- Charter’s Cox acquisition could spark vendor consolidation, said Dell’Oro’s Jeff Heynen
- Both operators have vendor relationships with Harmonic and Vecima
- The merger makes sense because both are pursuing extended spectrum (ESD) DOCSIS 4.0, Heynen said
Telecom consolidation shows no signs of slowing with Charter’s $34.5 billion Cox acquisition. The deal illuminates a similar path for broadband equipment vendors, according to Dell’Oro Group VP Jeff Heynen.
“Historically, operator consolidation of this size has typically resulted in some vendor consolidation as well,” he told Fierce. “I fully expect we will see that activity heat up both in the outside plant and headend segments.”
Vendor acquisitions are already underway, with Nokia’s $2.3 billion purchase of Infinera being the biggest so far. Other vendor M&A moves in the last year include CommScope’s $45.1 million purchase of Casa Systems’ cable assets and Vecima’s acquisition of Poland-based vendor Falcon V Systems.
In the case of Charter and Cox, the operators have enlisted different vendors to assist them with cable network upgrades. Cox in April tapped Vecima’s virtualized cable modem termination system (vCMTS) to modernize its network. Charter meanwhile is using vCMTS gear from Harmonic, but it does have a separate deal in place for Vecima’s Remote PHY system.
Harmonic leads growing vCMTS market
Harmonic is the de facto leader in the vCMTS market, Heynen notes, which he predicted will grow to about $366 million in 2028. Vecima and CommScope are relatively new players.
Charter has been vocal about wanting multiple vCMTS suppliers, so it’s possible the combined Charter-Cox footprint, which will span a combined 69.5 million passings, will contain vCMTS equipment from both Harmonic and Vecima, Heynen said.
“They will likely have both Harmonic and Vecima RPDs [Remote PHY devices] and nodes in their networks as well,” he added.
Charter and Cox – the perfect network marriage?
Charter CEO Chris Winfrey indicated the operator include Cox’s footprint in its upgrade plans – at least for now.
Still, the merger makes plenty of sense from a technology standpoint, said Heynen, as both Charter and Cox are pursuing extended spectrum (ESD) DOCSIS 4.0. ESD essentially extends the usable downstream spectrum on the hybrid fiber coax (HFC) up to 1.8 GHz (more on how that works here).
“That will make the access network consolidation go a bit smoother,” he said.
However, that consolidation won’t be without some rollout delays, “because there is always time required to assess the networks and see which systems need to be prioritized.”
Charter last fall already pushed back its DOCSIS 4.0 completion timeline to 2027. It’s unclear when Cox plans to do the same. A Cox exec told Fierce in 2023 the company plans to begin deployments this year, though deployments have not yet begun.