Voice-over-WiFi is clearly gaining momentum, aiding a broader movement that represents “the comeback of the voice applications,” Selina Lo, president and CEO of Ruckus Wireless, a provider of WiFi gear and controllers to MSOs and other service providers, said Wednesday during the company’s fourth quarter earnings call.
As voice moves toward LTE, “everything is equalized,” she said. “Voice becomes IP-based, and voice-over-WiFi is definitely changing the business model for some service providers,” Lo added, referencing pushes underway at T-Mobile, Google and at Cablevision Systems, which just launched its WiFi-only “Freewheel” phone service.
Ruckus, which counts Cablevision, Bright House and Time Warner Cable among its customers, is “seeing a trend that the fixed line operators are gaining strength in the market,” Lo said. “I think that over the next two, three years that you definitely will see a bunch of game changing things happening in the service provider space.”
The overall momentum was only partly found in Ruckus’s fourth quarter results. Revenues, at $85.9 million, were up 17.6% from the year-ago period, but came in below guidance of between $87 million to $90 million, while gross margins, at 69.6%, were above guidance.
Ruckus said revenues were impacted by delays in spending in the E-Rate program for underwriting high-speed broadband to schools and libraries.
“The delays have turned into pent-up demand, so we see a strong pipeline for education spending leading to accelerated revenue growth in the second half of 2015,” Lo said.
But service provider revenue rose 35% year-over-year. Ruckus, which counts Cisco Systems and Ericsson among its competitors, added 40 new service provider customers in the fourth quarter, extending its total beyond 200. The quarter included two “large wins” with unnamed North American and South American cable operators, Lo said.
Looking ahead, Ruckus expects first quarter revenues to be in the range of $84 million to $87 million, and earnings of 8 cents to 9 cents per share.