ADC Makes Dramatic Comeback at AT&T at CommScope’s Expense

Implications: 1.      Everything indicated that CommScope was poised to totally take over AT&T’s connector business. 2.      It seemed only a matter of time when ADC was going to lose the entire account. 3.      To its credit, ADC, made the necessary changes and will wind up getting a higher share of the RBOC’s expenditures at AT&T in 2008 than originally estimated.

Analysis:  It seemed like an increase close to 40 percent over last year in terms of sales to AT&T by CommScope was in the bag.  Now that projected rise at the RBOC for 2008 appears to cut down to almost a third of the initial estimate.  While the reaction to the decrease in growth will likely center on the weakening economy, much of the change has to do with ADC making critical adjustments in fighting to keep a major customer.  

ADC made some key changes in the top leadership to put veteran talent in overseeing its critical business with the RBOCs.  And a short time ago, the supplier started to make a concerted effort to really listen to the needs of these customers.  The efforts have paid off with a noticeable increase in sales to AT&T in recent weeks.  

It is a blow to CommScope, which was hoping to build on what was perceived to be a dominant position at AT&T to make further inroads into the overall RBOC space.  Now the stakes will be higher in as the supplier attempts to take advantage of its impressive development of new cabinets to get the Bellheads to buy more of its products.   

The real reminder with all of these developments is to never – ever – count out an incumbent supplier in the public telecom equipment market.