Sponsored By

Adtran Will Be a 5G Winner, Says AnalystAdtran Will Be a 5G Winner, Says Analyst

Broadband vendor's NG-PON2 technology could have a major role to play in the 5G networks that service providers are building.

Iain Morris

July 19, 2018

3 Min Read
Adtran Will Be a 5G Winner, Says Analyst

Broadband equipment vendor Adtran is in a strong position to profit from forthcoming investments in higher-speed mobile networks thanks to the attractions of its NG-PON2 portfolio, according to a leading analyst.

MKM Partners' Michael Genovese, who maintains a "buy" recommendation on Adtran's stock, reckons NG-PON2 has a role to play in the backhaul and fronthaul parts of future 5G networks. Adtran Inc. (Nasdaq: ADTN), which published earnings Wednesday (for an in-depth look at the numbers, read this story on Broadband World News, our sister site), is one of several broadband technology vendors that have been at the forefront of NG-PON2 development.

For anyone in the dark, NG-PON2 is a next-generation broadband standard that can support between four and eight 10Gbit/s wavelengths over a single fiber. It features in the broadband plans of some of the world's biggest operators, including the likes of Altice and Verizon Communications Inc. (NYSE: VZ) in the US. (See Service Provider Split Emerges Over NG-PON2 Upgrade.)

Backhaul, for those still in the dark, is the connection between a mobile site and the core network. Wireless microwave technology is sometimes used here, but fiber is much better when there is a lot of high-speed mobile data traffic at play. (See Altice Backs NG-PON2 to Enable 5G.)

Altice is already planning to use NG-PON2 technology in this part of its future 5G networks. Indeed, at a conference in Valencia earlier this year, José Salgado, a network system development manager at Altice Labs, went as far as saying that "5G will be the most important driver for NG-PON2."

Want to know more about 5G? Check out our dedicated 5G content channel here on
Light Reading.

Salgado reckons NG-PON2 could be even more valuable in the 5G fronthaul -- the link between a remote radio head and the baseband unit that processes radio signals. Traditionally, these elements have all been housed at the mobile site. With virtualization of the radio access network, operators could do their baseband processing at data centers, using NG-PON2 for the connections between those facilities and the radios left at the mobile site.

Genovese also thinks Adtran is poised to land additional business with telcos and cable operators in the US. And he lauds the company's efforts to land deals with international players other than Deutsche Telekom AG (NYSE: DT), which has historically used Adtran's equipment in Germany.

"There is stability-to-growth with US Tier 1 customers, strong 2H18 growth in the Tier2/3 market and a new, very positive opportunity with cable MSOs [multiple system operators]," he said in a research note. "Adtran is also diversifying its international business beyond just one key large account."

All of this will sound welcome to investors. Hit by a downturn in the market for network equipment, Adtran swung to a net loss of $7.7 million in the recent second quarter, from a net profit of $12.4 million a year earlier, and its sales were down 31%, to $128 million.

— Iain Morris, International Editor, Light Reading

Read more about:


About the Author(s)

Iain Morris

International Editor

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like