Motorola Wins Major Contract

Recently, Motorola Inc (MOT) was awarded a contract to supply EuroDOCSIS 3.0 digital video modems to UPC Broadband for its pan-European network. UPC Broadband is the European division of Liberty Global Inc (LBTYA), the largest cable TV operator in Europe.

Using Motorola’s SBV6120E EuroDOCSIS 3.0 voice and data solution, UPC will deliver high-speed (120 Mbps) data and IP voice and services to its customers in The Netherlands, Austria, Czech Republic, Hungary, Slovakia and Switzerland. The SBV6120E is part of Motorola’s complete portfolio of bandwidth-expanding EuroDOCSIS 3.0-certified technologies.

EuroDOCSIS 3.0 standard is based on 8 MHz channels whereas U.S. DOCSIS 3.0 standard is based on 6 MHz channels. Motorola’s DOCSIS 3.0 solutions enable cable operators to cost-effectively introduce new value-added services, increase bandwidth for feature-rich services, generate higher return on investment, and increase revenues.

Although the financial terms of this contract haves not been disclosed, we believe the UPC contract will act as a major catalyst for the company’s cable modem termination system (CMTS) business since Motorola is quickly losing its ground to both its larger peer Cisco System Inc (CSCO) and the emerging dark-horse Arris Group Inc (ARRS).

According to a recent report of Infonetics Research, Arris has become the new world leader in the CMTS market commanding approximately 47% of the global CMTS market having taken over leadership from Cisco System (39%) and Motorola (10%).

According to our assessment, the DOCSIS 3.0 market will continue to remain healthy in the near future as Intense competition among cable operators, satellite carriers and telecom service providers for broadband market share has forced the cable MSOs to opt for cost effective bandwidth enhancing technology for high-speed network.

Major cable MSOs in the U.S. are aggressively deploying the DCOSIS 3.0 technology. This in turn may result in significant demand for Motorola’s fiber-based network architectures such as, passive optical networks and DOCSIS 3.0 solutions.

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