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Adtran Adds GPON

Raymond McConville
News Analysis
Raymond McConville
4/2/2008
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At long last, Adtran Inc. (Nasdaq: ADTN) is getting Gigabit PON (GPON).

The company has been saying it plans to offer GPON linecards for the Total Access 5000 since the platform came out in 2006. (See Adtran Touts Total Access.) But a formal product announcement has been elusive until now.

Adtran is hoping that since the 5000 is already widely deployed in carrier networks for other applications, many will turn to the company for GPON, due to the relative ease of being able to upgrade without ripping equipment out of the network.

Adtran says it'll be targeting its new GPON product in the market it is most widely deployed in and most familiar with: North America. For those of you keeping score at home, that includes Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T) -- two companies that happen to have already selected their GPON vendors. (See AT&T Picks GPON Players and Alcatel Joins Verizon PON Party.)

If you've got the feeling that something doesn't quite add up there, you're not alone. But Adtran isn't fazed by what appears to be a locked-up market.

"I'd liken it back to 2000 or 2001 when Alcatel had locked up all the RBOCs for DSL," says Mike Martin, director of product marketing for the carrier networks division at Adtran. "Everyone said that business was gone. Adtran came out with the Total Access 3000 and was able to penetrate the DSL marketplace in all three RBOCs and get number in market share.

"Just because the first wave of rollouts on GPON have already been awarded and have moved forward, I don't think it knocks us out of the market in North America."

CLECs have shown interest in GPON, but even there, Adtran is entering a market already populated by competitors like Calix Inc. (NYSE: CALX) and Occam Networks Inc. (Nasdaq: OCNW).

But Adtran thinks the flexibility of its Total Access 5000 to support both TDM and newer fiber services, and the fact that it's built around an all-Ethernet core, will be enticing enough for carriers. Its GPON cards are interoperable with other standards-based gear, but Adtran admits that real interoperability is still hard, which may prevent this from being a marketable feature for some time.

"In terms of actually turning up a working customer end-to-end, interoperability is tough to achieve," Martin acknowledges. "So far, most people use OLTs [optical line terminals] and ONTs [optical network terminals] from the same vendor."

The GPON move goes along with Adtran trying to shed its reputation as a TDM-based company. "While we do own marketshare for HDSL in North America, we have been constantly growing our product portfolio," says Martin.

Martin notes that there's a lot of talk among carriers about eliminating ATM and TDM from their networks and switching to Ethernet, which is why Adtran is preaching the Ethernet core of its Total Access 5000. "All of our services, regardless of their protocol, are converted directly to Ethernet."

Still, the timing of this GPON release is curious. Having had deep relationships with all the major telcos in North America, Adtran could have been in a great position to grab a sizeable chunk of the initial GPON vendor contracts handed out by AT&T and Verizon. So why put it off for so long?

Adtran says it wanted to get its product right the first time and not have a partially compliant product it would have to change after deploying. Martin even says that the timing of its release is optimal because it allowed for widespread deployment of the Total Access 5000 in its customer base, which is now ready for GPON.

"There will be a lot more waves of GPON deployment ahead of us if we're going to become a fiber-based society," says Martin.

— Raymond McConville, Reporter, Light Reading

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