Cisco Plans to Sell Scientific-Atlanta Division

With set-top boxes becoming outdated, Internet equipment giant Cisco (News - Alert) Systems is planning to sell the Scientific-Atlanta division, which the company acquired some six years ago for about $7 billion. A source recently told The New York Post that the declining set-top box business has prompted the Internet equipment maker to put Scientific-Atlanta (News - Alert) on the chopping block.

“I know Cisco is out looking to sell Scientific-Atlanta,” the source told the Post. However, a Cisco spokeswoman declined to comment, wrote Post reporter Josh Koshman.

Koshman wrote that much has changed in the set-top box business since Cisco acquired Scientific-Atlanta all those years ago. Besides the surge in the streaming of Internet content, the race to introduce video on multiple platforms is progressing rapidly.

As per the Post report, the most likely candidates for buying the set-top box maker are private equity firms, who often pay a low price for mature businesses.

Another source told the Post that Microsoft (News - Alert) had shown interest in 2006, but a lot has changed since then. Meanwhile, “Cisco has said it’s moving from set-top boxes to Videoscape, a product built on technology gained from Scientific-Atlanta that allows media companies to deliver content through the cloud to smart phones and tablets,” wrote Koshman.

The report added that key manufacturing facilities for Scientific-Atlanta’s products are located in Juarez, Mexico. In 4Q 2011, the Internet equipment giant entered into an agreement to sell the Mexico manufacturing facilities to one of its contract manufacturers.

On another front, Cisco has just stated that it has completed a successful demonstration and validation of its coherent 100 Gigabit (100G) dense wavelength division multiplexing (DWDM) solution exceeding 3,000 km in reach, without the need for complex Raman optical amplification technology or signal regeneration signals. According to Cisco, this distance is 50 percent more than any non-Raman alternative solution on the market today.

By eliminating the need for Raman amplification, regeneration and dispersion compensation, carriers can add 100G services on top of existing infrastructures originally designed for 10G technology, providing better investment protection and simplifying network upgrades.