Telecom vendors Adtran and ADVA already felt like they had a compelling case for a tie-up when the former announced plans to acquire the latter in August. But the companies now believe their total addressable market (TAM) could be nearly double the $7.1 billion figure previously touted thanks to an influx of government funding for new broadband rollouts.
Adtran’s SVP of Technology and Strategy Robert Conger and ADVA SVP of Marketing and Investor Relations Stephan Rettenberger told Fierce the original $7.1 billion TAM figure included an expected $1.6 billion opportunity to capitalize on efforts to replace Huawei gear in existing networks around the world. The companies now believe broadband funding in the U.S. and Europe will provide a significant incremental opportunity on top of that, to the tune of $5.1 billion, they said.
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Coupled with an expected $1.5 billion opportunity to increase Adtran’s share in other global markets, the companies now believe their TAM will reach $13.7 billion over the next three to four years.
In the U.S., Conger said “what’s really unprecedented is just the amount of federal stimulus funding going to connect” underserved markets which are traditionally a stronghold for regional service providers. Between the recently passed infrastructure bill, the Rural Digital Opportunity Fund and the American Rescue Plan Act, Conger said somewhere in the ballpark of $100 billion is expected to be put toward broadband deployments in the country in the coming years.
He noted Adtran already has a “very successful track record” with regional U.S. operators, but said the addition of ADVA’s technology will flesh out its portfolio to allow it to offer an end-to-end system and be more competitive.
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ADVA’s strong presence in Europe will also help accelerate Adtran’s efforts to grow across the pond. “We’re having a good bit of success, but to really scale that to all of Europe we’re going to need more infrastructure, support and services. And again, ADVA already has that,” Conger said. “They’re a larger immediate presence than we have, they already have the people, the infrastructure, services, support organizations and stuff in the countries in which we see a lot of growth opportunities.”
Beyond near-term gains in the U.S. and Europe, Rettenberger said the pair are also eyeing growth in Australia and New Zealand.