Networking giant Cisco Systems said it agreed to buy cable set-top box maker Scientific-Atlanta for 6.9 billion dollars in a sign of convergence of the telecom and television industries.
“This deal makes sense as telecom continues to change,” said independent telecom analyst Jeff Kagan.
“As telephone companies and cable TV companies gear up to compete, it’s all about the broadband line and all the services they can deliver to customers in all the different ways.”
Kagan said Scientific Atlanta “has been a company focused on the cable TV space, … but those set-top boxes are evolving and getting into phone and Internet and all the other advanced features the companies will need to compete with each other.”
Cisco, according to Kagan, “wants a company that can give them a foot in the door to deliver all these services to all these customers. Cisco wants to be a leader in TV, telephone and Internet, so this deal makes sense as a pre-emptive strike.”
As often as we’ve looked askance at convergence, if it ends up with someone sharper than the Telcos showing the way, we’re ahead of the game.
Video on demand. The consumers really want a digitally deliverable Netflix service in the family room. It’s the next logical progression beyond time shifting.