Late last week, Vecima Networks announced that it was acquiring Falcon V, a Polish developer of access network orchestration software designed to facilitate the deployment of vendor-agnostic DOCSIS, fiber, and wireless networks. The acquisition will help accelerate Vecima’s Entra vCMTS product development and help the company build closer ties to Charter as the cable operator continues its Distributed Access Architecture (DAA) network transformation. The deal also helps to soothe the sting of Vecima’s unsuccessful bid for the cable assets of Casa Systems, despite establishing itself as the stalking horse bid in the auction.
Falcon V, which originated in 2018 as a joint venture between Liberty Global and equipment supplier Vector Group, received an investment from Charter and Liberty Global in 2021 to focus on developing SDN and NFV solutions to allow for the deployment of open DAA systems. At the time of the investment, Charter was focused on deploying Remote MACPHY technology, as opposed to Comcast and other operators, who were moving forward with Remote PHY. Falcon V was said to be working on software that could accelerate vendor interoperability and help Charter move more quickly in the direction of Flexible MAC Architecture (FMA), which offered the operator far more flexibility in where it could locate the MAC (Media access control) function, be it in nodes, hub sites, headends, or centralized data centers.
But in October 2022, Charter changed direction and moved away from Remote MACPHY toward Remote PHY. That strategic shift left many wondering whether Falcon V would still have a role to play in Charter’s transition to DAA. In actuality, nothing changed much for the software supplier, as it was still focused on developing orchestration software as well as an interop testing suite designed to ensure Charter could have a truly open, vendor-agnostic DAA network.
In March 2023, Charter announced that it had selected Harmonic as a vCMTS and Remote PHY Device (RPD) technology supplier while also selecting Vecima as a supplier of its ERM 3 RPDs, which can be installed in its EN 9000 Generic Access Platform (GAP) nodes, all clearly indicating its commitment to a multi-vendor deployment. Vecima had already been selected as the lead supplier of Remote OLTs (R-OLTs) in Charter’s RDOF network buildouts and is presumably a lead supplier of these platforms in potential non-RDOF deployments, as well.
In September 2023, Vecima also announced it had entered into a warrant agreement with Charter, providing Charter the opportunity to purchase up to 361, 050 shares of Vecima stock through 2031 at a strike price of C$17.09 per warrant. That translates into an agreement of roughly US$4.5M and is dependent on Charter achieving certain spending targets.
So, even before the Falcon V acquisition, the relationship between Vecima and Charter was already strong. The addition of Falcon V and its employee base extends that relationship further into the realms of vCMTS, software orchestration, and DAA interop testing.
An Answer to Charter’s Interop Issues?
Back in February 2024, Charter’s Chris Winfrey announced that the start of phase two of its network transformation—the phase focused on RPD and vCMTS deployments—would be delayed from the beginning of the year to late 2024, at best. The culprit? DAA equipment certification delays due to greater-than-expected challenges with interop testing. Though Winfrey didn’t provide specifics on the delays, Charter’s multi-vendor strategy is already ambitious, especially when the company continues to build out RDOF properties with R-OLTs and is also trying to roll out new nodes and amplifiers.
Thus, Vecima’s acquisition of Falcon V could very well have been pushed by Charter as a way to reduce the number of discrete vendors it has to coordinate with as it goes through the interop and homologation process. Charter has already made financial commitments to both vendors, so why not advocate for a marriage to help potentially speed up the DAA rollout process? The double-edged sword of DAA network rollout delays and subscriber losses is beginning to weigh heavily on Charter’s investors. So, anything that its vendor partners can do to solve those issues will certainly be welcomed by the operator.
Accelerating Vecima’s vCMTS Development
Beyond tightening its relationship with Charter, the addition of Falcon V’s products, as well as its software development teams will certainly help bring Vecima’s Entra vCMTS platform to market more quickly so that it can compete with Harmonic and Commscope. Though the Falcon V acquisition doesn’t completely make up for missing out on acquiring Casa’s cable assets, including its Axyom vCMTS and vBNG platforms, it does help to add pieces to what is an incredibly complex platform.
Vecima needs to accelerate the time to market of its Entra platform, especially at a customer like Charter, which has said it wants to move forward with a multi-vendor core, not just a multi-vendor PHY layer. While the details of just what a multi-vendor core might look like and how it will benefit Charter with all of the many balls it already has in the air, it certainly represents an opportunity for Vecima to position itself with a major operator that has plans beyond just the upgrade of its HFC network.
Charter likely similarly views the vCMTS as Comcast: As an edge compute platform that will ultimately enable services beyond those in the DOCSIS realm. The first workload after vCMTS is vBNG to support FTTH services and then perhaps an AGF (Access Gateway Function) workload to deliver converged fixed and mobile services over the existing HFC plant. Beyond that, perhaps a truly converged fixed and mobile core.
