ARRS Arris International Plc - Ordinary Shares

Arris Group Inc. (ARRS) will unveil an innovative and upgraded cable modem termination system (CMTS) this week in The Cable Show (NCTA 2011) in Chicago. The new cable access module (CAM) will be integrated with Arris’ flagship C4 CMTS products. The new CAM will upgrade the C4 CMTS with 24 downstream ports immediately doubling the speed of the existing 12 downstream port CMTS. The new upstream card will complement the company’s recently launched XD CAM that supports 32 downstream ports.

The new CAM will support S-CDMA technology that will enable CMTS to support upstream HFC capability. The existence of S-CDMA technology will enable Arris’ new cards to support upstream services in as low as 5MHz frequency. With S-CDMA in its side, Arris can now take head on with Motorola Mobility Holdings Inc. (MMI) developed CMTSs. The new CAM can support spectrum for as high as 85 MHz. This will enable cable operators to use more spectrums for future services in a cost effective manner.

One of the primary features of the new Cam of Arris is that it can support DOCSIS 3.0 upstream channel bonding with IPv6 capabilities. At present, Arris is the second largest CMTS product developer after Cisco Systems Inc. (CSCO). Cisco’s CMTS products already support 60 ports. Comcast Corp. (CMCSA), the largest customer of Arris, is expected to check converged multiservice access platform combining CMTS and edge QAM products. Therefore, it is very much necessary for Arris to increase capacity of its existing platform for remaining competitive in the market.

Arris’ new 24 port CAM can be installed in all existing C4 CMTS chassis and does not require any external wiring or added components. As a result, the existing customers do not require the replacement of the whole chassis.

We maintain our long-term Neutral recommendation of Arris. Currently, it holds a short-term Zacks #3 (Hold) Rank on the stock.

 
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