The cable industry’s migration to distributed access architecture is leading operators to postpone investments in the current generation of network technology, while ensuring interoperability between different parties’ systems is acting as a brake on the deployment of new technology, according to Teleste CEO Jukka Rinnevaara, whose company posted reduced net sales and operating income for the second quarter.
Rinnevaara said that the decline in Teleste’s net sales and operating result had been “expected” due to the strong comparative period last year.
However, he said that the cable industry was “in the middle of a technological transformation in which the next-generation distributed access architecture will provide the most competitive solution for increasing network capacity” and that operators had “postponed their investments in existing network technology while preparing for the adoption of a distributed access architecture in both Europe and North America”.
Rinnevaara said that Teleste’s product development in this area had progressed as planned, but that “ensuring interoperability between different parties’ systems has turned out to be more demanding than foreseen across the entire industry”.
Telestes’ network services business line also saw a revenue decline, with growth in the UK failing to offset declines in Germany and Finland, with the figures for Germany impacted by the completion of a significant project at the end of last year.
The company’s video and broadband solutions business saw growth and improved performance in the second quarter, with a strong order backlog.
Teleste posted net sales of €58.2 million for the quarter, down 10.6%, while operating income was down 34.2% to €2.3 million.