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Leading telecom equipment manufacturer Tellabs Inc. has find a major customer in the form of Vodafone Ireland that will apply its Insight Analytics Services. A giant telecom service provider like Vodafone Group Plc (VOD - Analyst Report) will use this analytics service to enrich the customer experience.

Tellabs uses Software-as-a-service approach to provide analytics service, which serves large telecom carriers to gain an insight about the service performance of a particular network thus making it easy for the operators to analyze the underlying technology.

Vodafone’s Ireland unit is deploying Tellabs Insight Analytics Service to evaluate the network data contained within its Multi vendor 3G network. By analyzing the information, the company will be able to find the root cause of the network related issues and take necessary actions much more quickly and cost efficiently. Additionally, it will provide data about the capacity used within the network thus allowing proficient capacity management.

A record adaptation of smartphone has increased the demand for wireless Internet, which in turn has fueled the growth of multimedia services. As people use more of this services they tend to demand a reliable network. As a result, telecom carriers invest heavily to develop a network that provides highest customer experience.

Tellabs recently reported third-quarter result, wherein revenue missed the Zacks Consensus Estimate. Winning Vodafone Ireland is a major boost for the company’s service segment, which also reported an annualized decline in sales.

With the evolvement of communication technology from 3G to 4G LTE that requires higher bandwidth; it has become increasingly difficult for the carriers to maintain an astounding network performance. We believe increasing deployment of LTE around the globe provides a lucrative opportunity for Tellabs to develop its analytics business.

We maintain our long-term Neutral recommendation on Tellabs. Currently, it has a Zacks #3 Rank, implying a short-term Hold rating on the stock.

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