Electroline Moves Beyond MDU Niche

3/15/1998 7:00 PM Eastern

Electroline Equipment Inc., one of the few remaining
manufacturers of addressable taps, is taking steps to elevate its products from niche to
mainstream status.

Electroline is in ongoing discussions with Comcast Corp.,
Time Warner Cable and other MSOs in hopes of redefining its addressable-tap market -- for
years relegated to multiple-dwelling units -- to include single-family units. Electroline
currently has about 4 million addressable drops installed in cable systems worldwide.

The company is repackaging its product presentation to
MSOs, emphasizing cost efficiency and healthier cash flow, executives said.

"We had previously discussed our product with
technical people, but ultimately, our addressable taps are not a technical sell,"
said Bob Geissler, head of U.S. operations for Canada-based Electroline.

Historically, addressable taps have been used primarily in
MDUs, where tenant churn is high and access is limited, enabling operators to save money
on truck rolls and disconnects by using a simple on/off switch.

Electroline wants to extend that mind-set, reasoning that
the use of addressable taps to achieve operational efficiencies equates to an impressive
cost savings for operators. Geissler's math, for example, figures a $10 to $25 cost
per truck roll to disconnect or reconnect, while the average payback for a $150 tap is
about two years.

"We hadn't had success [in our economic theory]
until we applied cash-flow economics. Now, we are getting a sympathetic ear and dynamic
interest in the past 18 months," he said.

The company currently offers two types of taps: its
"Compact Addressable Tap," which is an "intelligent" tap for MDUs; and
a strand-mounted "Super Tap," configured as a conventional tap, which is
available in either passive or addressable versions and upgradable to addressable service
by swapping face plates.

Electroline is also developing a $22
"retro-plate," which gives operators an easy way to turn existing passive taps
into addressable taps.

Operators such as Jones Intercable Inc. like addressable
taps for their high-churn MDUs. "They're good for MDUs because you can turn them
on or off at different times, and you avoid truck rolls," said Wayne Davis, vice
president of technical operations for Jones.

Davis said that when faced with access issues, like in
Manhattan or other metro locations, addressable taps can be very effective "because
you may be serving structures that don't allow good access."

Geissler said Electroline is responding to a renewed
interest among cable operators for addressable taps. "We see the market going to
single-family units," which typically experience churn rates of two to five years, he
said. "It's a market for us."

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