Entropic Execs: PLX Acquisition is a Roadmap to DBS’ Future Sat-IP Environment

[Satellite News 07-17-12] When Entropic Communications acquired direct broadcast satellite (DBS) intellectual property and corresponding technologies from PLX Technology last week, it was not only looking to complement its current DBS outdoor unit product portfolio and Multimedia over Coax (MoCA) business, but also seeking a future roadmap to the next developments in the DBS market as it transitions to Sat-IP.    
   Sat-IP is the conversion of satellite signals to Internet Protocol (IP) and then the distribution of those signals over an IP network to any IP-enabled client device. The Sat-IP standard, which has recently received a fair share of satellite operator SES’ attention, seems to be a natural direction for Entropics’ data connectivity business, which focuses on media transfers to the home using several different types of links – satellite, WAN or cable – and then throughout the home with MoCA-based solutions.
   Entropic Senior Vice President of Corporate Development and Strategy Vinay Gokhale and Senior Director of DBS ODU Products Sean Martin spoke with Satellite News about how the PLX technology acquisition will eventually lead to more business with satellite operators looking to capitalize on Sat-IP signal delivery.

Satellite News: When and why did Entropic decide to acquire this technology from PLX?
Gokhale: Initially, we had been eyeing digital CSS technology for several years from an intelligence and development perspective. When we were really putting the pen to the paper about two or three years ago, however, we found that we couldn’t justify the opportunity costs. The mixed signal resources that you need for this type of development were in short supply internally. So, we felt the competitiveness of our analog CSS solution was strong enough that we could wait things out a bit and we focused our resources on other opportunities that we have today in our MoCA business. As we progressed and were scanning the market for small tech start-up groups, we came across PLX and it ended up being a perfect fit in terms of our maturity with our analog CSS solutions, as well as the opportunity for our digital CSS. It’s a technology that we’re very familiar with. We’re looking now at rapidly commercializing the technology that we acquired. We’ve had really good feedback in the last week from service providers and OEMs. We’re now fully engaged with them.
Satellite News: How does this digital CSS technology change things on the end-user side?
Martin: The technology we acquired affords us to do a number of things, such as increasing the amount of channels and tuners that we can support to the home. Recent market trends show a demand for more tuner and viewing locations throughout the home. As the tuner count goes up, the price threshold starts to become more attractive to migrate from analog to digital. Therefore, it gives Entropic a means of being more cost effective to our customers as the market makes that migration.
Satellite News: In the acquisition announcement, you mentioned that the deal would expand your relationship and opportunities with satellite operators. How so?
Gokhale: We’ve had a very long history within the satellite industry providing silicon products for broadcast transmissions throughout the home, dating back to our first band translation switch product, which is deployed by our ecosystem of service providers, including satellite firms like EchoStar and Dish Network. Since then, we’ve migrated that technology into analog channel stacking switches (CSS), which we’ve been shipping for the past four years and primarily deployed to DirecTV, who has helped us proliferate that technology into other Sky properties, such as Sky Brazil. The acquisition we made focuses on the next generation of CSS technology – from analog CSS to digital CSS, which we see as a stepping-stone into the Sat-IP opportunities that a lot of the companies in the satellite industry are talking about.
Martin: The acquisition was, in essence, a future roadmap consideration. The ability to process a signal digitally enables us to do things like provide a front-end technology that would be necessary for IP or DBS-to-IP initiative. This is a critical and important stepping stone as we look at these new market evolutions.
Satellite News: Are satellite operators preparing for the approach to DBS-IP conversion in the same way as Entropic?
Martin: The critical thing is that satellite operators are now exploring the benefits of having an IP backbone in the home and how quickly they can transition the signal from a satellite channel format into an IP format. There are a number of ways that they can do that. Some of the operators, however, are looking to do this at the Low Noise Blockconverter (LNB) level itself. And so, the key technologies available to do that are the A-to-B types of solutions that we acquired with this PLX technology asset purchase. The opportunity with our acquisition of Trident’s DVB-S demodulator and MPEG technology, coupled with our own MoCA IP distribution systems, gives us a competitive set of core technologies that we can bundle and integrate. We can then take that bundle to the satellite operators as a cost-effective way of making that Sat-IP conversion. We’ll be providing our vision of how this architecture going into the house will change. We believe we’ll be able to offer market-leading solutions as Sat-IP evolves.
Satellite News: SES has been actively involved with Sat-IP research. Have you worked with them on this effort?
Martin: We meet with SES quite frequently and work very closely with them. We attended an SES event this past April. We were one of the companies that were invited to present technology. We have been doing this for the two years – not only providing our content, but our view of the market. We work also with SES on the Sat-IP standards activity that is underway. We spend a lot of time, energy and effort making sure that the standards that support single-cable deployment are the most robust and mature.”
Satellite News: Do you think Sat-IP will be a platform that will begin its growth in developing or developed markets?
Gokhale: Even though satellite operators are doing very well against cable operators in the developing markets, the costs that subscribers are willing to pay are far less than in developed markets. In addition to that, the penetration of HD is far less. For example, the average HD penetration for satellite operators in South America is around 20 percent, but that figure is much higher in developed markets like the United States.
Martin: The rest of the world, at this point, seems better suited for traditional technologies. I do think they will eventually require advanced technologies like what we’ve acquired with PLX, but only after following the growth in developed markets.

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