Vecima deepens Tier 1 vCMTS position with Casa Systems’ $20M cable business acquisition

April 4, 2024
Analysts say the acquisition will renew Casa’s cable unit focus on the cable and wireline broadband markets.

Vecima Networks has agreed to acquire Casa Systems’ cable business assets and other subsidiaries for $20 million. Casa recently filed for bankruptcy protection. 

Casa and certain subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) to facilitate the sale.

Casa has sought Vecima's approval as a “stalking horse” bidder for the Cable Business assets under Section 363 of the Bankruptcy Code. The transaction is subject to bankruptcy court approval and other bids for the cable business assets at an auction coordinated by the bankruptcy court.

If Vecima’s bid is accepted, it expects to close the deal at the beginning of June. Closing is subject to Bankruptcy Court approval and other customary closing conditions.

Jeff Heynen, VP at Dell’Oro Group, wrote in a recent blog post that while Casa had gained considerable momentum with several large cable operators, the company encountered some recent setbacks it could not initially overcome.

“Casa, which from 2014-2018 generated cumulative revenue of just under $1.3B from its C40G and C100G CMTS and CCAP platforms and secured a significant footprint at Charter, Claro, Rogers, and other tier 1 operators, was unable to rebound from the 1-2 punch of a softer market for DOCSIS licenses and Charter’s announcement in March 2023 that Casa would be excluded from its massive network upgrade project,” he said. “Additionally, Casa could not find enough traction for its vCMTS and DAA products to offset declining license revenue for its integrated CCAP platforms, although the company does have some DAA traction with Rogers Communications, Vodafone, Liberty Global, and Claro Colombia.”

Heynen added, "Casa’s cable products are well-regarded in the industry for their architecture and reliability. We regularly hear from cable operators that the C100G platform continues to serve as the core of their broadband offering.”

A renewed focus

By being acquired by Vecima, Casa’s cable unit can emphasize pursuing opportunities in the cable and wireline broadband segments.

Heynen said, “What Vecima offers to the Casa cable unit is a renewed focus on the cable and fixed broadband markets, which was arguably missing at Casa as the company tried to balance R&D investments in its cable, vBNG, mobile core, and fixed wireless access product lines.”

He added that Vecima could drive new DAA opportunities from its current customers.

“With the focus and continued support by Vecima of Casa’s existing customer base, Vecima can potentially turn those customers into longer-term DAA customers,” Heynen said.

vCMTS opportunities

Vecima can pursue new virtual CMTS (vCMTS) opportunities through this deal.

Specifically, Vecima will add Casa’s Axyom vCMTS software, a web-scale solution based on a distributed micro-service framework, to its product portfolio.

The Axyom Software Platform includes Casa Systems’ virtual software workloads and the software that manages those micro-services. The Axyom software architecture includes VNFs for all broadband service providers—mobile, fixed, cable, and converged.

“From a product perspective, Vecima gains Casa’s Axyom vCMTS software, which it can use alongside its own Entra vCMTS platform to scale overall vCMTS deployments as they continue to expand at cable operators around the world,” Heynen said. “Additionally, we are aware of deployments where Vecima’s RPDs have been deployed along with Casa’s vCMTS, so demonstrating interoperability at other operators shouldn’t be a challenge. Ultimately, we would expect the Axyom and Entra vCMTS platforms to be integrated into a single software stack to avoid parallel development efforts that could sidetrack operator deployments.”

Another critical element is enhancing its vCMTS customer base with Tier 1 operators like Charter and Comcast.

“Though Harmonic currently dominates the vCMTS market, holding 98% of global revenue in 2023, a good portion of that revenue comes from Comcast, which was the early mover in deploying vCMTS platforms in the industry,” Heynen said. “Charter is also planning to deploy Harmonic’s cOS broadband platform but has also signaled its desire to have multiple vendors’ vCMTS platforms in its network, which leaves the door open for Vecima to secure a portion of that business in addition to the RPD business it has already solidified there.”

Besides Charter, Harmonic has the potential to gain new business from a host of other cable operators that have yet to adopt vCMTS.

“Beyond Charter, there are dozens of cable operators who have yet to begin their transition to vCMTS,” Heynen said. “There are many more who are facing the discontinuation of Cisco’s CBR-8 platform, which will not be upgraded to support DOCSIS 4.0, thus pushing operators to transition to a vCMTS platform.”

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