A leading provider of network solutions,
) introduced a technology solution associated with its Bluesocket
virtual Wireless LAN (vWLAN). ADTRAN's latest offering for its
enterprise customer involves multiple customer-premise equipment
(CPE) deployment options including cloud-hosted services.
Unlike other service providers that offer a managed WLAN service
through premise-based hardware controller, ADTRAN's CPE deployment
using Bluesocket vWLAN would not require placing of any hardware
controller. Therefore, this new solution leverages the versatile
control capabilities of ADTRAN's vWLAN solution. With the new
Multiple CPE deployment option customers can create new cloud-based
Wi-Fi services and support hundreds of WLAN users at a lower
ADTRAN's vWLAN solution bodes well for wireless service
providers because it provides centrally located virtual control and
management. ADTRAN made its foray into vWLAN solutions with
the incorporation of the Bluesocket technology in 2011.
We believe that the rise in global broadband deployment,
intensive upgrade of mobile infrastructure and channel expansion in
the Enterprise segment are the key factors driving ADTRAN's
innovative and diverse product portfolio. The company has already
benefited from its three main growth products, namely Broadband
Access, Optical Access and Internetworking that represent
approximately 84% of its total revenue.
Further, we expect broadband stimulus, Total Access 5000,
fiber-to-the-node platforms, incremental international sales,
growing professional-services in domestic and overseas markets, as
well as mobile broadband infrastructure upgrades to offset gradual
declines in the company's traditional products like HDSL.
ADTRAN continues to grow on Ethernet access networks and other
bandwidth enhancement technologies for fiber-based networks. As a
result, the company enjoys an industry leading profile with
approximately 15.0% market share in Ethernet over bonded copper
Additionally, the company also registered significant growth in
its professional service activities that provide deployment of
Total Access System components in telecommunication companies.
ADTRAN projects that professional service capabilities will remain
accretive as both domestic and international carriers seek
cost-effective methods to accelerate network deployment.
However, we believe that the acquisition of Nokia Siemens
Networks' fixed-line Broadband Access business will continue to
weigh on ADTRAN's earnings performance this year given its weaker
market shares. Further, muted performance by the company's
traditional product line - HDSL, lower spending by Tier 1 carriers
and heavy reliance on key customers -
Verizon Communications Inc
) - along with regulatory issues in the telecommunication industry
keep us on the side lines.
Currently, we have a long-term Underperform recommendation on
ADTRAN. For the short term, the stock has a Zacks Rank #5 (Strong
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