOCSIS 3.1 is still technically in the “advanced consumer trial” phase ahead of a broader commercial rollout of the new platform, but evidence of that early handiwork is starting to emerge.

A Comcast subscriber in Atlanta, for example, signed on for the trial and shared some details of the installation on the DSL Reports message boards. That customer, “lawguru,” confirmed that the Comcast trial is utilizing a stand-alone DOCSIS 3.1 modem from Technicolor, which was among the first vendors to achieve DOCSIS 3.1 certification from CableLabs. Technicolor announced its involvement in the Comcast D3.1 trial in Atlanta back in April.

Notably, Comcast is pairing that Technicolor device with a Netgear Nighthawk AC3200 gateway, at least for now.

But don’t expect that combination to be part of the long-term game plan.

Comcast’s Jason Livingood weighed in on those boards to note that the bundling of those two devices for D3.1 “is temporary for this phase,” as eventually the service will feature an integrated device that combines the broadband access and home networking capabilities. But he also expects vendors to make standalone D3.1 modems for retail sale.

“Full scale production is likely to be very different. So don't conclude too much on the device itself,” Livingood wrote.

Comcast previewed its D3.1-powered Gigabit Home Gateway at the 2015 INTX, and, more recently, has begun to talk up the XB6, a multi-service gigabit wireless gateway that will also support Comcast's Xfinity Home service.  

The installation details in Atlanta arrive amid Comcast’s initial D3.1 rollout, currently comprised of consumer trials Atlanta and Nashville (a Nashville customer noted this week that Comcast just made contact about setting up an installation date), with plans underway to extend access later this year to Chicago, Detroit and Miami.

During the trial phase of D3.1, Comcast is advertising a service that maxes out at 1 Gbps downstream and 35 Mbps upstream for $70 per month to customers who agree to a three-year contract, or $139.95 without it.

The D3.1 customer in Atlanta shared some speed tests results, The first one posted clocked in at 933 mbps down by 38 Mbps up, followed by a second one that delivered 957 Mbps down by 42.1 Mbps up. 

Shedding more light on the equipment makeup of Comcast’s initial foray into DOCSIS 3.1, Technicolor said its gigabit modem is involved in the MSO’s recently launched advanced consumer trial of the technology in Atlanta.

Technicolor’s TC4000 modem was among the first batch of products to obtain DOCSIS 3.1 certification from CableLabs in January. Others to achieve D3.1 certification include Askey, CastleNet, Netgear, Ubee Interactive and, most recently, Sagemcom. The initial wave of  modems to achieve D3.1 certification are based on Broadcom silicon, though models with Intel chipsets are expected to join the certified ranks soon.

Technicolor said it will provide a DOCSIS 3.1-powered, gigabit modem that Comcast will use in “some of its early deployments.” Comcast has not announced any other CPE partners for its D3.1 initiative. 

“The launch of new gigabit home Internet options further establishes Comcast as a technology leader. Technicolor worked closely with Comcast to provide consumers with the kind of connected home network device necessary to support the next generation of ultra-fast Internet speeds,” Luis Martinez-Amago, president Connected Home North America at Technicolor, said in a statement.

Word of Technicolor’s involvement comes about a month after Comcast launched the trial in Atlanta, where it’s offering a D3.1-powered service that pairs a 1 Gbps downstream with an upstream that maxes out at 35 Mbps. Comcast’s trial there is offering the service under two options -- a promotional contract price of $70 per month for 36 months and unlimited data, and a no-contract price that runs $139.95 per month.

Comcast has also announced that it will rollout residential and business-class gigabit broadband using DOCSIS 3.1 in Nashville in the front half of 2016,” and follow with launches in Chicago, Detroit and Miami in the second half of the year.

In February, Arris noted on its blog that the supplier's flagship cable access platform, the E6000 Converged Edge Router, is supporting Comcast D3.1 rollout in four of the five markets already identified by the cable operator. 

A proposed set of new set-top rules might not necessarily set the stage for a new (and much more vibrant) retail era for video devices that can support pay TV services from cable operators, telcos and satellite providers alike.

Though there’s still much work to be done, it’s crystal clear that Federal Communications Commission chairman Tom Wheeler and backers of the rules, such as Google, firmly believe that new regulations will open the retail floodgates.

On the other end, the cable industry, led by the National Cable & Telecommunications Association, claims that the market for retail video devices is doing just fi ne on its own, free of mandates and driven by an apps-based economy.

