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Is AlcaLu's FiOS Share Slipping?

Motorola Inc. (NYSE: MOT) shares are up 6 percent today on word that the company could be getting an increased role in the Verizon Communications Inc. (NYSE: VZ) FiOS buildout.

Alcatel-Lucent (NYSE: ALU) appears to be losing share as Verizon chooses to use more of Motorola's gigabit passive optical networking (GPON) equipment, analyst George Notter of Jefferies & Company Inc. writes in a note published this morning.

While AlcaLu and Motorola were both selected for FiOS in 2006, AlcaLu got deployed first and was understood to be Verizon's primary GPON vendor. (See Alcatel Joins Verizon PON Party.)

But Motorola could have a 50 percent share of FiOS's GPON purchases within a couple of quarters, Notter writes, adding, "We had anticipated that Motorola would remain a distant second source in the deal."

Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) was also selected but dropped out last year. The decision, as CEO Rob Pullen told Light Reading, came down to Verizon's requirement for combining the optical line terminal (OLT) with a service router -- a tall order in a business segment that's not wildly profitable to begin with. (See Tellabs Kills Its Verizon GPON Efforts and Rob Pullen, CEO, Tellabs.)

AlcaLu won't comment on the market share picture, but a spokeswoman notes that Verizon had always intended FiOS to be a multi-vendor network. "We did a substantial amount of work with them in 2008 and we intend to do a substantial amount in 2009," she says. AlcaLu shares were trading unchanged at $1.86 each mid-afternoon, while Motorola shares were up 23 cents (6%) at $4.11.

Separately, Notter thinks AT&T Inc. (NYSE: T) is ready for a second vendor for Project Lightspeed, the broadband buildout that drives the carrier's U-verse TV service. Adtran Inc. (Nasdaq: ADTN) "may be well positioned" for the $50 million to $75 million-a-year opportunity, Notter writes. Other names being mentioned are Ericsson AB (Nasdaq: ERIC) and Huawei Technologies Co. Ltd.

— Craig Matsumoto, West Coast Editor, Light Reading

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danp5648 12/5/2012 | 4:12:12 PM
re: Is AlcaLu's FiOS Share Slipping? "Verizon's requirement for combining the optical line terminal (OLT) with a service router -- a tall order in a business segment that's not wildly profitable to begin with"

Verizon's tall order can only be done by Enablence. Enablence is now the top performer in a segment filled with dashing hopes.

^Eagle^ 12/5/2012 | 4:12:10 PM
re: Is AlcaLu's FiOS Share Slipping? danp...

are you a comedian? or an investor in enablance? or one of the sales / marketing guys? maybe you should become a bit more sophisticated in how you push and pump your interests. Like real data and concrete information. Not just claims and bold statements.

sailboat
mgardner750 12/5/2012 | 4:12:09 PM
re: Is AlcaLu's FiOS Share Slipping? You have forgotten the true leader in the GPON that nobody notices, TXP. They have a superior GPON ONT that works with several major vendors OLT.

Perhaps Enablence should buy TXP out of bankruptcy to solidfy their position.


paolo.franzoi 12/5/2012 | 4:12:08 PM
re: Is AlcaLu's FiOS Share Slipping?
Correction - They have bought everybody else who had no actual business.

seven
DCITDave 12/5/2012 | 4:12:08 PM
re: Is AlcaLu's FiOS Share Slipping? re: "the true leader in the GPON that nobody notices, TXP"

Might there be a reason nobody has noticed?
JaguarsPaw 12/5/2012 | 4:12:08 PM
re: Is AlcaLu's FiOS Share Slipping? Why not. They've bought everyone else.
paolo.franzoi 12/5/2012 | 4:12:01 PM
re: Is AlcaLu's FiOS Share Slipping?
Verizon ego system?

You mean Verizon ecosystem? Enablence bought Motorola or Alactel or Cisco or Juniper (Cicso for some SA things, Juniper does Edge Routers for FiOS)?

Light Reading - Where the heck have you been? You completely missed out on these acquisitions!

seven
mgardner750 12/5/2012 | 4:12:01 PM
re: Is AlcaLu's FiOS Share Slipping? re: "the true leader in the GPON that nobody notices, TXP"

Phil: Might there be a reason nobody has noticed?

Clearly TXP hasn't been noticed because they don't advertise on Light Reading.
danp5648 12/5/2012 | 4:12:01 PM
re: Is AlcaLu's FiOS Share Slipping? They only bought members of the Verizon ego system and TXP is not a pure networking player. They Big E are more likely to buy a company like Starent.
paolo.franzoi 12/5/2012 | 4:12:00 PM
re: Is AlcaLu's FiOS Share Slipping?
You notice TXP going bankrupt?

seven
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