Charter Ready to Upload BroadJump

Cable World, Sept 3, 2001 by Mavis Scanlon

Software will back MSO's retail cable modem push

Solidifying its leadership in the increasingly important cable modem self-installation business, 3-year-old BroadJump Communications won a contract from Charter Communications, the fourth major MSO it has signed up.

Charter, which plans to boost its retail distribution of cable modems, will deploy BroadJump's installation software throughout its entire network. The deal is expected to be announced Tuesday.

A growing percentage of consumers are buying cable modems in retail stores and installing them without the need of a cable-company technician, which is more convenient for customers and more economical for the operator.

Comcast Cable, for instance, which will have modems for sale in about 1,200 retail outlets by the end of this year, says self-installations account for one-third of its retail business. And Cablevision Systems, which sells about 25% of its cable modems at its the Wiz chain of electronics stores, says about 85% of the modems sold there are installed by customers.

With the Charter win, BroadJump, based in Austin, Texas, now controls over 50% of the market for self-installation of cable modems. BroadJump founding partner, CEO and president Kip McClanahan expects additional MSO customer announcements this year.

The Charter deal is BroadJump's ninth customer win, McClanahan says. BroadJump is currently engaged in discussions with virtually all of the major North American broadband providers that it is not currently doing business with, he adds. That includes Cox Communications and Comcast, the two MSOs that last week notified beleaguered Internet access provider Excite@Home that they will be terminating their exclusive pacts with Excite as of June 4, 2002. Excite@Home is BroadJump's biggest competitor in the self-install software market.

While McClanahan declined to provide financial terms or the projected revenue his company might see from Charter, McClanahan says the MSO will pay a per-subscriber license fee.

The software package will also allow customers to more easily sign up for services such as data backup, virus protection and firewall services at the time of installation. Those services may be paid for on a license basis or on a transactional basis, he says.

BroadJump supports both cable modem and DSL providers. Right now cable is adding customers faster, said S.G. Cowen analyst Gary Farber in a recent research note. Cable added about 731,000 customers in the second quarter, according to Cowen, compared with 490,000 customers added by DSL providers.

Since it was founded, BroadJump has racked up an impressive customer roster that includes MSO customers Time Warner Cable (and its Road Runner service), AT&T Broadband and Adelphia Communications. Its DSL customers include BellSouth, Bell Canada, SBC Communications and Sprint.

In July, the privately held company raised $22 million from investors including SBC, BellSouth and Nortel, underscoring investors' confidence in BroadJump's prospects.

McClanahan expects the recent capital raised will see BroadJump through to profitability by the second half of next year.

BroadJump's family of installation products is aptly named Virtual Truck. Cable modem customers use the software package to configure operating systems and perform necessary tests to get the modem up and running, thereby eliminating the need for the MSO to send a truck to the customer's home.