CommScope Holding Company Stock

CommScope Holding Company, Inc. operates as a global provider of infrastructure solutions for communication, data center and entertainment networks.

The company’s solutions for wired and wireless networks enable service providers, including cable, telephone, data center and digital broadcast satellite operators and media programmers, to deliver media, voice, Internet Protocol (IP) data services and Wi-Fi to their subscribers and allow enterprises to experience constant wireless and wired connectivity across complex and varied networking environments. The company’s solutions are complemented by services, including technical support, systems design and integration. It operates as a leader in digital video and IP television (IPTV) distribution systems, broadband access infrastructure platforms and equipment that delivers data and voice networks to homes. The company’s global leadership position is built upon innovative technology, broad solution offerings, high-quality and cost-effective customer solutions, and global manufacturing and distribution scale.

The company serves its customers in over 150 countries through a network of world-class manufacturing and distribution facilities strategically located around the globe. The company’s customers include substantially all the leading global telecommunications operators, data center managers, cable television providers or multi-system operators (MSOs) and thousands of enterprise customers, including many Fortune 500 companies. The company has long-standing, direct relationships with its customers; and serves them through a direct sales force and a global network of channel partners.

Segments

The company operates through five segments: Connectivity and Cable Solutions (CCS); Outdoor Wireless Networks (OWN); Networking, Intelligent Cellular and Security Solutions (NICS); Access Network Solutions (ANS); and Home Networks (Home).

CCS

This segment provides fiber optic and copper connectivity and cable solutions for use in telecommunications, cable television, residential broadband networks, data centers and business enterprises. The CCS portfolio includes network solutions for indoor and outdoor network applications. Indoor network solutions include optical fiber and twisted pair structured cable solutions, intelligent infrastructure management hardware and software and network rack and cabinet enclosures. Outdoor network solutions are used in both local-area and wide-area networks and ‘last mile’ fiber-to-the-home installations, including deployments of fiber-to-the-node, fiber-to-the-premises and fiber-to-the-distribution point to homes, businesses and cell sites.

OWN

This segment focuses on the macro and metro cell markets. The segment includes base station antennas, radio frequency (RF) filters, tower connectivity, microwave antennas, metro cell products, cabinets, steel, accessories and the company’s wireless spectrum management business, Comsearch.

NICS

This segment provides wireless networks for enterprises and service providers. Product offerings include indoor and outdoor Wi-Fi and long-term evolution (LTE) access points, access and aggregation switches; an Internet of Things (IoT) suite, on-premises and cloud-based control and management systems; and software and software-as-a-service applications addressing security, location, reporting and analytics.

ANS

This segment’s product solutions include cable modem termination systems (CMTS), video infrastructure, distribution and transmission equipment and cloud solutions that enable facility-based service providers to construct a state-of-the-art residential and metro distribution network.

Home

This segment includes subscriber-based solutions that support broadband and video applications. The broadband offerings in the Home segment include devices that provide residential connectivity to a service provider’s network, such as digital subscriber line and cable modems and telephony and data gateways which incorporate routing and Wi-Fi functionality. Video offerings include set top boxes that support cable, satellite and IPTV content delivery and include products, such as digital video recorders, high definition set top boxes and hybrid set top devices.

Strategy

In 2021, the company announced a transformation initiative, CommScope NEXT, designed to drive stockholder value through three pillars include profitable growth, operational efficiency and portfolio optimization.

Customers

The company’s customers include substantially all the leading global telecommunications operators, data center managers, cable television providers or MSOs and thousands of enterprise customers, including many Fortune 500 companies. Major customers and distributors include companies, such as Altice USA, Inc.; America Movil, S.A.B. de C.V.; AT&T Inc.; Charter Communications, Inc.; Comcast Corporation (Comcast); Cox Communications, Inc.; Graybar Electric Co. Inc.; KGP Co.; Liberty Media Corporation; Power & Telephone Supply Co.; Purchase Power Exchange LLC; Talley Inc.; T-Mobile U.S. Inc.; Verizon Communications Inc.; Vodafone Group PLC; and Wesco International, Inc. (including Anixter International Inc.).

