WHITEFISH, MT / ACCESSWIRE / January 22, 2015 / The cable industry has experienced tremendous growth over the years, particularly in the provisioning of cable internet. For instance, Time Warner Cable Inc. (NYSE: TWC) reported residential high-speed data revenue that jumped 10.9% to $1.62 billion last quarter compared to residential video revenue that fell 4% to just under $2.5 billion. The company's subscriber growth mirrored these trends with an increase in data and decrease in video subscribers.
Cable companies are able to offer significantly faster internet through cable compared to many other mediums like DSL services offered by companies like AT&T Inc. (NYSE: T), but the cable industry's footprint is significantly smaller than the telecommunications industry. With the high cost of expanding cable networks, many cable providers have foregone building out their presence to remote areas throughout the United States.
4Cable TV International Inc. (OTC: CATV) aims to solve these problems with its RF to fiber (RF2F)(TM) technology that leverages the power of fiber optics to extend cable to remote areas. In essence, the technology enables cable operators to reach homes within their franchise areas that were not previously economically reachable. With the new technology those homes can immediately generate revenue.
According to a company whitepaper detailing 4Cable TV's technology, cable companies traditionally spend between $3,600 and $5,500 to purchase new subscribers. By using RF2F (TM) technology companies could lower that amount to under $1,000 and in many cases under $500 per subscriber by extending into remote areas. These dynamics can help grow a customer base by 10% to 20% without incurring the high capital expenditures associated with extending traditional cable infrastructure into new areas.
Growing Demand
The cable industry is both large and small at the same time. While large players like Comcast Corporation (NYSE: CMCSA) and Time Warner Cable Inc. control the majority of the market, there are over 300 small providers that constitute the remainder of the market. These smaller competitors are highly incentivized to scale quickly to take market share from larger competitors and often become acquisition targets if they succeed.
Over the past year, the company has been very successful in growing its RF2F(TM) business among large Multi System Operators ("MSOs"). Management began 2014 with a single MSO trial underway and ended the year with equipment approvals from three of the top 10 MSOs and purchase orders in place for three of these MSOs. Additional purchase orders are also coming in on a weekly basis from large and small MSOs in the space.
Management plans on expanding its footprint over the coming quarters by expanding its sales and business development personnel. Over the past year, the company has already made great strides in these efforts by signing contracts with five independent U.S. sales representative firms, one Canadian distributor, and one European distributor. These efforts have effectively expanded its sales team by 20 moving into 2015.
Improving Technology
4Cable TV has been diligently working to improve its technology platform. With its flagship RF2F(TM) technology, the company expanded the product line from just five configurations to more than a dozen in a move to address a greater number of customers with varied needs and existing architectures. The flagship solution is joined by a number of other complementary solutions designed to address and expand upon addition potential end markets over the coming quarters.
These other solutions include:
- PowerMiser(TM) - This circuitry allows a low current 1 GHz amplifier (and/or line extender) to be constructed with a dramatic 50% decrease in current power requirements, while maintaining essentially the same operational specifications.
- RFoG - This signal distribution technology combines the existing cable TV infrastructure with the efficiencies of fiber optics to effectively reach the home in a way that is competitive with the existing options.
- Node+0 - This application combines the RFoG technology platform with our PowerMiser engineering to take fiber signal all the way to the last device before the customer. This results in a much more reliable system with lower operating and maintenance costs.
- SOLAR-CATV - This extension of the PowerMiser and the Node+0 utilizes solar power and helps the operator extend service to areas not presently served without adding power sources.
- DSR - This technology allows nodes, R-ONU's (RFoG optical network units) to dynamically adjust their return bandwidth simply be changing the channel lineup at the head end.
The company's technology innovation promises to drive adoption rates and ensure that long-term growth rates remain intact as it saturates an increasing number of large MSOs. With the sales infrastructure in place to upsell these solutions, management has positioned the company to benefit from increasing demand for its solutions.
Looking Ahead
4Cable TV has spent the last year executing on its plans to rollout its premier RF2F(TM) technology among large MSOs. After gaining traction toward the end of last year, the company is rapidly approaching a key tipping point that investors may want to watch. Technology investors in cable infrastructure companies like ARRIS Group Inc. (NASDAQ: ARRS) or Harmonic Inc. (NASDAQ: HLIT) may want to pay close attention to this niche opportunity in the space. With a market capitalization of less than $6 million, the company represents a compelling micro-cap opportunity for investors willing to assume the risk in exchange for higher potential returns.
For more information, visit the company's website at http://www.4cable.tv.
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SOURCE: Emerging Growth LLC