Adtran’s Stanton: Fiber will be a key component of 5G deployments


Adtran’s CEO is not afraid of the Tier 1 carrier’s 5G plans eclipsing its last mile business because these deployments will require one common assetfiberand lots of it.

Although it’s still unclear as to when 5G services will be widely available in a pre-standard or standard fashion, Tom Stanton is confident their products will be large part of the mix.

“In all those cases, I see fiber access as being a fundamental component because of the bandwidth being required and the endpoints being terminated,” Stanton said.

RELATED: Adtran ships 10M vectored DSL ports

Stanton’s comments come as Verizon signed a $1.1 billion, three-year fiber and hardware purchase agreement with Corning, enhancing capacity to support a next-generation fiber platform that will support all of the company's businesses.

Verizon is also conducting an ongoing NG-PON trial with Adtran, Calix and Ericsson. Adtran and Ericsson/Calix were chosen out of a group of six vendors that competed in the RFP.

Verizon has not chosen the winners of the trial it will use for its NG-PON2 network; Stanton says Adtran is in a good position to potentially get a piece of the service provider’s backhaul business.

Stanton said in response to a financial analyst’s question that “that carrier you mentioned is driving an NG-PON2 RFP process, which is an integral part of their mobility strategy.”

He added that “our mobility access capability we added to our Mosaic cloud platform to address mobility and the future implementation of 5G and they are very much additive and complementary to each other.”, vectoring progressing

But 5G is only one opportunity that Adtran is chasing.

The vendor is progressing with Tier 1 deployments of its in the U.S. and vectoring product sets to deliver higher speed broadband in a hybrid copper/fiber network implementation.

Stanton said that the vendor’s Tier 1 and vectoring rollouts are progressing smoothly in the United States and abroad.  

“We have a Tier 1 buildout that’s in region and out of region and all of that is on track,” Stanton said. “We expect to see some revenue before the first half of this year.”

While Stanton did not call out a specific customer, CenturyLink revealed plans last May to reach 14 million households with 100 Mbps over copper via vectoring, for example.

Adtran also expects to see another one of its Tier 1 customers ramp its deployments later this year. Overall, U.S. service provider interest in has increased over the past year with AT&T, CenturyLink and Windstream all conducting trials or targeted pilot deployments.

“We expect to see some shipment with our customer in the second quarter and see that ramp towards the end of the year,” Stanton said. “It’s one that we don’t have good visibility into because they tend to be flexible in the way they forecast and schedule things.”

Finally, Stanton said that while he “expects an award for the NG-PON2 RFP this year, but we don’t expect to see material roll outs until next year.”

Access wins bolster revenues

Due to an uptick in fiber to the premises (FTTP) and vectoring shipments, Adtran saw Network Solutions and Services & Support revenues rise during the quarter. Network Solutions were $144 million, up from $123 million, while Services & Support jumped to $27 million.

Likewise, Access and Aggregation had another good showing in the first quarter, rising to $120 million, up from $116.3 million in the first quarter of 2016.

From a regional perspective, the United States continued to lead with $119.2 million in revenues, a year-over-year increase from $116.3 million in the same period a year ago.

Stanton noted that the overall performance “in our fiber to the premises and vectoring products in both our domestic and international markets.” 

Adtran reported revenues for the first quarter were $170.3 million, up from $142.2 million for the first quarter of 2016.

Earnings per share (EPS), assuming dilution, were 14 cents compared to 10 cents for the first quarter of 2016. Non-GAAP earnings per share were 18 cents compared to 14 cents for the first quarter of 2016.