CommScope spins out home networks business
Commscope, the spin out of General Instruments, is to spin out its home networks business as part of a restructuring. The company acquired Arris Networks, including the UK’s Pace Micro Technology set top box business, back in 2019. The company supplies the set top boxes for the UK’s FreeSat satellite TV service, for example and makes boxes for Liberty Global for TV networks across Europe.
The planned separation of CommScope’s Home Networks business and operating expense reduction represent early steps in the restructuring which the company calls ‘CommScope NEXT’ and highlights the challenge of manufacturing consumer equipment.
The spin-off will form a new and independent publicly traded company by the end of the first quarter of 2022.
“Since I joined CommScope last October, the Board and management team have been undertaking a comprehensive review of our portfolio of assets and how each contributes to our long-term growth strategy,” said Chuck Treadway, president and chief executive officer.
“As we proceeded with this review, it became clear that the Home Networks business’ distinct strategy, growth characteristics, investment requirements and returns on invested capital are not aligned with the rest of our portfolio. We believe that Home Networks will be better positioned to deliver superior home and consumer-oriented products as an independent company,” he said.
He expects additional cost savings across the company, which includes the Andrews antenna business, to make up for the lost income from the consumer business.
“We remain excited about CommScope’s potential, and with the core elements of our strategy intact, we are confident in our ability to deliver innovative solutions for network convergence for customers around the world,” he said.
The company says the planned spin-off will allow Home Networks to focus on innovation and pursue strategic market opportunities such as the smart home, accelerating growth and unlocking greater value for their customers, which would imply a merger with another supplier.
Upon completion of the separation, Joe Chow, Home Networks senior vice president, will become the chief executive officer of the stand-alone Home Networks company.
The deal also allows CommScope to focus on areas such as WiFi and 5G wireless communications systems and Open RAN (radio access networks) in particular, where the company last year acquired the assets of Phluido, which speciliased in RAN virtualization and disaggregation.
Following the completion of the spin-off, CommScope will be composed of three business segments.
The Broadband Networks, formed from TE Connectivity’s Broadband Network Solutions (BNS) division in 2015, serves the telecom and cable provider broadband market with systems to boost fibre capacity, fibre connectivity and network orchestration.
The Venue and Campus Networks business targets public and private networks for campuses, venues, data centres, and buildings. This is through its RUCKUS Wi-Fi 6 technology acquired from Arris alongside its cloud control platforms, ONECELL features to capitalize on 5G growth and virtualization, and driving high-density expansion in data centres.
The Outdoor Wireless Networks is focused on the Macro and Metro Cell cellular wireless, building metro cell power solutions and modularity design innovation. The segment is also working on the development of new technologies in cell site connectivity and other technologies to support telco carriers building their 4G and 5G networks.
CommScope will continue to be led by Chuck Treadway, president and CEO, and its current management team.
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