IBC 2011 — U.K. cableco Virgin Media announced that it is adding Samsung as a second supplier for its TiVo-enabled set-top boxes, effectively eliminating Cisco Systems Inc.'s exclusive relationship with the pay-TV operator for the STBs. Cisco, however, is unfazed, calling the move "expected" and understandable.
"Quite the feeding frenzy this week over an expected bit of news about our partner, Virgin Media, and its supply chain plans for digital set-top boxes! Yeesh," wrote Everth Flores, director and general manager for service providers in EMEA, in a blog. He added, "To our competition: Bring it."
Cisco has long manufactured and supplied TiVo-based digital set-top boxes to Virgin, as well as to Ono in Spain, on a sole-supplier basis. Flores said that Cisco never expected the exclusivity to last, as demand ramps up for the next-gen STBs. Cisco had a "certain understanding that Virgin, like any sensibly minded operator, would at some point introduce a second source," he said. And in fact, the plan to add a second source is no secret – the Samsung deal has been publicly disclosed for some time now.
He also stressed that the Samsung deal is merely additive for Virgin Media, and will have no impact on Cisco's current level of business with the MSO.
"No one was ejected, no one was axed, no contracts expired," he said. "As un-sexy as it may sound, this was quite simply a second source supply decision, wholly anticipated by everyone involved."
