The cable operator that also tinkers and builds products is part of industry history.
That tradition is nonetheless fading, as industry consolidation has turned many onetime innovators into fast-followers eager to ride cost curves down to the lowest common denominator.
The counter-example of the manufacturer that owns and operates cable systems is even more rare. From the perspective of one vendor that fits that profile, the combination works.
"On the one hand, it makes good business sense," said Sumit Kumar, VP corporate strategy for Vecima Networks, a Victoria, BC-based supplier of cable and wireless equipment that also runs a handful of profitable systems in western Canada.
But there’s more to it than simply being successfully diversified. "Our core market is to sell products to MSOs," Kumar said. "(But) by being an MSO, it gives us a test bed, an insight into their drivers, motivations, frustrations."
Vecima got into the operator business about six years ago by acquiring some "mom-and-pops that were looking for a typical exit strategy," Kumar said. All told, Vecima’s cable and wireless systems now number some 17,000 subscribers. They consist of five YourLink cable and Internet operations in British Columbia and the YourLink wireless broadband operations in Saskatchewan.
Wireless services are doing especially well. "The wireless area is growing by leaps and bounds," Kumar said, noting the addition of 20-30 commercial customers on a weekly basis.
This service category also complements Vecima’s expertise in WiMAX and broadband wireless Internet. "As part of this whole strategy of implementing systems and test beds … we also purchased wireless spectrum in the 3.5 and 2.3 GHz band, nationwide," Kumar said. (For more on the Canadian wireless scene, click here.)
"We can use it in one of two ways: Marry it to equipment we sell to wireless ISPs, or use it ourselves," Kumar said.
One system that looks especially promising is in Revelstoke, BC, a small city beside the Columbia River and the Trans Canada highway. The Revelstoke system expanded its footprint in a contract with a two-year-old mountain resort development that boasts 5,620 vertical feet of skiable terrain.
Canadian telco Telus won the VoIP part of this deal, but Vecima-backed Revelstoke Cable Television captured the cable video side, and potentially more.
"Fiber, cable, wireless, WiMAX … that’s all going to unfold," said Paul Davis, Vecima director of strategic initiatives. "They want high definition and broadband data all over the mountain, with fiber-driven and wireless overlay."
"One of the reasons that we got it was the combination of our depth in all technologies," Davis said.
– Jonathan Tombes
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