Adtran Potentially Could Become Verizon’s Second PON Vendor

Implications: 1.      If Adtran had to do it all over again, it would have thought twice about pursuing GPON. 2.      The activity caused the supplier to get behind on its overall product development. 3.      If Verizon chooses Adtran, it is likely that it will generate scant margins similar to the previous Tellabs situation.

Analysis:  The reason why “a formal product announcement has been elusive until now” is that developing a GPON product is really difficult.  Alcatel-Lucent always had an advantage over the rest of the market in that the French part of the company anticipated a move to FTTH well before it became apparent. 

Adtran’s GPON will be more in support of its TA 5000 business with Verizon, than a moneymaker by itself.  The really important question is whether Adtran will eventually becomes the primary GPON vendor with Alcatel-Lucent in more of a backup role.  Certainly, the comments by the executive in the source article portend a potential threat to AlcaLu’s position at the RBOC.  While anything is possible, it si highly doubtful that Adtran will make any meaningful penetration into the RBOCs anytime soon. 

In the independent telco market, Calix is most likely facing the biggest threat to date to its dominant position in the access space.   

Adtran is being somewhat disingenuous in stating, “it wanted to get its [GPON] product right the first time and not have a partially compliant product.”  The supplier appeared to be struggling for a length period of time to make the solution workable.