Products from the company’s CCS segment are primarily sold directly to cable television system operators, broadband operators and other service providers that deploy broadband networks. CCS segment products are also sold through independent distributors or system integrators for large telecommunication operators.

Products from the company’s OWN segment are primarily sold directly to wireless operators, original equipment manufacturers (OEMs) that sell equipment to wireless operators and other service providers that deploy elements of wireless networks at the direction of wireless operators. Its customer service and engineering groups maintain close working relationships with these customers due to the significant amount of customization associated with some of these products. Although the company sells to most wireless operators globally, it is dependent on a small number of large operators.

Products from the company’s NICS segment are primarily sold through independent distributors or system integrators for large telecommunications operators and to customers in a broad range of enterprise vertical markets, including hospitality, education, smart cities, government, venues and service providers indirectly through channel partners. The company also sells directly to cable television system operators, broadband operators and service providers that deploy broadband networks. In certain circumstances, it sells NICS segment products directly to end customers, but it is a relatively small part of the overall business.

Products from the company’s ANS segment are primarily sold directly to wireline network service providers, such as telephone companies and cable television network providers, to be deployed into their service delivery networks. In some cases, the company sells through specialized resellers and distributors who primarily provide logistics support and in certain circumstances post-sale service and support. The company’s customer service and engineering groups maintain close working relationships with these customers due to the significant amount of customization associated with some of these products. It sells these products to most of the wireline and satellite operators globally.

Products from the company’s Home segment are primarily sold directly to wireline network service providers, such as telephone companies and cable television network providers, to be deployed by them into their subscribers’ homes and businesses. The company sells some products to satellite video distributors who also deploy its products into their subscribers’ premises. In some cases, it sells through specialized resellers and distributors who primarily provide logistics support and, in certain circumstances, post-sale service and support. The company’s customer service and engineering groups maintain close working relationships with these customers due to the significant amount of customization associated with some of these products. The company sells these products to most of the wireline and satellite operators globally. In the United States (U.S.), it also sells certain products directly to consumers over the internet and through brick and mortar retailers.

Competition

Major competitors by segment include the following:

CCS: The company’s competitors include Amphenol Corporation; Belden Inc.; Clearfield, Inc.; Corning Inc.; and Sterlite Corporation.

OWN: The company’s competitors include Comba Telecom Systems Holding Ltd.; Huawei Technologies Co., Ltd.; Rosenberger NA; and Telefonaktiebolaget LM Ericsson.

NICS: The company’s competitors include Cisco Systems, Inc.; Comba Telecom Systems Holding Ltd.; Corning Inc.; Extreme Networks, Inc.; Hewlett Packard Enterprise Development LP; Huawei Technologies Co., Ltd; JMA Wireless; Juniper Networks, Inc.; SOLiD, Inc.; and Ubiquiti Inc.

ANS: The company’s competitors include ATX Networks Corp.; Casa Systems, Inc.; Cisco Systems, Inc.; Harmonic Inc.; Technetix Group Ltd.; Teleste Corporation; and Vecima Networks Inc.

Home: The company’s competitors include Humax Co., Ltd.; Kaonmedia Co., Ltd.; Nokia Oyj; Sagemcom Broadband SAS; Vantiva SA.; and ZTE Corporation.

Research and Development

For the year ended December 31, 2022, the company invested $657.4 million in research and development.

Seasonality

The company’s operating performance is typically the weakest during the first quarter (year ended December 31, 2022), and this pattern is expected to continue in the future.

Patents and Trademarks

On a worldwide basis, as of December 31, 2022, the company held over 16,000 patents and patent applications and approximately 3,000 registered trademarks and trademark applications. Over the next five years, approximately 2,100, or about 19%, of the company’s issued patents will expire, while at the same time it intends to seek patents protecting new innovations. The COMMSCOPE, ARRIS, SURFBOARD, RUCKUS, SYSTIMAX, NETCONNECT, NOVUX, ERA, ONECELL and HELIAX trade names and related trademarks are critical assets to the company’s business.

History

CommScope Holding Company, Inc. was founded in 1976. The company was incorporated in Delaware in 2010.