Terayon Communication Systems (fka TERN)

[SEBASS]

Another Look at Exit out of Modem business.

Terayon Exits DOCSIS Business to Focus on Video

http://www.cabledatacomnews.com/feb06/feb06-8.html

Terayon Communication Systems Inc. announced a restructuring late last month to focus solely on its CherryPicker digital video products, repositioning the company as a "pure-play video business." Although Terayon was one of the first suppliers of cable modem products, the company's position in the segment has deteriorated over the last few years in the face of intense competitive pressure.

Shortly after taking the helm at Terayon, CEO Jerry Chase led the charge to dump the company's struggling CMTS business in October 2004. Now the other shoe has dropped. Terayon said it's "reviewing strategic alternatives for its Home Access Solutions product line." It expects to record a modest charge of about $600,000 in restructuring costs, mostly in the first quarter.

Separately, Terayon announced a win last month with Chunghwa Telecom, Taiwan's largest telecommunications provider. Through the deal, Chungwa is deploying the Terayon DM 6400 Network CherryPicker for its Multimedia on Demand (MOD) architecture. The MOD service is now available to 13 cities and counties throughout Taiwan and counts some 200,000 subscribers. The DM 6400 units are aggregating and distributing MPEG-2 video streams via Gigabit Ethernet, performing such functions as rate shaping multiple standard-definition programs and video-on-demand feeds, as well as digital ad insertion.