Denver, Home of 2006 Cable-Tec Expo, Represents $142 Million Business Services Opportunity for Cable
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GeoResults Data Cites Value of Business Market T1 and Cell Backhaul
DENVER, June 21 /PRNewswire-FirstCall/ -- The Denver metropolitan market represents a $142 million opportunity for cable system operators delivering T1 services, Vyyo Inc. (NASDAQ:VYYO), a global supplier of broadband access equipment for cable and private wireless broadband network solutions, announced today.
At the SCTE Cable-Tec Expo, Vyyo cited data from GeoResults, Inc., a telecommunications marketing and database firm, to highlight cable's ability to capture Business Services revenue by deploying high-margin T1 over Coax and T1 Cellular Backhaul solutions. Vyyo's T1 solutions and GeoResults' market-sizing techniques will be shown in booth #455 at the Expo.
According to GeoResults, 25,837 T1 links would be required to meet the needs of the more than 13,819 businesses in the greater Denver area that require T1 connectivity. At an estimated $400 per month per line, GeoResults estimates that the value of serving the local business community could be as high as $124 million a year. In addition, GeoResults projects the value of the T1 Cellular Backhaul opportunity in the Denver market at more than $18 million for 2006 alone.
"The Denver market alone represents a significant opportunity for cable system operators," said Ted Shields, president and CEO of GeoResults. "By deploying T1 services over their existing hybrid fiber-coax networks, the major operators who serve the Denver area could create a new source of stable, predictable business revenues in an area that historically has been dominated almost exclusively by telco competitors. In addition, cellular and wireless backhaul opportunity represents an area of considerable revenue growth for the foreseeable future."
The Business Services market, which now spends approximately $130 billion on telecommunications services each year, represents a substantial opportunity for the cable industry. Kagan Research estimates that in 2005, MSOs produced more than $1.9 billion in commercial telecom revenue -- or less than 2% of the total market -- up from just under $1.2 billion in 2004.
Kagan projects, though, that total revenue for commercial data and voice services will surpass $10.7 billion by 2009 as cable plant stretches to pass 60% of the businesses in the U.S. GeoResults estimates that cellular backhaul cumulatively will be a $42 billion business through 2010.
The Vyyo solutions allow the deployment of T1 according to the same model that has served the industry's high-speed data rollout so well: a headend-based broadband hub supports T1 traffic to and from T1 modems at the customer premises. The modem -- often self-installed, like a cable modem -- uses the same drop as existing video or high-speed data service. However, the T1 service can generate average revenue per unit (ARPU) of up to $400 in the Denver market, rather than the $30-$40 ARPU of cable modem service.
"It is impossible to ignore the economics of T1 delivery," said Steve Santamaria, senior vice president and general manager of Business Services for Vyyo. "T1s carry high margins -- nearly 72% -- on customer agreements that are for an average of three years. By deploying T1 services, cable operators can simply and scalably roll out new service offerings that have an immediate impact on their bottom line, at the expense of telco competitors."
About Vyyo Inc.
Our products are designed for use by cable television and wireless telecommunication operators, wireless internet service providers (ISPs), utilities and enterprise. Our cable solutions include cable system spectrum overlay solutions designed to expand cable operators' typical HFC (hybrid-fiber coax) network capacity in the "last mile" by up to 2x in the downstream and 4x or more in the upstream, addressing bandwidth demand for T1 and other advanced services. Our wireless broadband solutions enable utilities and other customers to operate private wireless networks for communications to their remote assets and customers. Typical applications include high-speed Internet services, SCADA (Supervisory Control And Data Acquisition), voice over internet protocol (VoIP) and telephony (T1/E1), all based on modified Data Over Cable System Interface Specification (DOCSIS(R)) technology. For more information, please visit www.vyyo.com.
Source: Vyyo, Inc.
CONTACT: media, Paul Schneider of Paul Schneider Public Relations, Inc.,
+1-215-702-9784, or mobile, +1-215-817-4384, or pspr@att.net, for Vyyo Inc.;
or investors, Walt Ungerer, VP, Corporate Communications, of Vyyo Inc.,
+1-678-488-0468, or ir@vyyo.com
Web site: www.vyyo.com/
