Great Q1, strong 2017, even without G.fast. Q1 is usually slow at Adtran, but they are actually up Q4 2016 to Q1 2017. It's 20% higher than Q1 2016. Deutsche Telekom is buying lots of vectored DSL, as is an American, I believe Century. AT&T is laying 3M lines a year of fiber home. NBN in Australia is finally gearing up with vectoring and G.fast. All buy from both Adtran and another vendor, so it's not easy to confirm which was the primary contributor.
Tom Stanton on the quarterly call was optimistic.
All the above customers intend to buy more equipment of the type Adtran is selling this year. He's expecting to do well, especially as G.fast and NG-PON2 start to produce revenue.
On G.fast, most of the companies are moving cautiously. British Telecom has passed 100,000 homes and looks to move quickly to 3M/year. (It's split between Nokia and Huawei.) Adtran's customer Bezeq in Israel is moving on G.fast. AT&T - Adtran's keystone customer - is enthusiastic about G.fast but not buying much equipment yet. Adtran's Mike Foliano is hopeful about announcements later in 2017, but thinks the ramp really starts in 2018. NBN is Australia is just beginning with a million lines of "fiber to the distribution point + G.fast," another growth prospect." An amazing 100 telcos around the world are trialing Adtran G.fast, many of which should produce revenue late this year.
Foliano also sees strong results soon on their 40 Gigabit (4 x 10 gigabit) NG-PON2. Adtran and Calix are in advanced lab trials and system integration at Verizon. NG-PON2 is the likely choice as Verizon moves to spend ~$20B bringing 5G small cells to 20-40M homes, about a third of the United States. This quarter, they will turn on 5G mmWave in 11 cities but in low volume. ~$5B of that will be a national fiber build likely to ramp up in 2018.
Adtran sees the tight integration of their gear and Open Source SDN as a key advantage. They are increasing spending for SDN and related software, working closely with AT&T and Verizon. They are very active in CORD-ONOS, alongside AT&T. Dozens of Adtran customers are using their MOSAIC SDN software. They have others in modest production deployments of CORD-ONOS, probably including AT&T. Very few are that far along in CORD-ONOS.
We are becoming a software company, Stanton is telling his people.
Adtran announced they have shipped 10M ports of vectored DSL. Their customer Deutsche Telekom is rapidly deploying vectored, but neither DT not anyone else has announced many vectored lines. I would be surprised if the world total reaches 10M, with Nokia and Huawei taking a share. That suggests at least one large carrier (?Century, AT&T) has been deploying vectored gear without offering that to customers. That wouldn't be surprising; in the past, companies like AT&T have waited on new offerings until they were widely deployed.
ADTRAN Surpasses its 10 Millionth Vectoring Port Shipment
ADTRAN’s domain expertise and industry leadership in vectoring solutions enables network operators to ramp 100Mbps service offerings to meet market demands
HUNTSVILLE, Ala.--(BUSINESS WIRE)--Mar. 14, 2017-- ADTRAN®, Inc., (NASDAQ:ADTN), a leading provider of next-generation open networking solutions, announced that it has shipped its 10 millionth vectoring port as network operators in the U.S. and Europe look to maximize any and all paths to ultra broadband service delivery. Crossing this milestone demonstrates how ADTRAN’s industry-leading access portfolio is having an immediate and long-term impact as networks scale and users demand increased capacity at work, home and play. ADTRAN’s market leadership has grown over the past four quarters as the company shipped now more DSL and VDSL2 vectoring ports in North America than all other vendors combined. VDSL2 vectoring is key to network operators’ broadband strategy to deliver 100Mbps services using their existing DSL infrastructure that may only provide 10Mbps service today. Ideal for urban deployments and multi-dwelling units, vectoring presents a scalable, highly leverageable approach to delivering ten times the DSL capacity, creating a truly immersive consumer experience that millennials and other tech-savvy consumers crave.
“To meet our customers’ broadband needs, we continue to innovate and provide higher speeds using both fiber and copper-based solutions. Having a proven technology that we can leverage with our current network infrastructure is ideal,” said Aamir Hussain, EVP and CTO for CenturyLink. “ADTRAN’s vectoring solutions help us maximize our network broadband speeds to meet the current and future needs of our customers.”
Vectoring boosts the installed network performance by increasing service speeds to 100Mbps using VDSL2 vectoring and to over 300Mbps using higher spectrum Super-Vectoring. More service providers are turning to this technology to sell high-speed services when time-to-market or economic hurdles prevent the deployment of new fiber. This network capability is becoming more critical as new guidelines in Europe and the U.S. change and become mandated for what bandwidth speeds constitute the definition of competitive broadband service.
“As regulatory commissions in the U.S. and Europe change the definition of broadband, vectoring technology is allowing carriers to achieve these higher speeds within their existing infrastructure. According to our research, VDSL2 vectoring shipments continue to accelerate, accounting for a growing portion of overall VDSL2 shipments each quarter,” said Teresa Mastrangelo, founder of Broadbandtrends. “Vectoring provides operators with the opportunity to offer FTTH-like speeds over copper lines, while providing the flexibility necessary to address the immediate time-to-market, competitive and regulatory challenges they currently confront.”
“ADTRAN’s vectoring solution is by far our fastest growing technology segment, shipping 10 million vectoring ports since introducing the solution to market and putting ADTRAN at the forefront of a technology that is quickly gaining worldwide adoption,” said Jay Wilson, senior vice president, technology and strategy for ADTRAN. “Service providers require the flexibility we provide to build the type of network that fits customers’ demands and business goals. By making it easier for service providers to leverage their current assets, ADTRAN ensures a smoother migration path from existing copper networks to full ultra broadband deployments across the globe.”