BigBand Networks on Tuesday disclosed that it has been selected by Comcast to provide switched digital video management software, news that came amid the vendor’s announcement that it will lay off 15% of its work force and discontinue its cable modem termination system platform.
Comcast has selected BigBand’s switched digital video manager, the software that manages the communication between the set-top box and makes the decision about which channels to deliver, BigBand president and CEO Amir Bassan-Eskenazi said in an interview.
In addition, Bassan-Eskenazi said, BigBand in the third quarter received commercial orders for SDV systems from two other cable operators, which he declined to name. BigBand’s announced SDV customers include Cablevision, Time Warner Cable and Cox Communications. All three “are now in the process of doing commercial deployments of our system,” Bassan-Eskenazi said.
Comcast has also specified Motorola as an SDV supplier, as well as Arris and Harmonic for edge quadrature amplitude modulation devices.
ThinkEquity Partners analyst Anton Wahlman, in a research note, said he was “skeptical” that the Comcast deal will translate into “material revenue in 2008, if ever” for BigBand.
“We would need to see more evidence about the probability of such a broad-based rollout before getting more positive” on BigBand, Wahlman wrote.
For the quarter ended Sept. 30, BigBand reported revenues of $38.5 million, 10% lower than the year-ago period, with a net loss of $12.2 million compared with a net profit of $1.6 million in the third quarter 2006.
BigBand last month issued a warning that its third-quarter revenues would be off by as much as 40% from previous expectations. The company blamed the shortfall partly on SDV deployments that have required “more software customization and integration than originally expected,” which prevented it from recognizing revenue from some customers in the third quarter.
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