With the announcement, Tellabs is singing from the same songbook as all the other systems vendors here. They’re trying to make it easier for incumbent carriers to add data services without causing them to give up any of their voice services or forcing them to build overlay networks just for data services.
While hoping to improve its stock with incumbent carriers – and to avoid displacement by competing vendors – the company announced the following product improvements this week:
This follows the company’s announcement of a customer win at Broadwing Inc. (NYSE: BRW) last week, a deal that helped it further justify the Ocular Networks acquisition (see Tellabs Sees Ocular Upside).
Indeed, Tellabs is humming the tune that carriers want to hear. What they can’t be so sure of, however, is how long the carriers will continue to spend as slowly. In the past two months, Tellabs has remained profitable, but its revenues have dropped and it had to lay off workers while closing and consolidating plants (see No Surprises From Tellabs).
Wall Street waits with baited breath to see when Tellabs product improvements will pay off. “At this point, we fear that ongoing capex reductions could continue to impact Tellabs into the June quarter,” wrote Deutsche Banc Alex Brown LLC analyst George Notter, following the company’s most recent earnings conference call.
In the meantime, though, the old horse of the telecom equipment space hopes it can convince attendees here it can still gallop with the best of them. “We’re about two things: getting our customers on track to make money and helping them wring costs out of their networks,” says Kemp.
— Phil Harvey, Senior Editor, Light Reading