Arris Box To Play Role In Charter’s All-Digital Plan

Arris has begun to deploy a new set-top platform to Charter Communications that will play an important role in the MSO’s all-digital migration plan, Arris chairman and CEO Bob Stanzione said Wednesday on the vendor’s third quarter earnings call.

Arris achieved product acceptance and has begun to ship the device to Charter, he said.

Stanzione did not shed more details about the box in question, but Charter is preparing to deploy a dual-security set-top that will support an integrated version of its legacy conditional access system as well as a new downloadable security platform that is closely aligned with a new security platform being deployed by Cablevision Systems. Charter has been asked to comment about how the new Arris box will factor into its all-digital transition. 

In April, the Federal Communications Commission awarded Charter a temporary waiver that cleared the way for Charter to deploy such a device as it looks to reclaim analog spectrum and pave the way for its new security platform. Charter successfully argued that it would be egregiously expensive to create a dual-security box with a CableCARD slot, and that the development of such a product would likewise delay its all-digital conversion.

Further out, Charter is said to be developing a platform that would support a next-gen hybrid user interface, internally dubbed the “Sky UI,” that would support cloud-based component as well as elements that would remain resident in the box. Charter, sources said, has already issued a request for proposal for this so-called “World Box.” It’s not clear if Arris will have a role in that product as well, but Humax and Samsung are said to be among the candidates to land some of that business.

Separately, Stanzione said Arris is working with “lead customers” to develop and deploy network DVR capabilities that augment in-home DVR functionality. “We expect live deployments before year end, with larger scale service in 2014,” he said.

CCAP Momentum

Arris said it continues to make progress with the E6000, a product that is starting out as a high-density cable modem termination system (CMTS), but will later tack on edge QAM components that will turn it into a fully-fledged integrated Converged Cable Access Platform (CCAP).

Stanzione said that nearly 1 million cable subs are now connected to the E6000. Announced customers for it include  Comcast, Time Warner Cable, GCI, and WideOpenWest.

On the flip side, DOCSIS device shipments in the quarter dipped from Arris’s record second quarter. Stanzione said 89% of the DOCSIS units shipped in the quarter were DOCSIS 3.0- capable, while 60% were Wi-Fi enabled.

Earnings Snapshot

Arris posted earnings of 39 cents per share on revenues of $1.06 billion, beating earnings guidance in the range of 32 cents to 37 cents. Looking ahead, Arris expects fourth quarter revenues in the range of $1.15 billion to $1.18 billion on 42 cents to 46 cents per share, ahead of Wall Street’s expected $1.13 billion and 43 cents per share.

In the quarter, Comcast was Arris’s largest customer, representing $204 million, or 19.1% of sales, followed by Verizon Communications ($118.2 million/11.1%) and TWC ($85.6 million/8%).

Last week, Stanzione told Multichannel Newsthat Arris had completed most of the customer-facing aspects of its integration of Motorola Home, and expects to wrap up the rest, including the melding of IT infrastructures, within the next six to nine months.