BigBand Shrinks

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After reporting lower-than-expected earnings last week, BigBand Networks said it will lay off about 100 employees — 15% of its workforce — and that it will discontinue its Cuda cable-modem termination system.

BigBand CEO Amir Bassan-Eskenazi said the company is making the changes to focus entirely on video networking. After the layoffs, largely related to the CMTS product line, the company will now have about 500 employees, he said.

“It's a difficult day for us, having let go 100 great people,” he said. “We made the correction and we're moving forward.”

There was one bit of good news: Comcast has selected BigBand's switched digital video manager, the software that manages the communication between the set-top box and makes the decision about which channels to deliver, Bassan-Eskenazi said.

In addition, Bassan-Eskenazi said, BigBand in the third quarter received commercial orders for switched digital video systems from two other cable operators, which he declined to name.

Comcast has also specified Motorola as an SDV supplier, as well as Arris and Harmonic for edge quadrature amplitude modulation devices.

ThinkEquity Partners analyst Anton Wahlman, in a research note, said he was “skeptical” that the Comcast deal will translate into “material revenue in 2008, if ever” for BigBand.

“We would need to see more evidence about the probability of such a broad-based rollout before getting more positive” on BigBand, Wahlman wrote.

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