G.fast Chipmaker Stacks More Cash

Proving that investors are willing to place bets on the potential of G.fast, an emerging standard that will bring 1-Gig capabilities to DSL networks, ahead of widespread deployments, chipmaker Sckipio announced Monday that it has raised a $17 million “B” round.

Following the B round, led by Israel-based Petango Venture Capital, Sckipio has raised $27 million since its founding in 2012. Existing investors Gemini Israel Ventures, Genesis Partners, Amiti Ventures and Aviv Ventures also participated in Sckipio’s B round.

The investment announcement comes just days after the ITU awarded final approval to the G.fast standard, which aims to deliver aggregate (downstream plus upstream) 1 Gbps capabilities to DSL over relatively short loop lengths, enabling some telcos to compete more closely with cable’s DOCSIS 3.0 and coming DOCSIS 3.1 platforms while also deferring costly fiber-to-the-home deployments.

Sckipio, which counts Broadcom among its competitors, has already introduced G.fast chips for network and CPE equipment, and has at least ten design wins, including deals with Lantiq, VTech, XAVi and Zinwell.

On the service provider side, Sckipio will be involved in at least five lab trials with tier-1 service providers this year, a group that includes U.S.-based companies, according to Michael Weissman, Sckipio’s vice president of marketing.

“This is a worldwide opportunity. The pressure we have from service providers is overwhelming,” he said, noting that DSL service providers continue to face performance pressure from cable operators and will need a technology like G.fast to handle bandwidth-intensive services like 4K video.

Weissman won’t predict when Sckipio will achieve profitability, but said he expects the company to begin volume shipments next year, possibly by mid-2015. He said multiple-dwelling unit environments served by DSL around the world are seeing the most pressing need for G.fast.

Among major vendors, Alcatel-Lucent recently introduced a G.fast optical network terminal that will launch in the first quarter of 2015, and claims to have run about a dozen of operator trials, including tests with A1 Telekom Austria, BT and Orange.

G.fast requires a noise-cancellation technology called vectoring, which is already in use today by operators that have deployed VDSL. KPN of the Netherlands, Swisscom, BT, Belgacom, Deutsche Telekom, A1, and AT&T and CenturyLink Communications are among telcos that have implemented vectoring.

While analysts see the potential value of G.fast, they have also expressed that it’s too early to say if the technology will be adopted on a massive basis or if it will be used more surgically in areas where telcos are feeling the most competitive heat from cable operators and other broadband rivals.