skip to main content
Close Icon

In order to deliver a personalized, responsive service and to improve the site, we remember and store information about how you use it. This is done using simple text files called cookies which sit on your computer. By continuing to use this site and access its features, you are consenting to our use of cookies. To find out more about the way Informa uses cookies please go to our Cookie Policy page.

Global Search Configuration

Ovum view

Summary

The second phase of CAF (Connect America Fund) funding will benefit Adtran and Calix, both US-centric, tier-2 communications equipment vendors. While there are concerns about whether CAF II funding will be fully utilized, dollars will flow to Adtran and Calix, providing a boost as they face challenges growing their respective revenue bases internationally.

Adtran and Calix have home-field advantage with CAF II

More than $9bn of new CAF funding has been allocated for use over the next five to seven years. In late 2014, the FCC announced funding-award guidelines, including a new broadband goal of 10/1Mbps (downstream/upstream), an increase from the previous threshold of 4/1Mbps. The subsidies are available to large operators and to small players, but the operator has to deliver the minimum speeds throughout the whole area, e.g. no subscriber cherry-picking. While there has been much criticism regarding the guidelines and process, many operators will accept their support allocations.

CAF II will help Adtran and Calix, both tier-2 wireline broadband equipment vendors with strong customer relationships among tier-2 and -3 telco operator customers in the US. In 1Q15, Adtran and Calix held a mere market share of 5% and 2% (based on rolling 4 quarters), respectively, of the worldwide wireline broadband equipment market, but within North America those figures jump to 9% and 8%, respectively. For Adtran, its sales of xDSL equipment to DT in Germany is important, leading to 11% market share for EMEA.

Customer and geographic market expansions have been difficult for both Adtran and Calix. In the US, Alcatel-Lucent remains the top vendor for tier-1 operators such as AT&T and Verizon. In most countries outside of North America, Adtran and Calix compete with Huawei and ZTE in addition to Alcatel-Lucent.

While CAF II awards may not significantly increase planned capital spending by the likes of CenturyLink, Frontier, and Windstream, these awards ensure home-field advantage for both Adtran and Calix, vendors that already supply equipment to these operators.

Appendix

Further reading

Market Share Report: 1Q15 FTTx, DSL, and CMTS, TE0006-001076 (June 2015)

Market Share Spreadsheet: 1Q15 FTTx, DSL, and CMTS (Revenues), TE0006-001073 (May 2015)

Market Share Spreadsheet: 1Q15 FTTx, DSL, and CMTS (Units), TE0006-001072 (May 2015)

Author

Julie Kunstler, Principal Analyst, Intelligent Networks and Components

julie.kunstler@ovum.com

Have any questions? Speak to a Specialist

Europe, Middle East & Africa team - +44 (0) 207 017 7700


Asia-Pacific team - +61 (0)3 960 16700

US team - +1 646 957 8878

+44 (0) 207 551 9047 - Operational from 09.00 - 17.00 UK time

You can also contact your named/allocated Client Services Executive using their direct dial.
PR enquiries - Call us at +44 7770704398 or email us at pr@ovum.com

Contact marketing - marketingdepartment@ovum.com

Already an Ovum client? Login to the Knowledge Center now