AT&T buys Ribbon's router for copper transition

Ribbon Communications announced that, after two years of work, its Neptune IP Router is now live inside AT&T's network.

"We have been working with AT&T on a number of use cases that leverage the Neptune platform to replace older routing platforms and to transition TDM and copper networks to modern IP technology," explained Ribbon CEO Bruce McClelland during his company's quarterly conference call this week, according to Seeking Alpha. "This will enable AT&T to significantly reduce costs and simplify their network, eliminating legacy transport networks and wiring centers over time while maintaining existing residential and business service offerings as well as helping to achieve environmental sustainability goals."

The move comes as AT&T works to upgrade much of its legacy copper footprint to fiber. During its most recent quarterly earnings report, AT&T said it added another 296,000 new fiber customers to its network, which now covers 24 million locations. The company said it remains on track to expand that number to 30 million by 2025.

Importantly, McClelland said Ribbon's deal with AT&T would likely grow into a major opportunity for the company. "We are in ... early deployments now and deploying in a number of additional locations through the end of the year," he said. "Ultimately, these are tens of millions of dollars of opportunities for us, obviously, potentially larger as we expand the number of use cases and really prove ourselves in the network."

According to the financial analysts at B. Riley Securities, the company's deal with AT&T "could become a significant opportunity."

IP and optical growth

Ribbon sells communications software, IP and optical networking solutions to service providers, enterprises and others globally. The company's IP Optical Networks division generated $87 million of the company's overall $203 million in quarterly revenues. And McClelland has high hopes for the business.

"IP Optical Networks sales have increased 14% year-to-date and were up 6% in the third quarter with approximately 50% sales growth in India, the US, and Japan," he said in a statement. But he acknowledged a substantial dip in sales in the company's Europe, Middle East and Africa region, which he attributed to operators' excess inventory and macroeconomic headwinds.

Regardless: "Adding AT&T into the pipeline is a major event for us," McClelland said on the company's quarterly call. "That solution we are using there really fits well to other carriers, large and small, and there is a great way to enter into these accounts. So, I think we will have more to report on that as we get further along in the pipeline with some of those."

India's Bharti Airtel also uses Ribbon's routers.

McClelland moved into a leadership role at Ribbon Communications in 2020. The company was created in 2017 via the combination of Sonus and Genband, and bolstered by the subsequent acquisition of ECI Telecom Group.

In the packet optical business, Ribbon competes against the likes of Ciena, Nokia, Huawei, ZTE and Cisco.