As for the retail device makers, Google, which is still trying to establish Android TV’s market presence, has been successful with the Chromecast streaming adapter. The $35 device accounted for 35% of the 42 million streaming devices shipped last year, followed by Apple TV, Roku devices and Amazon’s Fire TV products, according to Strategy Analytics.

Of that group, Roku is in trials with Time Warner Cable and Charter Communications on IP-based pay TV offerings that rely on retail streaming devices.

Comcast, meanwhile, has pushed its own leased products harder than ever — with about 40,000 X1 boxes being deployed per day at last count — as the MSO continues to accelerate the rollout of its next-generation video product, aiming to deploy it to about half of its video base by year-end.

But the new rules, if they come to pass, aren’t exactly trying to leap over the highest of bars.

By the National Cable & Telecommunications Association’s last count, the nation’s nine largest incumbent cable operators had deployed 55 million operator-supplied set-tops with CableCards, versus just 589,000 of the security modules in TiVo boxes and other devices sold at retail.

Industry observers and a CE company that’s been close to the retail set-top mix since the early CableCard days say it’s too early to know if the FCC’s new proposed rules will have a meaningful impact, given that they could change during the comment process and will require new standards. Plus, the FCC anticipates a two-year compliance window.

“This is going to take a long time to hash through — not only to set the technical standards, but to see if anything actually happens [amid] coming changes at the administration, and possible changes of the chairman and other members of the FCC,” Mike Paxton, senior analyst at SNL Kagan, said.

Assuming the rules are executed, Paxton doesn’t believe that they’ll have as big of an impact as Wheeler and others who desire a successor to the CableCard expect.

“Our feeling is this is only going to have a modest impact at most on how consumers access … and consume video,” Paxton said. “This is by no means a slam dunk … that millions of consumers in the U.S. are going to go out and do this.”

TiVo has championed the retail distribution model, but it’s had limited success in that area since the original CableCard rules took effect almost a decade ago. Of TiVo’s 6.8 million subs, 5.47 million come way of cable-operator partnerships.

“I think it’s too early to make a guess right now” with respect to the impact of the FCC’s rules, Matthew Zinn, TiVo’s senior vice president, general counsel and chief privacy officer, said. “I think things will change during the comment process.”

TiVo has plenty of questions about the rules, but it also has a goal in mind: “We are looking for something that is workable.”

By that, Zinn means a successor to the CableCard that uses standards, but doesn’t require TiVo and others to adhere to an excessive number of technical approaches.

A major challenge is for the FCC to balance MVPDs’ desire for flexibility while assembling standards with which to build a vibrant retail ecosystem that enables device portability across different pay TV operators, he said.

The FCC’s rules will aim directly at incumbent suppliers with plenty of turf to protect. The global set-top business is fragmented, with Technicolor, Arris, Huawei, Skyworth and Pace comprising 40% of the market, at the end of 2014, according to SNL Kagan (it hasn’t released 2015 market share data yet). Arris, which acquired U.K.-based Pace in January, is now the largest set-top box maker in the world and has a dominant position in the U.S., so it has the most to lose.

But it isn’t losing a lot of sleep — yet. “We’re not terribly concerned about this FCC drama,” Bob Stanzione, Arris’s chairman and CEO, said March 16 at the company’s investor day.

Should the rules establish a stronger retail market for set-tops, “it’s one we’re very well-positioned to support,” Larry Robinson, president of customer premises equipment at Arris, said, in a reference to Arris’s current retail efforts around cable modems and its previous (but brie_) experience selling set-tops at retail after buying Paul Allen’s Digeo in 2009. Paxton also said he doesn’t think Arris and other incumbents have a lot to worry about, viewing the proposed rules as “moderately negative” on their set-top box business. They could pose the potential for losing some business on the lower end of the set-top box market, Paxton said — the sub-$100 area where retail video products will generate the most success. Devices on the higher end of that range — DirecTV’s Genie and Dish Network’s Hopper 3, for example — will continue to be leased.

“I don’t think [the rules] will have a huge impact on Arris and Technicolor, but it certainly won’t have a positive impact,” Paxton said.

Technicolor’s acquisition of Cisco Systems’ consumer premises equipment unit isn’t off to the best of starts.

