Tellabs Confirms Future Networks Buy

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As expected, Tellabs Inc. said Monday that it would acquire closely held
cable-modem vendor Future Networks Inc., claming that the move will help cable
operators to profit from nascent services such as voice-over-Internet
protocol.

Tellabs said it will purchase Alpharetta, Ga.-based Future Networks for $181
million and absorb about 50 of its employees. The deal is expected to close next
month.

In Future Networks, Tellabs will get its hands on a line of Data Over Cable
Service Interface Specification 1.0-certified and EuroDOCSIS-based cable
modems.

Future Networks has also submitted two models based on the more advanced
VoIP-enhanced DOCSIS 1.1 standard to Cable Television Laboratories Inc. for
certification testing. Those 1.1 products are designed to integrate voice and
data via the same box.

In addition, Future Networks currently has 'Embedded-Multi-Media Adapters'
(E-MTA) in trials, the company said.

Tellabs said the purchase will solidify its position in the cable-data and
telephony markets. Specifically, the company said it now has what it needs to
give cable operators a migration path from circuit-switched telephony to a
voice/data play based on DOCSIS 1.1-PacketCable infrastructure.

Tellabs' existing cable-telephony system -- a circuit-switched product dubbed
'CABLESPAN' -- currently handles more than 1.3 million lines in North America,
South America, Asia and Europe.

Prior to its deal to acquire Future Networks, Tellabs did not have a cable
modem on its product list. However, the company does have a
cable-modem-termination system/edge router called the 'CABLESPAN 2700' -- the
resulting product from an alliance with Riverstone Networks
Inc.

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