Summary
1. If Tellabs is really serious about getting growth numbers that are better than predicted, it is either going to need to develop new solutions and/or make acquisitions. 2. As we have stated in the past, we believe the supplier is working on a broadband cross-connect. 3. In any event, it is refreshing for a supplier these days to give such a high level of detail on its visibility.
Analysis
As the source article points out, “Tellabs is still mostly a declining business.” However, it is a good sign “that the company was reviewing acquisition opportunities....” One should not expect a “radical” choice,” as contemplated by Light Reading. “Making a move for a company like Starent Networks,” as the publication suggests, would seem to be far outside its core competency. (Although if Verizon Wireless was interested in getting Starent a firmer foundation, it might encourage Tellabs to pick it up.)
It is not surprising that the Tellabs “crystal ball team,” as characterized by Light Reading was on target with its forecast. The management at the company believes in very conservative expectations. It is that same cautious mentality that it will ensure that if Tellabs does acquire another supplier, it will not do it precipitously and there will be an exhaustive examination of the vendor.
