Zacks_Analysts' Blog : ADCT Targets Broadband Stimulus - Analyst Blog

The company recently formed a Rural Carrier User Group to coordinate with several carriers, broadband consultants and engineering firms to exchange information and develop new ideas for emerging FTTP deployments. The American Reinvestment & Recovery Act (ARRA) contains provisions that encourage telecom operators to apply for grants, loans and guarantees to assist them in deploying un-served and under-served communities for broadband access.

The Broadband Stimulus Program has received significant acceptance among rural carriers. Out the total allotment of $7.2 billion, the first round will inject $4 billion into the industry. Yesterday, National Telecommunications and Information Administration said it had received about $28 billion in bids from various telecom service providers for the first round of stimulus fund.

ADC Telecommunications is a leading connectivity solutions provider for copper, fiber, and wireless networks. We expect the company to benefit from the rural broadband thrust as increased spending by carriers for fiber-based and wireless networks will boost demand for connectivity solutions especially in the local loop areas.

In the upcoming OSP EXPO 2009 (Sept. 2-3), ADCT will unveil a series of RUS-listed products. This portfolio includes OmniReach 3000 Fiber Distribution Hub cabinet, OmniReach Multiport Service Terminals, fiber-hardened drop cables, FiberGuide Optical Raceway system and OMX600 Optical Distribution Frame. ADC Telecommunications will also present its Next Generation Frame and LSX 288 fiber panel.

We believe that the ARRA will benefit small telecom equipment manufacturers and rural telecom operators. Telecom gear makers and infrastructure solution providers will help the regional/rural telecom operators to plan, design and implement broadband networks. Besides ADCT, other firms that are likely to benefit are Alvarion Ltd. (ALVR) and Arris Group Inc. (ARRS).