- Adtran focuses on smaller, regional ISPs in the U.S., whereas its European customer base is more Tier 1-heavy, said head of marketing Stephen Rettenberger
- The vendor sees BEAD as a tailwind but is not ‘dependent’ on the program
- He said unlike in the U.S., it’s common for European operators to purchase fiber OLTs separately from ONTs
Adtran is an access vendor entrenched in both North America and Europe, but the market dynamics as well as the customers are noticeably different in each region, according to the company's Head of Marketing Stephen Rettenberger.
For instance, the company in North America focuses on Tier 2 and Tier 3 operators. “We’re not selling into Verizon and AT&T, which means we’re not going head to head with Nokia on those super large Tier 1s,” he told Fierce.
Some U.S. customers include ACE Fiber, open access operator eCommunity Fiber and Kentucky-based utility Henderson Power & Light. Rettenberger also noted North America has a “very condensed supplier landscape,” with Nokia, Calix and Adtran considered the main suppliers in the region.
Whereas in Europe, “some of the largest operators are using us for broadband access,” he said, such as BT’s Openreach, FiberCop (formerly part of Telecom Italia) and 1&1 Versatel in Germany.
Adtran is headquartered in Huntsville, Alabama, but the company in 2021 merged with German vendor ADVA Optical Networking, allowing Adtran to strengthen its position across the pond. More than half of Adtran’s manufacturing sites and staff are based outside the U.S., primarily in Europe, said Rettenberger.
Adtran sees BEAD as tailwind
Public funding is of course a key driver in the U.S. market, he added, due to the Broadband Equity, Access and Deployment (BEAD) program and the need for Buy-America compliant fiber products.
Asked whether Adtran still sees revenue opportunity from BEAD and rural broadband, Rettenberger said, “For us, it’s a tailwind in a market that we have historically been good at,” referring to not just BEAD but also rollouts from other programs like the Capital Projects Fund and the Rural Digital Opportunity Fund.
Dell’Oro Group VP Jeff Heynen predicted it could take awhile for access vendors to realize revenue from BEAD, and that probably won’t happen until 2027.
For Adtran’s part, “We are not dependent on BEAD, but it’s an upside,” said Rettenberger.
Buying patterns in U.S. vs. EU
As for how purchasing patterns differ across regions, Adtran’s North American customers frequently buy the optical line terminals (OLTs) and optical networking terminals (ONTs) together, he said, as smaller operators like to buy “the entire experience they create from a single source.” That includes gear for middle-mile networking and edge aggregation services.
In contrast, European operators often buy the OLT separate from the ONT. The reason for that partly comes down to more market choices for ONTs, Rettenberger explained. Particularly with regards to price.
“We are not seen as a low-cost vendor and we don’t want to be seen as a low cost-vendor. We do have technical differentiation, scalability and local value creation that people are appreciating,” he said.
“But on the ONT side and everything that’s close to the subscriber, some of the European markets are so price competitive that every euro, pound counts.”
Public funding in Europe is “a little bit less pronounced” since it varies across countries, Rettenberger said. But one big factor influencing that market is concern about Huawei networking equipment, he added. The EU now seeks to permanently phase out gear from vendors like Huawei and ZTE from telecom networks, much like the U.S. did in 2022.
Adtran’s 50G outlook
Adtran is also aiding the rollout of 50G PON. Last May, U.K. fiber provider Netomnia announced it used Adtran technology for the first-ever commercial 50G deployment in the country.
Netomnia upgraded an existing residential customer to 50G, but Rettenberger thinks that will be the exception rather than the rule.
“Nobody in the residential broadband side needs more than XGS-PON at this point in time,” he said, noting this specific Netomnia customer runs a business out of his home that uses SASE, SD-WAN and the like.
Dell’Oro recently forecast XGS-PON deployment will be the biggest contributor to PON equipment revenue through 2030 across North America, EMEA and the Caribbean and Latin America, while 50G PON deployment gets pushed back.
In Rettenberger’s view, “Going forward, we predict that 50G PON will definitely be a small, medium enterprise solution…possibly even a convergence platform where things like mobile backhaul or connectivity to certain antennas could be additional use cases.”