Juniper jumps into broadband
 
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Juniper Networks this week announced a definitive agreement to acquire privately held cable modem maker Pacific Broadband Communications for $200 million in stock.
Pacific Broadband develops cable modem termination systems (CMTS) that enable cable operators to deliver IP services such as voice over IP, cable modem Internet access, DVD-quality streaming video, and business service-level agreements over the last-mile cable infrastructure. Juniper says the acquisition is consistent with its strategy to extend out from its roots in the IP core to address new markets, products and industries.
"This is a complementary systems focus to add to the Juniper portfolio," says Scott Kriens, Juniper CEO. "This is another step in reaching out from the core to add reliability, performance and intelligence to the expanding markets surrounding the backbone."
Juniper is again encroaching on a market coveted by rival Cisco. A few years ago, Cisco entered the CMTS market with the uBR7246, a hybrid router/CMTS head-end and has gained some credibility there, according to analysts.
Still, Juniper makes its move based on customer requirements, not on competitive response, Kriens stressed. Juniper heard a need for a reliable CMTS system for IP service provisioning and as a result, made the move to acquire PBC.
It requires a focus and execution that has been the trademark of Juniper, he says. The ability to take "piece parts" and assemble systems is "the most valuable element of the Juniper franchise," Kriens says.
The CMTS market will be $500 million this year, growing to $1.3 billion in 2005, Kriens says, citing data from Gartner Group/Dataquest.
PBC's Kodiak G10 CMTS head-end is entering trials this quarter with some multiple service operators. Juniper will announce general availability at a later date, Kriens says.
Kodiak G10 is currently DOCSIS 1.0-compliant; DOCSIS 1.1 compliance is on the product's roadmap, PBC officials say.
The acquisition has been approved by the board of directors of each company and is subject to various closing conditions including approval under the Hart-Scott-Rodino Antitrust Improvements Act. It is expected to close in the fourth quarter.
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