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NBN to Deploy ADTRAN's (ADTN) In-Ground Technology

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ADTRAN, Inc. (ADTN - Free Report) recently announced that its 2nd generation Distribution Point Units (DPUs) has been selected by NBN Co for deployment in Australia's next phase of national broadband access network. Notably, the deployment of DPUs will facilitate the delivery of Gigabit speed of broadband service throughout the country.

ADTRAN confirmed the shipment of large numbers of the next generation of ports for the project. As an advanced fibre service extension technology, will utilize existing wired infrastructure to connect large capacity networks to houses and businesses. The deployment of the first DPUs have already begun in the Sydney suburb of Rockdale. Notably, the latest phase of the wholesale national broadband access network is being developed at the Rockdale suburb and completed by 2020.

Notably, the deployment of ADTRAN technology onto the NBN fibre-to-the-curb (FTTC) network will enable NBN to implement a nationwide broadband network, capable of delivering higher speeds of broadband services to consumers.

Existing Business Scenario

ADTRAN is accelerating the industry’s transition to open, programmable, scalable networks by leveraging Mosaic Software-Defined Access architecture that combines modern Web-scale technologies with open-source platforms to facilitate rapid innovation in multi-technology, multi-vendor environments. The company expects solid traction for ultrabroadband and Fiber-To-The-Home (FTTH) solutions along with SD access and EPON solutions.

Moreover, ADTRAN’s ProCloud Wi-Fi service, which has been developed on the company’s virtual Wireless LAN, is opening new opportunities as Valley Business Solutions (VBS) is utilizing the technology on a wider scale. Apart from these products, the company has registered growth in the professional service activities that deploy the Total Access System components in telecommunication companies.

The company’s global leadership in software-defined access is likely to ensure a steady stream of revenues as it helps clients reduce cost as well as accelerate service delivery and deployment. Shares of the Zacks Rank #3 (Hold) company have recorded lost 11.9% in the past six months compared with the industry’s decline of 27%.

However, high technological obsolescence raises operating costs with continuous investments in R&D initiatives, which dents the company’s growth potential. In addition, adverse foreign currency translation is likely to affect margins.

Key Picks

Some better-ranked stocks from the same space are Arista Networks, Inc (ANET - Free Report) , Superconductor Technologies Inc (SCON - Free Report) and Altice USA, Inc (ATUS - Free Report) . While Arista Networks sports a Zacks Rank #1 (Strong Buy), Superconductor Technologies and Altice USA carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks exceeded estimates in each of the preceding four quarters with an average positive earnings surprise of 13.35%.

Superconductor Technologies surpassed estimates twice in the trailing four quarters with an average positive earnings surprise of 0.65%.

Altice USA outpaced estimates twice in the preceding four quarters with an average earnings surprise of 54.23%.

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