After watching its network and cloud business slump every quarter since it paid $7.4 billion to acquire leading cable technology vendor Arris a year ago, CommScope declared that it can only get better from here.
Late last week, the Hickory, N.C. company reported a 32% fourth-quarter slide in network and cloud sales to $366 million. Cable operators, still reaping the benefits of DOCSIS 3.1 upgrades and figuring out how to approach transformative new schemes such as Distributed Access Architecture (DAA), still aren’t spending on infrastructure like they were a few years ago.
CommScope told its investors that will change in 2020.
“We remain confident that network and sales bottomed in 2019,” said CommScope CFO Alexander Pease, speaking to investors during his company’s Q4 earrings call. “With underlying consumer bandwidth demand continuing to grow, coupled with our investments in virtualized and distributed access architecture platforms, we remain in a strong position to guide operators through the 10G network infrastructure investments that they will deploy within the coming decade.”
The perennial leader in technologies such as Cable Modem Termination System (CMTS), CommScope suddenly finds itself in the position of playing catchup with Harmonic, which has jumped out to an early lead in the emerging era of network virtualization and DAA
CommScope CEO Marvin Edwards assured investors that CommScope is moving forward in regard to these innovations.
“We completed a major release of our vehicle of virtual CMTS product, which will prepare us for operator deployments in early 2020,” Edwards said. “We also completed deployment and development of our remote PHY shelf product, which enables operators to place multiple RPD modules in a single chassis for data distribution from remote hubs.”
Overall, combined company net sales for CommScope declined 19% in the fourth quarter, as other sectors besides network and cloud slumped for the company, too.
Customer Premises Equipment declined 25% to $824 million in Q4, for example, while mobility sales were off 6% to $366 million.
For the year, net sales for the combined CommScope declined 13.8% to $9.76 billion.