Brazil's competition authority, CADE, said it has fined Technicolor and Cisco Systems BRL 30 million (US $7.2 million) for “gun jumping" on the transaction prior to CADE’s approval.

Technicolor and Cisco Systems announced the closing of the $600 million transaction on November 20, 2015, in which Technicolor took over Cisco’s Connected Devices unit, which makes set-tops cable modems and gateways.  

“The integration of the Cisco Connected Devices assets is starting immediately and the strategic collaboration agreement between Technicolor and Cisco is now moving into the implementation stage,” they said in the press release, adding that the transaction “has closed in all operating geographies, with the exception of Brazil, where closing remains subject to local approvals, and Colombia where Cisco Connected Devices’ operations have been carved-out pending a decision by the antitrust authority.”

CADE referenced that PR in its gun-jumping fine announcement, holding that excerpts from the release were “considered sufficient proof of gun jumping.”

"In addition, Cade discovered the incident on their own, having been notified by the company just three days after the publication of the press release," Cade reporting commissioner for the case, Paul Burnier, said, according to an English-translated version of the Cade announcement.

CADE said another question was raised by the “carve-out” agreement referenced by the companies – “ a contractual term with the intention to isolate the effects of a global transaction in jurisdictions where the transaction has not yet been approved by antitrust authorities,” CADE explained, adding that most antitrust authorities don't accept them because they usually aren't effective and are difficult to monitor.  

Cade said Cisco and Technicolor have agreed to pay the fine. Cisco and Technicolor have been asked for comment.

Update: A Cisco spokesman responded Thursday with this comment:

"Technicolor and Cisco acted in good faith when we isolated Brazilian operations during the transaction’s close, believing we could meet all global antitrust requirements and complete the transaction in Brazil when local regulatory approval was received. Both companies proactively reported the transaction close and carve out to CADE, and cooperated fully with CADE’s related investigation.

We acknowledge CADE’s announcement yesterday and accept the terms of the settlement. Both Technicolor and Cisco respect local law, and view the terms of the settlement as an additional commitment to our operations in Brazil." 

Brazil, he added "is an important market for Cisco, and we are very committed to the market’s long-term success." 

Update: Technicolor issued this statement on Friday (Jan. 22): 

"The Brazilian market is extremely important to Technicolor.  We are committed to being a good corporate citizen in this market. Based on the absence of antitrust issues with United States, Canada, Netherlands, Ukraine and Colombia, Technicolor was confident about receiving regulatory approval from Brazilian authorities.

"The decision by Technicolor and Cisco to carve out of Brazil – in order to respect and accommodate the Brazilian regulatory authority's timelines -- was made in good faith. It was publicly announced as well as reported to CADE. Technicolor accepts the terms of the settlement, and respects Brazilian laws."

Technicolor and Cisco announced the deallastJuly, noting that it also calls for them to create a strategic partnership that will allow both companies to develop and deliver next-gen video and broadband technologies, with a specific focus on Internet of Things (IoT) solutions and services. A long-term patent cross-licensing agreement is also factored into the deal.

Prior to the closing, Technicolor tapped former Alcatel-Lucent exec Luis Martinez Amago as president of its Connected Home division for the North American market, supporting Technicolor’s business with the region’s cable operators, telcos, satellite service providers and OTT players.

Technicolor  said it has appointed Luis Martinez Amago as president of its Connected Home division for the North American market.

That division, which support cable, telecom, satellite and OTT operators in the region, will also include  the set-top and CPE division of Cisco Systems that Technicolor is in the process of acquiring for $600 million. That deal is expected to close by the end of 2015.

Martinez Amago joins Technicolor after 27 years with Alcatel-Lucent, where he served in roles including CEO of the Alcatel-Lucent Shanghai Bell joint venture, and president of its Europe, CIS, Middle East and Africa regions. As president of the Alcatel-Lucent’s Fixed Broadband Access Networks Business Division, which included IPTV and consumer premises equipment, he was responsible for major deals with US customers such as AT&T and Verizon, Technicolor said.

“Luis Martinez Amago is a highly skilled international executive with an impressive track record in key roles from Sales to General Management, in different technological areas and in several challenging markets,”  Frederic Rose, CEO of Technicolor, said in a statement. “Luis will be tasked with growing our Connected Home market position in NA and his decades of valuable experience in CPE and network will serve him well in his exciting new role.”

Martinez Amago holds a technical degree in telecommunications engineering from the University La Salle, Barcelona.