People watch more TV in a recession: David Baum, co-founder of CopperGate.The digital home is in, and that’s good news for Israeli company CopperGate Communications, which has recently reported “explosive global growth” despite the world’s poor economy.

The company’s chip technology, for home entertainment networks and multi dwelling unit applications, is today the most widely deployed for in-home IPTV, (Internet Protocol TV) over existing coaxial wiring, power and phone lines.

Customers include blue chip companies such as Motorola, Cisco, and 2-Wire, and four out of five of the biggest telecom companies in North America. A major project is also underway in Shanghai that will reach one million residences by 2010.

Industry analyst, Steve Rago predicts that the market for chips needed to deploy IPTV will triple in the next 18 months alone. CopperGate’s chipsets are already installed in over 800,000 homes and are being installed in over 100,000 new homes every month. The average home is typically installed with four chips.

Triple-play services over existing lines

CopperGate’s strength is that its chips allow service providers to deliver their “triple-play” services, including HDTV, VoIP and Internet services, over a homeowner’s existing wires. The eight-year-old company claims it is the only company now on the market that can do this.

“CopperGate was the first company to provide high speed, multi-media networking inside the home over existing coax cables,” David Baum, co-founder and worldwide VP of marketing tells ISRAEL21c.

“With CopperGate’s standard-setting technology, viewers can simultaneously watch the same or a different movie on high definition screens in different rooms, at the same time other people in the home use computers to gain high speed access to the Internet and talk on VOIP-based phones,” he explains.

“Alternative technologies haven’t worked for home entertainment networks,” adds Michael Weissman, who is responsible for North American marketing at CopperGate. “Ethernet (CAT-5) is expensive to install in a home and wireless is not reliable for deploying IPTV over an entire house. CopperGate’s HomePNA solution reliably runs over the existing wires – saving service providers hundreds of dollars for each installation.”

Baum believes CopperGate’s chips are the fastest on the market – reaching as high as 320 Mbit/s (megabits per second) – substantially faster than wireless networks. The company, founded in 2000, is also cooperating on the next generation open standard for home entertainment networks being developed in the ITU (International Telecommunications Union) called g.hn.

This new standard will deliver triple the performance of current solutions – up to 1 gigabit per second of performance. These chips will run over power lines, phone lines and coax. Expected on the market within a year, the chip will enable digital media and appliances to talk to each other over power lines.

Telecom companies exploit new markets

For telephone companies, which have been losing lines at the rate of 10 percent each quarter, CopperGate’s technology is a major boon. They are eager to exploit a new market without having to provide new lines. It’s not surprising then that in September, TELUS, a leading Canadian telecom, selected CopperGate technology to deliver its IPTV-based digital entertainment services.

The same month, CopperGate announced another agreement with B-Star, an engineering research center for broadband technology and applications, in Shanghai. CopperGate’s technology will be used by B-Star to transform cable TV networks in MDU’s to high speed, interactive digital in Shanghai’s Jiading district. B-Star’s initial roll out was to 10,000 residents. The target is one million by 2010.

This May, CopperGate, which has an office for marketing and support in Newark, California; a branch office in Taiwan, and representatives in China, Korea, and Japan, purchased Conexant Systems’ HomePlugAv technology which is needed for power lines. The company hopes that the technology increases CopperGate’s marketability in the European telecom market, where power lines are used.

CopperGate is a private company. Its prime investors are Tamir Fishman Ventures, Carmel Ventures, Motorola Ventures, and the Challenge Fund. “What is special about us?” asks Baum. “Unlike other companies that raised four times more, $80 to $100 million, we are profitable and more efficient.”

“The financial slowdown may be good for the company,” he adds. “People may cocoon more, and watch more TV; and, while service providers will spend less on capital investments, they will have an incentive to get more out of the investments they already have.”