Casa Systems delivers on mobile network growth

Did you hear about the cable network specialist that makes its own Radio Units and chips, and wants to be a leading disruptor in the 4G/5G cloud core?

Casa Systems, a company best known for its cable network products, is seeing increasing business from its wireless and mobile network customers, driven by demand for Fixed Wireless Access products, cloud-native core network software and radio technology.

The company made just under 25% of its £83 million total Q2 2020 revenues from sales to the mobile and wireless sector. But it has a substantial order backlog for wireless products that it expects to clear over the next two quarters, raising the contribution made from its wireless products over the second half of the year.

CEO Jerry Guo said that a key recent driver has been sales of Fixed Wireless Access (FWA) products in the US and Asia Pacific. He also sees increasing opportunity for its cloud core and 5G radio products.

Guo says that the although the company is “traditionally less well known” in wireless circles, it already has significant traction with tier one operators. It is one of the largest suppliers of FWA devices as well as being “one of the leading disruptors” in the competition for the 5G core. “We see ourselves as one of the major players in packet cores going forward,” he says.

Here, one aspect it is looking to exploit is the move to cloud-native, micro-services based Core Network Functions.

“In the 4G generation, most of the incumbents took the software they had running on a chassis and ran it on a server, which you could call virtualisation. We started from scratch, given that we didn’t have a legacy chassis. So we have a microservices cloud-native packet core with many different components, from the AMF, SMF and UPF on the 5G point of view and some such others such the NSSF and NRF. Also we have a 4G/5G combined core, where our user plane is a combination of SGW-U and UPF, plus there’s our legacy or traditional MME which is more a pure MME component. We were very early in using CUPS (Control user Plane Separation) architecture so you can get the benefit of the 5G core without having to go to the 5G SA core, and you can deploy the UPF very close to the edge or in private networks.”

Casa Systems doesn’t have everything in the core, though, and the company will take a partnership approach to complete its portfolio where necessary, such as with its existing partnership with HPE.

“HPE has their Subscriber Data Management and Service Orchestrator that we integrate with in order to have a more complete solution. And we also work with System Integrators to deliver things to service providers, although we actually also integrate partners’ components into our solution. Especially with the CI/CD and cloud native way of doing things are new to the operators, they do need help; even if they want to do best of breed, they still need help to do the integration.”

However with the move to the cloud, Casa Systems is not yet seeing operators move to subscription pricing. Most still prefer a permanent license model, and they do agree to charge by session, charge by usage, but not a subscription.

Radio Unit development using its own chip

As well as its endeavours in the core, Guo says that the company has been working with T1 mobile operators on its 5G radio.

“For the 5G radio part our current focus is targeting large enterprise in-building [deployments], where there is a distributed RAN, as well as smaller femto solutions. Differently from some of the Open RAN vendors we provide our own Radio Unit using our own chip, not just the CU-DU part. We do also have a mini/macro 20W outdoor solution, but that’s a tougher space to compete with the incumbents.”

Radio chip and Radio Unit development is a hot current issue because of the drive for non-Chinese low cost vendors of Radio Units, something that has been identified as a missing piece of the Open RAN model – especially in the USA.

“We do see that as a positive movement for us, a good opportunity for us in North America and Europe,” Guo said.

Guo said that for its RUs, Casa Systems uses its own FPGAs that it develops in Massachusetts. “We have a history of developing PHY layer technology in the cable broadband market, so we have been happy doing PHY layer chip development for [radio] for over three years.”

CFO Scott Bruckner said that the company’s diversification away from its cable business has been understood by investors because it is not “opportunistic” but based on its existing “embedded” expertise.

“The expertise that we developed in cable networks have some similarities with wireless and some of the optical stuff we’re seeing in fixed telco. So that excited them, because they understand that the cable market has a very limited TAM –  our understanding is that it grows from about one and a quarter billion to 1.6 billion –  and that there’s an exponentially larger opportunity in the wireless side. Investors do like that we are becoming a diversified vendor and we probably score a lot of points as we begin to get traction and grow in particular in the wireless space.”

With Casa Systems sitting across the both cloud core and Open RAN space, does it see itself in a strategic environment, where hyperscalers such as Amazon, Google and Azure are looking for market entries?

“Incumbent players and those who have always seen opportunity in the space but don’t have organic capability are always looking for up and coming disruptive players to acquire. So we think that does continue. Players like Microsoft, Amazon, Google as well, that are playing at the edge, they’re playing in the cloud stack and as private networks begin to proliferate they are looking for communications capability at that edge.”